ventures
by chris becicka

Planning for a Brighter Future

It’s big news, even front-page news, when a long-established, local firm declares it is “reorganizing” under the Chapter 11 bankruptcy rules. Certainly the announcement that golden-oldie Houlihan’s was apparently on the brink of failure was news to Kansas City diners.

Not so fast and not so, say new (since October) CEO Bob Hartnett and Gail Lozoff, chief concept officer. They’re half the team, previously of Einstein/Noah Bagel Corporation, brought in to restore the company to its former success.

“We’re not at all in free fall,” declares Hartnett. “Our restaurants have high average sales. We’re not bad, but we know we can be better.” Lozoff agrees, saying, “We will redevelop the culture of continually being better. This company has not been as proactive as it used to be in challenging itself to be relevant to the customer.”

When it opened in 1972, Houlihan’s was one of the first casual concept restaurants in the country, where you knew you could choose from a variety of tasty lunch or dinner items. You could drink, but you could bring your kids or your parents if you wanted, and your meal would be served promptly by young and pleasant people in nice surroundings. Houlihan’s now comprises 52 restaurants in 17 states, including the Bristol, Chequers and J. Gilbert’s. In the last few years, says Lozoff, the remaining Houlihan’s (including both corporate-owned and franchised) somewhat lost their way—and their flair.

The chain was saddled with heavy debt due to multiple leveraged buy-outs, beginning back in 1978. In 1991, it also sought bankruptcy protection when it was still Gilbert/Robinson Inc. The new management team has experience in this area as it went through a similar process with Einstein’s, which ended successfully. While under Chapter 11 protection this time, the team is earning $200,000 per month; an amount the bankruptcy court must think is fair given its record.

Team members have already eliminated the low-profit restaurants—no additional restaurant closings are anticipated in Kansas City besides Darryl’s recent closing near Bannister Mall. They’re concentrating now on the menu, concept, and culture of the organization. Changes will first be seen in their Leawood location at 119th Street and Roe Avenue, when a test menu will be introduced in March. They’re not willing to comment yet on what will be on that menu, other than to say it is an evolution from their current offerings. The restaurant hasn’t changed its menu in two or three years, commented Lozoff, and patrons want to try new things. “Good restaurants have to look at both the food and the experience,” she notes. “We’re doing that now.”

And it’s personal, she says. “I’ve been greatly influenced by Gilbert Robinson.

It affected the culture of the company I built (Bagel and Bagel). I want to restore Houlihan’s to its previous position of innovation.” Hartnett inserts, “In my 30-year career, I’ve never been more excited than at the opportunities I see for Houlihan’s.

It will be something, again, to be proud of.”