Higher price-point restaurants aren’t feeling the effects of the early 2013 economic hickey that the more modestly priced concepts seem to be, according to Tilman Fertitta, a collector of both.
Fertitta, chairman and chief executive of Houston-based Landry’s Inc., appeared in the studios of CNBC Wednesday and said the lower-range restaurants in his more than 500-unit privately held portfolio saw “sticker shock” in January and February. Landry’s concepts range from family-oriented Rainforest Café and Bubba Gump to high-end Morton’s and McCormick & Schmick’s.
“It’s mainly the lower price points that are hurting right now, more in January and February,” Fertitta said. “The higher end is still holding in there.
“When you start talking about an $80-$90 check average, it’s not going to affect somebody,” Fertitta said. “But somebody on the $20-$30 check average, it’s going to effect them.”
He specifically cited the end of the payroll tax holiday on Jan. 1 as a factor in the sales slowdown, which is showing signs of abating. “March is starting to come back a little bit, he said.
Landry’s has more than 500 properties in 34 states and 33 international locations and covers more than 50 brands in entertainment, dining, gaming and hospitality.
Fertitta, who took Landry’s private in a $1.4 billion deal in October 2011, said the company had “a great 20-year run” as a public company, but he appreciates operating as a private enterprise.
“We didn’t have to look at quarter-to-quarter,” he said. “I was able to grow the company, do lots of acquisitions from Bubba Gump to Claim Jumper to McCormick to Morton’s and make the changes I needed to make and grow them long-term. And I didn’t have to worry about ‘What is this quarter’s numbers?’
Fertitta said he would consider taking an individual concept public.
And tapping into capital markets as a private company hasn’t been difficult, Fertitta added. “There’s more money and more deals out there than you know what to do with it.” He’s seeking a deal New York-based Ark Restaurant Group, a $71.3 million deal that Ark’s board has rebuffed.