The bankruptcy filing of a longtime Austin wine bar reflects the rising cost of doing business in Austin and lingering effects of the COVID-19 pandemic.
House Wine, a staple of the Austin scene for 18 years, is seeking bankruptcy protection while it reorganizes.
The cozy venue with affordable wine tasting classes reopened on South First Street at the end of 2024 after moving from nearby Zilker Park, where it had been located since 2008.
“We want our customers to know that our focus remains exactly where it has always been: creating a welcoming place where people can relax, connect, and enjoy great hospitality,” Kerry White, founder of House Wine Austin LLC, said in a prepared statement.
Court records show the company wants to use its available funds to pay staff and continue operating.
Its Chapter 11 filing did not include a reorganization plan or full financial schedules but shows House Wine owes more than $1 million to creditors and has less than $50,000 in assets.
The statement from White also says the restructuring is intended to allow the business to thrive after several years of struggle with rising costs, inflation, labor shortages, its move to the new location and the impact of the pandemic.
The filing mirrors a national pattern that saw business bankruptcies jump nearly 12% across the U.S. through the first quarter, topping pandemic-era levels. Texas is leading the way, with 1 in 6 U.S. filings in the state. The increasing number of filings is tied to economic pressures including persistently high inflation, the impacts of tariffs and rising interest rates, and consumer debt.
Rising costs were cited by more than half of small business owners as a major challenge in a March survey conducted by the advocacy group Small Business Majority.
House Wine was losing money ahead of its filing, with the filing showing a negative operating cash flow. The biggest chunk of its current debt came from pandemic-era loans from the U.S. Small Business Administration. The company owes roughly $750,000 to the federal agency.
SBA records show the company took out an initial $150,000 loan through the Economic Injury Disaster Loan program at the beginning of the pandemic. The May 18, 2020, loan came just over two months after Gov. Greg Abbott ordered closures of dining rooms in an effort to stop the spread of COVID-19.
The federal government became a lifeline for restaurants and bars that were deprived of revenue by public-health closures. In March 2022, House Wine took out an additional $603,000 loan, records show. While the company was able to access additional Paycheck Protection Program loans to pay staff, the SBA data indicates that those loans, around $126,000, were forgiven.
House Wine moved from 408 Josephine St. to 1711 S. First St. after the owner of its last location died. Financial details included in the court filings show the rent payment at the new location appears to be more than $8,000 a month, more than double the $3,500 it paid in 2023.
But, White said, the company has retained a loyal following and never lacked for business.
"The issue is not customer demand. We have a loyal customer base and an active business,” she said. “The challenge has been managing the debt and financial pressures that accumulated while navigating extraordinary circumstances over the past several years.”