Dave & Buster’s has filed notices with the state labor department to make more than 1,400 temporary employee layoffs permanent, including 421 on Long Island, and is considering filing for bankruptcy protection.
The Dallas-based operator of venues that combine arcades, sports bars and restaurants has 11 locations in New York State that temporarily closed in March under a government mandate to help stop the spread of COVID-19, although one Long Island location — in Islandia — recently reopened for food and beverage service only.
Contending with financial woes due to months of temporary closings across the country, the struggling company is considering filing for Chapter 11 bankruptcy protection if it can't reach a favorable deal with its lenders, according to a filing with the U.S. Securities and Exchange Commission.
But the company plans to rehire some of the New York employees at some point, spokeswoman Shelby Lopaty Robinson said Tuesday.
"As the notices made clear, the company currently does not plan to permanently close the locations, and we will do our best to rehire as many affected team members as we can just as soon as state and local governments allow arcades to reopen," she said.
Dave & Buster’s temporarily laid off workers in March at its New York locations but the layoffs will become permanent Dec. 8 or during a 14-day period after that date, the company said in the Worker Adjustment and Retraining Notification Act filings, or WARNs, it submitted to the New York State Department of Labor on Sept. 8. The notices were posted on the state agency’s website Sept. 16 and 17.
Under the WARN Act, certain employers must notify workers and the state in advance of mass layoffs or work site closings.
"Unfortunately, because of the indefinite timeframe for reopening arcades in certain jurisdictions, including New York, the company issued legally required WARN act notices to affected team members at affected locations," Robinson said.
The 11 Dave & Buster’s locations in the state include three on Long Island — in Islandia Shopping Center, Sunrise Mall in Massapequa, and Samanea New York Mall, formerly called Mall at the Source, in Westbury.
Gov. Andrew M. Cuomo ordered nonessential businesses, including movie theaters, bowling alleys, shopping malls, arcades and some types of stores, to close in March to help stop the spread of the virus. Since then, most nonessential businesses have been allowed to reopen in phases.
Arcades, amusement parks, movie theaters and live entertainment venues have not been allowed to reopen.
"Thanks to our data-driven public health policies and New Yorkers’ hard work, we have achieved — and so far maintained — one of the lowest rates of infection in the nation, but with the threat of a second wave on the horizon, we are continuing to monitor how and when higher-risk industries like arcades can safely reopen," said Jack Sterne, a Cuomo spokesman. "We appreciate that business owners want to plan in advance to operate safely, and will work with them as that process continues."
As of March 20, all Dave & Buster’s stores nationwide were temporarily closed because of mandates to help stop the spread of the virus, but 94 of its 136 stores have reopened.
Dave & Buster’s total revenues decreased 85.2% to $50.8 million during the second quarter, which ended Aug. 2.
More than 60% of Dave & Buster’s revenue comes from arcades, Dave & Buster’s Entertainment Inc. CEO Brian Jenkins said during a Sept. 10 call with analysts about the company’s second-quarter earnings.
"The food and beverage business alone, that is a struggle for us," he said.