A restaurant near and dear to the hearts of many people in Tucson has filed for bankruptcy. Eegee's has closed four stores in Tucson and another in Phoenix.
Cathalena Burch, a reporter for the Arizona Daily Star, has been following the Chapter 11 bankruptcy filing and joined The Show to discuss, with the place Eegee's has within the culture of southern Arizona.
Full conversation
CATHALENA BURCH: Eegee's is iconic here. It goes back to the 1970s and it's one of those places where, people who grew up with it and it was a regular part of their life, they will leave Tucson and they will literally have Eegee's, which is the frozen fruit drink, they will literally have it sent to them. You know, and they'll have it packed in dry ice, and sent to them. And the first place they go when they come home is, you know, Eegee's. I mean, I talked to celebrities who, you know, people who grew up here who have gone on and become celebrities, and whenever they come home, they said the first place they hit is Eegee's.
MARK BRODIE: So, what led to this Tucson icon going bankrupt?
BURCH: You know, they took over, the company had been locally owned for decades, and then it was sold to a, a national investor, as almost like a midway point, and then another national investor took it over and they bought the Eegee's back in 2018. And it was this company called 39 North Capital, and they initially, when they bought it, they, they, you know, they, they saw how it had this potential to to be a national thing.
And so, their plan was, they had these grandiose initial plans. “Oh, we're going to take this to every place that would have, like, sort of a Tucson connection.” They had been getting a lot of phone calls from people who lived in Iowa and who lived in Vegas and California and New Mexico and Texas who said, “oh, I remember Eegee's, open it here.” And it's like, you know, you have 12 people who live in, you know, some small town in, in Texas, you don't necessarily open an Eegee's there, but, you know, that, that was their idea.
But, what they ended up doing was they decided they would make this mad dash for Phoenix, and, you know, obviously they hadn't read their history, cause Eegee's, years ago, had, had locations in Phoenix and they failed. They didn't last but maybe two or three years. There is one Eegee's, I believe it's still open in Eloy, and that's been open for decades. But, you know, go beyond Eloy, and it was a pretty tough sale for Eegee's because people didn't know it. They didn't grow up with it, you know, and, and, you know, let's be honest, I mean, a sandwich is a sandwich. That isn't why people would go there and if you don't have a relationship with the frozen drink, not necessarily gonna, you know, at the age of 35 or whatever, adopt that as a thing.
But, they opened five locations in the Phoenix area in literally a year. You know, and it's like, and they were all new builds. And meanwhile, they came into Tucson and they also opened additional stores in Tucson, and they closed some stores. They did some strategic closing, which was actually really good. They found that they had stores that were almost like on top of each other. So, they were kind of robbing their customer base with these stores so closely related, and so they closed those stores. They also revamped some stores and you know, at the end of the day they suddenly looked, and you know, the economy was tanking, you know, this was, you know, we're coming into the pandemic and takeout, yeah, they're a great takeout place, but You know, they, they couldn't keep up with it as well and, and, you know, make ends meet with all the new locations.
And I think in Phoenix, it's it's catching on, but I don't think it's doing what they had imagined, but I think they just got, they, they expanded too fast, and too much and then the economy, you know, did its little COVID thing and we're still catching up with that, and you know, and in the, the interim, we also, we also are seeing, you know, increased prices and product and, you know, so I mean it's just really super hard to operate a business and to expand a business when you're looking at all of those other influences, you know, so I think that's what ended up happening.
BRODIE: So what is the company's plan? I mean, I know that you've reported that they are optimistic seemingly about being able to come out the other side of this bankruptcy and be stronger, but what are they, what are they saying about what the company's plans are?
BURCH: They're not at this point. They, all that they would tell me was that, you know, “we're confident we're gonna come out of this bankruptcy in six months and and then we're gonna, you know, we're gonna change,” in that six months they were going to, you know, they're looking at ways that they can streamline that they can change operations that, you know, that they can rethink the the game plan.
And so I don't know, I have no inside information. I pressed them on it and they were, they were pretty much, “well, you know, those are questions we can't answer until, until we get through the bankruptcy,” and all of that and. So, I really don't know.
BRODIE: What is the reaction in Tucson been to this particular company declaring bankruptcy?
BURCH: Shock. Shock, you know, cause it's, it's one of the, you know, we don't have a lot of “chain,” homegrown chain restaurants. We're, you know, Tucson is very into, local, hyperlocal restaurants, you know, we would rather have a local restaurant than a national chain. So when this came out, this was, this was pretty shocking, you know, people were like, you know, 'cause I, I think people look at it and it's, it's like this venerable old reliable, you know, neighborhood kinda you go in there and, you know, Saturday afternoon with the kids after softball practice and have an Eegee, have some fries, and so I think people were really shocked, you know, it kind of felt like losing one of their family members in a way.
BRODIE: So you mentioned that the company hasn't really said much about what their plans are, but do you have the sense or is anybody discussing the possibility of closing more stores? Or are they looking to sort of keep open what they have now and maybe operate from that going forward?
BURCH: With the CEO, the interim CEO, which I felt so sorry for the guy, he literally walked in the door two weeks before they filed bankruptcy.
BRODIE: Oh, wow.
BURCH: Not a great welcome, but one thing he did tell me was, I did ask him specifically, "is this it? I mean, are we looking at potential more closures?" And he said at this point it's status quo. We're not opening, we're not closing. We're going to come out of this on the other end, and we're going to work with what we have and see where we can go from there. Their whole anticipation is that this bankruptcy will allow them to come back financially stronger and, you know, be able to weather whatever storms we're facing, economic storms we're facing. So yeah, I don't, you know, they've not given any indication that we're gonna see any more closures.
