Web Exclusive: Cameron Mitchell Looks Forward to Expansion
With the sale of 22 steak and seafood restaurants, Cameron Mitchell Restaurants gets the opportunity to expand other concepts in its portfolio.
By Maya Norris, Managing Editor -- Chain Leader, 1/31/2008 11:44:00 AM
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| Founder and President Cameron Mitchell plans to use the proceeds from the sale of 22 restaurants to fund newer concepts. |
That leaves founder and President Cameron Mitchell with eight concepts, which total 18 restaurants in nine states. Mitchell spoke to Chain Leader about how he plans to fill the void and spend the capital from the sale including expansion of the company's newer concepts: Marcella's, a two-unit Italian casual-dining concept; eight-unit Rusty Bucket Corner Tavern; and Mitchell's Ocean Club, a fine-dining steak and seafood restaurant.
Why did you decide to sell Mitchell's Fish Market, Columbus Fish Market, Cameron's Steakhouse and Mitchell's Steakhouse?
One, because [Mitchell's Fish Market] was poised for national expansion and ready to build eight to 10 restaurants a year. And we have three other concepts. We're building our Ocean Club restaurant concept, our Marcella's and Rusty Bucket Corner Tavern. We just decided to build 20 some restaurants a year to build out all those brands at their potential right now. We just didn't have the wherewithal to do that. And so it wasn't really fair to our people. We're holding back our people if we didn't sell effectively because we just couldn't grow as fast as the concepts were ready to.
No. 2, since we do have three other great concepts in the hopper ready to build, it was an opportunity for us to reward our partners. The market was doing very well. It was a seller's market for a long time. The multiples of earnings being paid for restaurant companies were very strong. So this was an opportunity to reward our partners, significantly, if not all the way, pay down all of our debt, and fund some future growth with these other concepts.
Cameron Mitchell Restaurants expects to begin expanding Marcella's, a two-unit Italian concept that focuses on small plates, in 2009 with four to six units that year.
Are you going to still be involved in the brands Ruth's Chris bought?
I have a three-year consulting agreement with Ruth's Chris. I want to make sure that they succeed because my name's on the door and I helped birth that brand. Even though I'm no longer financially tied to it per se, I definitely want to see them succeed, especially for our people.
What are your expansion plans for Marcella's, Rusty Bucket and Mitchell's Ocean Club, the three concepts you want to focus on growing?
In '08, we have four Rusty Bucket Taverns scheduled. Right now we're just in the Midwest with those. That will give us a total of 12 at the end of '08. We're in Cincinnati, Columbus, Cleveland and Detroit. Those 4,000-square-foot to 4,500-square-foot corner taverns we put up in upscale neighborhood centers and affluent areas. It's your corner tavern concept. It's a very strong little concept for us.
And then we have five Ocean Clubs scheduled in the next year. We have Troy, Mich.; Aventura Mall in Miami, Fla.; Orlando; Tampa; and Scottsdale, [Ariz.].
And then we're looking to do four to six Marcella's restaurants in '09. So we don't have any of those opening in '08. Marcella's is essentially a year younger than Ocean Club. Ocean Club opened up in the summer of '06. We're ready to launch that concept. That concept has done very well for us. Marcella's opened up in the summer of '07. So we have two of those restaurants currently in Columbus. So it takes a little bit of lead time to get new deals put together.
What's in store for some of the other concepts in your portfolio like Molly Woo's, Cameron's American Bistro, Cap City?
Mitchell believes Mitchell's Ocean Club, a fine-dining steak and seafood restaurant with a $70 check average, will be immune from the downturns in the economy because it targets customers with more disposable income.
Those are one- or two-off concepts for us. We don't really see expanding those because those will be in our portfolio of what we call specialty restaurants or specialty brands.
We love to build and create restaurant concepts. And we will continue to do that. That's part of the core foundation of our company. So not every concept that we build will be one that we can grow nationally or regionally or more than one unit. So they don't always hit.
It's a sure recipe for failure to say we're going to design this restaurant concept so we can build 100 of them. Multiunit growth is spawned out of just a great restaurant. Then it becomes a great restaurant concept over time.
So we don't always hit one out of the park every single time we head up to bat. But we'll continue to develop new concepts as we go along. They're very time consuming and require a significant amount of not only physical capital but mental capital. But on the same token, if you get one that works, you can be very highly rewarded for that. Like I said, we love the creative aspect of concept development and will continue to develop concepts every year or two and keeping our creative juices moving at the same time trying to develop these brands that we currently have in our stable.
Are there any specific concepts that you're currently creating or plan to debut in the next year or two?
Although Cameron Mitchell Restaurants does not own Rusty Bucket Corner Tavern, the company manages the brand for a fee and founder and President Cameron Mitchell owns a stake in it. "It's our sister company. One of my operating partners is the president of that," he explains. "He does the operations, but we do everything else: site selection, real estate, development, accounting, financial, HR, marketing, menu development, you name it."
That's a difficult question because one, we just redid our whole steak concept, a whole new menu change at Cap City, and we opened Marcella's this [past] year, which is a new concept, and then Ocean Club last year. We need a break right now and need to be focused on running our operations and getting through this transition and then post transition, allowing the company to settle down and get its feet back on the ground.
However, if you had to pin me down, certainly by '10, we'd like to have another concept out. But right now in '08 and '09, we're focusing strictly on Marcella's and the Ocean Club.
And if I had to say, we've always been intrigued with that American grill-type concept-Houston's, J. Alexander's and so forth. That might be something we have a little fun with and try. But we'll see. Right now we have our hands full just taking care of our current business over the next 24 months.
Would you ever consider acquiring a concept?
Yes and no. That's intriguing to me. But historically in the past, if we felt we liked something, we create it ourselves and put our own creative touches on things.
However, at some point in time I would like to do a turnaround if I felt there was a concept out there struggling, that the concept itself had merit or potential, but I felt was just not being operated properly. A turnaround would be kind of fun to try at some point in time. But again that's a lot of work and it's very difficult and we'd have to make sure we had the people available to do that. But we'll see. I've learned a long time ago, never say never.
Concept creators often say they really enjoy the process of creating and launching concepts more so than running and expanding them. Is that what happened in this case?
No, not at all. This whole thing with Ruth's Chris just happened to be a timing thing-where the market was, where the economy was, where the size of the company was and so forth. I would have preferred to build a little bigger at some point and then sell it.
I love the restaurant business. And I'm one of those guys that likes both sides of that coin. I love the creativity aspect of it and bringing new things to market and those opening nights and some of those things. But on the same token, I love the restaurant business itself. And I love the people and the challenges it creates. So I like both sides of it.
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