WAYZATA Minn. David Goronkin has resigned from his post as president and chief executive officer at Redstone American Grill, the five-unit upscale casual-dining chain, both he and the company confirmed Monday.
The management departure comes as the nation’s credit crunch has forced Redstone to rethink its growth plans, focus on cash preservation and act conservatively in the current financial turmoil, Redstone’s founder and chairman Dean Vlahos said.
“Dave’s a great guy, he’s good, and he is not to be used for one or two restaurant openings,” Vlahos said in an interview from Redstone’s headquarters in Wayzata, Minn. “We’re conserving our cash now, pulling back the horns and focusing on running as profitably as possible.”
Vlahos, who also founded the Champps chain, said he would take over the chief executive role until a replacement is found. Redstone will move forward with two restaurant commitments next year, he added, but because the capital markets have dried up, and lending from GE Capital Solutions has winnowed, growth will slow.
Late last year Redstone had raised $10 million from its shareholders, which is cash the company still holds. The company also agreed to a $16.5 million debt financing deal with GE Capital, which Vlahos indicated was at least partially in question. After the growth financing was obtained, Goronkin was hired away from Famous Dave’s of America Inc. in January. Long-term expectations for the chain included a national footprint and as many as 300 locations.
“It’s a straightforward situation,” Goronkin said in an interview. “There’s a change in Redstone’s growth strategy so I decided to step down.”
Goronkin cited the chain’s difficulty in obtaining growth capital, a familiar predicament for many restaurant companies today as lenders slow, or in some cases halt, new deals amid fluctuating interest rates and an unprecedented shakeout in the banking and financial industries.
“I believe my talents would be better used elsewhere,” Goronkin said.