Pizza-maker Sbarro files Chap. 11 bankruptcy

Customers order lunch at a Sbarro restaurant n Chicago.(Photo: Scott Olson Getty Images)

Pizza-maker Sbarro filed for Chapter 11 reorganization Monday, making this the chain's second time in bankruptcy court since 2011.

The bankruptcy filing comes after Sbarro closed 155 of its U.S. locations in February. It still has more than 800 locations in more than 40 countries.

The store closure strategy and the balance sheet restructuring plan is designed to improve its profitability and reduce its outstanding debt by more than 80%, Sbarro said in a statement.

The filing does not affect the 600 franchise locations worldwide, the company said.

Melville, N.Y-based Sbarro filed for bankruptcy protection in April 2011 and emerged a few months later, saying that it significantly cut its debt and received a capital infusion.

Sbarro also had big changes at the top of the company in 2013. After just over a year in the role of president and CEO, Jim Greco resigned in March 2013, according to Nation's Restaurant News. Sbarro said Greco left to pursue other business interests.

The current chairman and CEO is David Karam. Previously he was president of Wendy's International.

A report out last week from Fitch Ratings, noted that privately-held Sbarro, as well as competitor Quizno's, "have lost market share to competitors including Subway, Jimmy John, Gourmet Sandwiches, Little Caesars, and Papa John's."

Its first Chapter 11 filing was a result of rising food costs and a slowdown in consumer spending and mall traffic, says Fitch.

Sbarro was founded in 1956 as an Italian grocery store, according its Facebook profile, and now serves more than 71 million pizzas every year. It is known for locations in high-traffic areas, such as malls, airports, train stations and rest stops.

In addition to pizza, it also serves salads, pastas and other hot and cold Italian entrees.

Contributing: The Associated Press