Dave & Buster’s warns of mass layoffs as COVID-19 keeps arcades closed

Restaurant-and-arcade chain Dave & Buster’s has warned it could lay off more than 2,500 employees as the coronavirus keeps its gaming halls closed.

The Dallas-based company has filed notices in at least 10 states indicating temporary layoffs imposed in March — when the pandemic forced all its locations to close — would become permanent later this year, records show.

The cuts could affect more than 800 workers at six New York venues, including locations near Times Square and on Staten Island, who are set to be axed on or after Dec. 8, according state Department of Labor notices dated Sept. 8. The layoffs would take effect starting Nov. 8 in other states such as Michigan and New Jersey, records show.

But Dave & Buster’s isn’t planning to shut down any of the locations for good, spokeswoman Mary Kathryn Flores said. The company plans to rehire affected workers once state and local officials let the arcades reopen, she said.

“We regret the hardship to our team members, but unfortunately we are not able to control when governments permit businesses like ours to open,” Flores told The Post in an email Friday, saying the company issued the legally required notices because of the “indefinite timeframe” for reopening in certain places.

“If the stores are allowed to reopen before the layoff timeframe in the notices, our intent is to rehire as many of our team members as guest demand will allow,” Flores said.

Flores said Dave & Buster’s has so far reopened 91 of its 136 arcades, where guests can sip beer and munch on Buffalo wings between games of Skee Ball. The closures led the chain’s comparable store sales to plunge 87 percent in the quarter ending Aug. 2, while revenues tumbled 85 percent to $50.8 million, it said last week.

The COVID crisis has also hammered Dave & Buster’s kid-friendly analog, Chuck E. Cheese, whose parent company filed for Chapter 11 bankruptcy in June as it grappled with suffering sales and hefty debts.

Dave and Buster’s warned in a securities filing that it could also be forced into bankruptcy if it can’t reach a deal with its lenders, The Wall Street Journal reported Wednesday. The chain’s stock price slid more than 26 percent on Thursday following that report.

But the shares recovered Friday after two analysts reportedly upgraded their ratings for Dave & Buster’s as the bankruptcy concerns had already been disclosed. The stock price climbed as much as about 17.5 percent to $16.59 and was recently trading at $16.02.

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“We are optimistic that fundamentals can continue to improve as additional units reopen and COVID concerns (hopefully) dissipate,” Raymond James analyst Brian Vaccaro said, according to Bloomberg.

New York Post

Source: Newzandar.com

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