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Following store closures, Steel City Pops files for Chapter 11 bankruptcy

Business Decatur Metro ATL

Following store closures, Steel City Pops files for Chapter 11 bankruptcy

Steel City Pops' production kitchen and store in downtown Decatur. Photo by Dan Whisenhunt

Steel City Pops has filed for Chapter 11 bankruptcy days after closing 11 stores, including its Decatur location.

According to the company’s official blog, “Steel City Pops (SCP), a retailer of all-natural gourmet pops, today [Nov. 14] announced that it has initiated voluntary Chapter 11 proceedings. The case was filed in the U.S. Bankruptcy Court for the Northern District of Alabama, Southern Division. The action is intended to help SCP preserve value while the management team evaluates strategic options to improve the company’s financial position and strengthen the business.”

The Birmigham-based Steel City Pops opened at 312 Church Street Decatur in 2017. The business included a kitchen to fuel the company’s expansion into the Atlanta market. In August, news broke that the space was up for lease and Steel City was pulling out of the Atlanta market. That move appears to be part of a larger contraction by the company. Steel City Pops on Nov. 1. announced 11 store closuresMost of the closures are in Texas and the list included the Decatur store.

“The company will use the restructuring process to strategically close underperforming locations, and focus its resources and efforts on its most profitable locations,” the company said. “The closure process is underway. SCP will continue to operate remaining stores, including the company’s flagship store in Homewood, Alabama and other locations in the state, as well as stores in Texas and Kentucky. Gift cards purchased at affected locations may be redeemed online.”

Owner Jim Watkins said the last year has been “particularly challenging” due to to high rents and a weak retail environment.

“Although we implemented aggressive new financial controls and operational efficiencies, we’ve been unable to achieve sustainable levels of profitability in certain locations. The decision to restructure the company was very difficult, but we believe it’s the best course of action at this time,” Watkins said in the SCP blog post.

Recently, Ponko Chicken announced plans to take over the Steel City Pops space in downtown Decatur.

The franchisee is Johnny Esposito, a native Atlantan who also owns a Ponko Chicken in Midtown. Ponko is an Asian Fusion chain specializing in fried chicken.