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Another longtime American restaurant chain is fighting to keep its doors open as mounting debt and financial losses batter the dining industry.
Marmalade Cafe, a 36-year-old Southern California brunch favorite, filed for Chapter 11 bankruptcy protection Sept. 2, citing “rent disputes and mounting supplier debts.”
It owes more than $1 million to Gilmore Farmers Market, US Foods, Sysco Ventura Inc., the California Department of Tax and Fee Administration and others, according to multiple reports.
The Encino-based company listed total assets of $12.7 million in the filing but reported a net loss of $680,314, according to the New York Post.
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Over the years, the chain, which first opened in Santa Monica in 1990, evolved from a grab-and-go spot to offering private dining and catering to businesses, including Boeing, Mattel, CBS and Warner Bros. Studios. The Calabasas location was even a favorite of the Kardashians, according to reports.
The Calabasas Marmalade Cafe closed after nearly 30 years as construction disrupted parking and drove down sales. (PG/Bauer-Griffin/GC Images)
It was operating just four locations across Southern California at the time of the filing after closing four others in recent years. The company cited hardships, including “unsustainable financial losses and a lack of rent relief,” according to the filing.
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The Calabasas restaurant closed after construction disrupted parking and drove down sales; its Santa Monica location shuttered amid losses tied to the Palisades Fire; and the Original Farmers Market outpost closed after failing to regain pre-pandemic business, the Los Angeles Times reported.
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“Unfortunately, the ongoing construction throughout the shopping center has resulted in a devastating decline in business,” the restaurant wrote in a Facebook post in July about the Calabasas closure.
The Marmalade Cafe in Calabasas was frequented by the Kardashians. (PG/Bauer-Griffin/GC Images)
“Despite our best efforts to weather these challenges, and after seeking rent relief from our landlord during this extended construction period, the landlord declined to help,” the statement continued. “With construction expected to continue for an extended period, we simply cannot sustain the financial losses any longer.”
That closure was reportedly a main catalyst for the bankruptcy filing.
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Marmalade Cafe’s four remaining locations in El Segundo, Malibu, Sherman Oaks and Westlake Village remain open, and a representative told the Los Angeles Times they are “very healthy and very strong.”
Longtime restaurants are being squeezed by simultaneous increases in rent, wages, insurance and utilities, chef Andrew Gruel, founder of American Gravy and a Huntington Beach city councilman, told Fox News Digital.
While many chains go bankrupt, chef Andrew Gruel predicts the restaurants that will survive are those that can adapt their overall business models to industry shifts. (iStock)
“Marmalade’s Chapter 11 filing is a prime example of how difficult the restaurant business has become, particularly in California,” Gruel said.
“Longevity and a loyal customer base are valuable, but they don’t necessarily protect a restaurant when the underlying cost structure changes faster than the business can adapt.”
The filing also stated that the company had downsized from more than 200 employees to about 50 as of this year.
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Marmalade Cafe is the latest in a string of restaurant bankruptcies and closures across the Golden State and nationwide.
Other recent casualties include Fireman Hospitality; Salad and Go; FAT Brands, the parent company of Fatburger; Johnny Rockets and other chains. Red Lobster, Carl’s Jr. and On the Border locations have also recently shuttered.
Marmalade Cafe joins a growing list of restaurant chains facing financial trouble, including On the Border. (Alex Martin/Greenville News/USA Today Network via Imagn Images)
The closures do not necessarily mean the restaurants were poorly run, Gruel added. Rather, rising costs can catch up with even established businesses, part of an industry reset he expects will bring more closures.
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“The operators who survive will likely be those who can adapt their menus, staffing, hours, footprint and overall business model while maintaining the experience that brings customers back,” he said.
Fox News Digital reached out to Marmalade Cafe for comment.
