Blue Star Donuts, one of Portland's most successful food franchises, has declared bankruptcy as a result of the financial fallout from COVID-19.
The doughnut chain will undergo Chapter 11 debt reorganization. In a press release, CEO Katie Poppe says the restructuring "will help us weather the storm, survive, and emerge as a stronger business."
"Our industry has been hit from all sides during the pandemic," Poppe said. "After the initial closures in March, we had to lay off the majority of our team and permanently close four of eight Portland locations. The remaining members have been working tirelessly to build solutions for this ever-changing obstacle."
Co-founded by Poppe and restaurateur Micah Camden in 2012, Blue Star introduced Portland to the concept of the "gourmet doughnut." It expanded to eight locations in the Portland area, then opened three shops in Los Angeles.
Since the start of the pandemic, however, the brand has downsized significantly. It has permanently closed its downtown flagship, as well as outposts in Northwest Portland, Multnomah Village and Progress Ridge. Its Southern California locations remain open.
According to bankruptcy filings, the company received a $545,900 loan as part of the Paycheck Protection Program, which probably kept it from filing for Chapter 11 earlier.
Three of the remaining Portland locations—in North and Southeast Portland, and at the South Waterfront—will remain open during the restructuring process, although the PDX. The shop at Portland International Airport is temporarily closed.