Dive Brief:
- Oaktree Capital Management will take an 85% stake in Pinstripes in exchange for a $7.5 million loan to help keep the struggling eatertainment chain afloat, according to an 8-K filed with the Securities and Exchange Commission.
- Pinstripes was suspended from the New York Stock Exchange for maintaining an insufficient market capitalization on March 5, according to a Friday announcement. Pinstripes will not appeal the NYSE’s move and its stock will be delisted.
- In addition to a majority stake, Oaktree gains the right to elect Pinstripes’ board, though current shareholders will retain some equity in the bowling, bocce and bistro business.
Dive Insight:
Dale Schwartz, the founder and CEO of Pinstripes, said the deal would “strengthen our balance sheet and enhance our financial flexibility for the benefit of the Company and its key stakeholders — investors, customers, vendors, and team members.”
Schwartz said the recapitalization deal was a reflection of investor confidence in the long-term potential of the brand and would serve as a vital step in the revitalization of the chain.
Last month, CFO Tony Querciagrossa departed the eatertainment chain after Pinstripes ran afoul of its loan covenants with Oaktree — the SEC filing notes that Pinstripes failed to maintain an acceptable net leverage ratio — and same-store sales slid by 7.7%. At the time, Pinstripes said it was considering a variety of strategic alternatives, and that its future expansion depended on raising more funds.
Oaktree is supplying a $7.5 million loan to the brand which will “be deposited into an account subject to a control agreement, will be utilized consistently with an approved budget,” according to the 8-K. The deal is subject to negotiation and the finalization of documentation, according to the announcement.
Under the letter of intent, Oaktree would also provide an unspecified sum for closing costs plus up to $17.5 million in additional funding for the brand.
Pinstripes was losing money last year, prompting layoffs and other efforts to control corporate costs. Despite improvements, the chain remained in the red, losing $8.1 million in Q3 of fiscal 2025, according to its earnings release. This left the brand with just $2.4 million in cash on hand and $114 million in debt.
Pirnstripes’ stock’s delisting from the NYSE marks the end of a brief time on public markets — Pinstripes went public through a merger with a special purpose acquisition company in 2024. Other restaurant sector companies have struggled to avoid delisting in recent months as well: Presto Automation was delisted in August as it shuttered its tablet business. Noodles & Company avoided a possible delisting through a brand turnaround program that has included a comprehensive menu overhaul.
But the eatertainment segment, despite the often high unit volumes posted by companies, is struggling. TopGolf Callaway Brands recently announced fresh layoffs, and Dave and Buster’s CEO resigned in December following a sales downturn.
