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Shutting Down

Restaurants close for a variety of reasons 

Restaurants close for a variety of reasons

A few weeks ago, a reader called to tell me that Restaurant Tokyo had closed. "I've been going there since they were in the Econo Lodge on Independence Boulevard," the reader said with clear regret in his voice. "This is awful. They were my favorite restaurant in town." Yoshi Shioda opened Restaurant Tokyo in 1984, but had sold the restaurant, not the property, two years ago. The current business owners called it quits and shut it down. The building is for lease.Restaurant failure is common. In a Cornell University study published in 1992, the authors cited a 30 percent failure rate of restaurants in their first year, and a whopping 70 percent close by the fifth. In a business that is considered to be one of the toughest to achieve success, the restaurant industry has been experiencing even tougher times. The fallout from 9/11 hit the hospitality industry hard. On the heels of that event came the economic recession, the uncertainty of the economic future, and the war with Iraq. Subsequently, fewer people dined out and those who did, dined out less often. Yet competition for a slice of the pie grows. Charlotte has had a plethora of restaurant openings without a matching plethora of new residents to the area. None of this bodes well for restaurants.

Closing statistics are difficult to determine since there is no "check out" procedure. Bill Hardister, program manager at the Mecklenburg County Health Department, said that his department determines that a place is closed only when a health/sanitation specialist goes out to inspect the facility and finds it no longer in operation. Since these inspections are done quarterly, in some cases a restaurant may have been closed for as much as three months before it becomes known to the health department.

According to the statistics from Hardister's department, as of March 4, 2003, there are 1805 restaurants (both take-out and places with seating) in Mecklenburg County. This reflects a net gain of 30 in 2002. Other statistics show 386 restaurants (places with seating) closed between July 1, 2001, and March 18, 2003.

Restaurants close for a variety of reasons or a combination of reasons. Bad reviews, contrary to what some restaurateurs believe, are not one of them. Under capitalization is perhaps the most common. This is especially true for independent operators who have a more difficult time securing loans and other financing. Poor restaurant management plays an important role in the demise of restaurants: nonpayment of taxes and rents is a quick way to close. Opening in the wrong location is another. Hardister mentioned that his department has noticed certain sites in Charlotte as notorious for restaurant failures. Losing the competition to corporate entities with deep pockets and leveraged buying power with purveyors is becoming more commonplace.

Lack of patronage and the wrong concept for the location is perhaps the saddest category. I have written about hard working restaurateurs whose concept might have been successful in another area of town but were doomed where they were located. Such was the case for the charming Tango Argentino, an Argentinean steakhouse, which opened in the back of a shopping center near Pineville. Another path to failure is premature concepts. People rant about the lack of vegetarian restaurants in Charlotte, yet another one, Kelly's Cafe, closed recently.

At times, a restaurant closes where no one is at fault: the space is demolished or the lease is lost. Vibrant restaurants such as Carpe Diem and the Pewter Rose, however, have been able to move successfully to other locations. Other reasons for failure are personal: burn out, retirement, divorce. The latter can be true if assets are to be split, or as in the case of one philandering restaurateur whose father-in-law held the purse strings.

What about restaurants that are popular with critics? Half of the restaurants chosen by the CL critic as the Best New Restaurant for the past 12 years are now closed.

Take a quick trip down memory lane. Many of the "Best Of" picks selected by my predecessor Peggy Porter in 1993 are closed: Best New Restaurant: Crossroads; Romantic: Chez Daniel; Overrated: Lamplighter; Sunday brunch: Catherine's on Providence; Late night: Cafe 521; Patio: Tio Montero; Italian: Si!; Thai: Thai Cuisine; Vegetarian: Chicken Delight (pretty funny, eh?); Bagel: Bagel Works; Fried Cheese (a category only a cardiologist could love): The Grapevine; Pizza: LA Pizza; Caterer: Palatable Pleasures; Wine List: Vintages; Inexpensive: New Big Village; Desserts: L'Spiedo. In fact, out of 43 categories, less than half, only 21 places, are still in business. Readers' selections didn't fare much better. Remember Wad's and The Fishmarket? Out of their 36 categories, only 13 have survived.

Five years later in 1998, I chose Axel Dikker's wonderful Pastis as best new restaurant. Marais was best French. Both are closed. Roughly a third of my selections and the readers' selections for 1998 have closed.

What happened to these once favorite restaurants? Some people still talk about Cafe Flavors. In some cases, owners sold the restaurant and moved on to open a better place. Ole Ole, for example, was sold (and subsequently folded), but restaurateurs and brothers Tri and Phong Luong went on to open Mir Spanish Grille in Stonecrest and Sole Spanish Grille in Dilworth. In other cases owners moved on to related businesses: Fran Scibelli, who once owned Metropolitan Cafe, now operates its offshoot, the Metropolitan Bakery. Frank Redd, who owned Vintages, now owns The Wine Shop. Etienne Jaulin, who was owner and chef of The Townhouse, is in the restaurant brokerage business.

The restaurant business is difficult and fluid. But we do control some of what happens to the restaurants here. The change of ownership at the Coffee Cup stirred up a barrage of articles, yet Gert's Little Diner, another classic Southern spot, closed without a peep. I asked the reader who called me about Tokyo how often he went. "I guess not often enough," he replied. Making the cash register ring in your favorite place is one way to keep the doors open.

Eaters' Digest
Pete Pappas, co-owner of Peter James' Townhouse in Myers Park, said that his operation there is "temporarily closed." Pappas cited a leaking roof as the reason for the restaurant to close. Private functions already booked will continue to be held there, however. Pappas gave no date for reopening.

Rick's Mediterranean Cuisine, 4219-3 Providence Road in the Strawberry Hill Shopping Center, is closed. Owner Rick Gur said, "We plan to open in another location in a few months."

LuLu's Delicatessen, 2041 South Boulevard, is closed.

Have a restaurant tip, compliment, complaint? Do you know of a restaurant that has opened, closed, or should be reviewed? Does your restaurant or shop have news, menu changes, new additions to staff or building, upcoming cuisine or wine events? Fax information to Eaters' Digest: 704-944-3605, or leave voice mail: 704-522-8334, ext. 136. Note: We need events at least 12 days in advance.

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