Alessi Bakery has filed for Chapter 11 bankruptcy protection to reorganize its finances, according to an article in the Tampa Bay Business Journal.
In the filing, the family-owned bakery and catering business based in Tampa, Fla., cited heavy borrowing to buy a new manufacturing facility right before the recession hit and commodities prices started to rise. Alessi bought the Eagle Trail plant in March 2007 and invested significant capital to revamp the facility, which included adding freezer and cold storage equipment.
Then the recession hit, and while sales declined, fixed costs to fund the expansion remained, and the company could not cut variable costs quickly enough. The situation was aggravated by increases in the price of flour, sugar and butter, according to the filing.
In the past year, the company has developed a broker network, which resulted in additional sales and customers. It also has improved efficiency and cut staff. The gains were offset by the loss of one major national customer, not identified in the filing.
Alessi Bakery, with gross revenue for 2011 of about $11.9 million, estimated its assets in a range from $10 million to $50 million and liabilities in the same range.