SALT LAKE CITY Heavy debt and slowed customer traffic in shopping malls have created a cash crunch for snack chain parent Mrs. Fields Famous Brands LLC, which said in a recent filing with federal regulators that it plans to file for Chapter 11 bankruptcy protection.
Mrs. Fields is the franchisor of the Mrs. Fields’ Original Cookies and TCBY brands. The majority of its of 1,268 locations in the United States and 21 foreign countries are located in shopping centers. In a filing with the Securities and Exchange Commission, Mrs. Fields indicated that it would file a prepackaged reorganization plan with the U.S. Bankruptcy Court in Delaware. Under the plan, the company would exchange $195.7 million in debt for $90 million in cash, $50 million in new secured notes and 87.5 percent of the company’s new stock.
Officials at Mrs. Fields could not be reached for comment. However, in the filing, interim chief executive Michael Ward reported that “aggressive competition,” and a decline in mall traffic has hampered sales for the snack chains. The company reportedly posted a net loss of $10.7 million for the quarter ended June 28.
News of the filing comes despite recent efforts by Mrs. Fields to improve sales by revamping its cookie and frozen yogurt stores with updated designs and new products.