April 21, 2020

Work has stopped on the new Dave & Buster’s at Lake Lorraine as the company halted all building activity and temporarily closed all locations.

“Our entire leadership team is focused on navigating through this unprecedented environment,” CEO Brian Jenkins said in an earnings call earlier this month about the COVID-19 pandemic.

“While the aggressive actions we have taken are extremely difficult, we believe they are necessary for the long-term health of the company and will help position us to quickly reopen our stores and emerge on the other side of this crisis and an even stronger competitive position.”

The company had 14 restaurants/arcades under construction and scheduled to open this year, including Sioux Falls. The temporary stop is part of a 70 percent reduction in capital spending this year.

Van Buskirk Cos., the co-developer of Lake Lorraine and contractor on the building, had just turned the shell space over to Dave & Buster’s for finishing. The company had taken out a building permit and was just starting the interior finish. The plan had been to open in early August.

“I think it’s just a pause button,” Steve Van Buskirk said.

“They’re under contract, and they know they are under contract and the building is there for them. We just have to wait for the dust to settle to get back at it again. We’re assuming they’re going to be here and honor the contract. That’s what we’re hoping for and expecting. I think they’re taking the necessary steps to keep the company going.”

The building was on track to open in August. A new date for opening will depend on when construction resumes.

Dave & Buster’s temporarily closed its 137 locations by March 20 as shutdowns at bars and restaurants occurred nationwide.

In 2019, the company reported record sales and earnings.

“We remain the leading category-defining brand in our industry,” Jenkins said in his earnings call. “Our attractive store model has consistently generated industry-leading volumes and EBITDA margins over many years and through many economic cycles, and none of this would have been possible without our people.”

With no revenue being generated, though, the company is selling up to $75 million in shares in an “at-the-market offering” program to generate cash as it weathers the shutdown.

“I don’t think they’re going anywhere,” Van Buskirk said. “I think they’ll be back in business once business starts up again. To me, it’s a positive they’re being proactive to get the money to ride it out.”