Dave & Buster’s has been forced to temporarily shutter all units, furlough more than 15,000 employees and reduce corporate staff almost entirely as it seeks ways to rescue its eatertainment business amid the ongoing coronavirus crisis.
The Dallas-based chain revealed Thursday that it has fully drawn down its revolving credit line and is in talks with outside equity providers for assistance. The company is discussing a possible stake sale with private-equity firms, according to media reports, following the disclosure in January that private-equity firm KKR & Co. had taken a minority stake in the business.
Dave & Buster’s currently has about $100 million in cash on hand and is spending about $6.5 million per week during its shutdown, CEO Brian Jenkins told analysts during a conference call. That gives the company about 15 weeks’ worth of operating cash, assuming no further changes to its financial situation. It holds about $648 million in long-term debt, according to its preliminary financial filing for the quarter ended February 2.
“In recent weeks, the COVID-19 pandemic has created challenges unlike anything our company, industry or the U.S. economy has previously experienced, resulting in the temporary closure of all of our stores,” Jenkins said. “We have thoughtfully and quickly implemented a comprehensive plan to help mitigate the impact of this pandemic, and we are now working to enhance liquidity and preserve store restart capabilities so that we can safely reopen as soon as local conditions allow.”
The chain shut down all of its 137 units on March 20 and has ceased all new store construction. It is in discussions with landlords and vendors to reduce payments.
Prior to the coronavirus crisis, Dave & Buster’s saw same-store sales decline 4.7% for the most recent quarter, with revenues increasing 4.6%, to $347.2 million. Its total number of stores increased year over year by 12.4%, from 121 to 136.