Fail

0

Think it would be fun to open a restaurant? In L.A., those words can be a kiss of death.

“The restaurant business in Los Angeles is as competitive as anywhere in the country,” said Andy Harris, producer of “The Restaurant Show” on KABC-AM 790.

Adds Barbara Fairchild, executive editor of Bon Appetit magazine: “It’s an extremely tough restaurant town.”

Restaurateurs and analysts point to a number of factors that make Los Angeles so challenging including tough price constraints and notoriously fickle diners endlessly on the hunt for the newest, trendiest place in town.

One other thing: There are more than 20,000 eateries to choose from.

“L.A. people are more finicky,” said Karen Berk, co-editor of the Los Angeles Zagat Survey. “They are not as loyal as people in other cities. They always like to jump on the bandwagon for the new show in town.”

That’s not always the case in cities like New York, Chicago or San Francisco, where neighborhood restaurants often remain in business for generations.

“People get tired of restaurants here,” said Sharon Boorstin, managing editor of Gayot GaultMillau restaurant and travel guides. “It is a testament if a restaurant lasts 10 years, let alone five.”

Just how many restaurants fail in Los Angeles is hard to tell, according to the state Board of Equalization, because most are quickly replaced. The number of failures certainly runs into the hundreds each year, if not well over 1,000.

“The rule of thumb,” according to John Rucci, the food and beverage manager at the Peninsula Hotel in Beverly Hills, “is eight out of 10 go out of business within two to five years.”

Robert Nyman, president of the Nyman Group LTD, an Arizona-based restaurant consulting firm that does work in Los Angeles, says the numbers are even more dire: “Seven out of 10 don’t make it in the first year,” he said.

Part of the problem, say analysts and restaurateurs, is that Angelenos, while fickle and trend-driven, also tend to be more tight-fisted than their counterparts in other cities.

The price of an upscale meal in Los Angeles tends to be two-thirds that of a similar meal in New York, and half the price of one in Paris or London, according to Jay Weston, who has been writing a newsletter about L.A.’s restaurant scene for the past 25 years.

“People here are much more value conscious,” Weston said.

That makes it harder for restaurateurs many of whom are more comfortable with a kitchen knife than with a calculator to eke out big enough margins to survive.

“A restaurant is a serious business,” said Gerard Ferry, the owner of L’Orangerie, the Mobil Guide’s only five-star restaurant in California and generally considered the most expensive restaurant in Los Angeles. “People take the business for granted. They open a restaurant and then let it go and it fails. You have to be concerned day in and day out.”

That means, he said, ruthlessly paying attention to details.

“If there is a stain on one of the chairs, we recover it immediately at a cost of $200 a chair,” he said. “If we didn’t, people would say, ‘This isn’t very elegant.’ ”

Ferry, at one point, contemplated downsizing his costly floral displays, including the giant assemblage that dominates the dining room. He decided against it because while it would save some money, it also would diminish the elegance of L.A.’s only grand, formal French dining room.

Alice Matsuzaki, marketing director for Eugene & Associates, which owns Chaya Venice and Chaya Brasserie, said success in Los Angeles means constantly updating menus.

She said, for example, that “sauces were much heavier 10 years ago. Today they are much lighter and more exotic, with many ingredients coming from Asia. It is a constant process of evolution, but nothing dramatic. We have to be sensitive to trends and peoples’ changing palates.”

Having a jammed dining room isn’t always a sign of success. In fact, a moderately crowded restaurant actually might be more efficiently run and profitable than one that’s booming.

Many restaurateurs “don’t know how to run a restaurant economically,” said Jean Pierre Bosc, co-owner of the French bistro Mimosa. “They don’t know what the costs are, especially with the staff. You can be busy but not be making any money. People think that running a restaurant is fun. (But) there are so many things going on in the back that you don’t see, but are important.”

Rucci said amateur management dooms most new restaurants, especially when it comes to financing. A successful maitre d’ who knows how to charm his clientele might not be a good enough bookkeeper to keep his restaurant afloat.

“Seven out of 10 that fail,” Rucci said, “are under capitalized and the people who run them don’t have a full understanding of what it is like to be in the business. There is a lack of long-term thinking. You often have to lose money before you make money.”

And operating a financially sound restaurant is no guarantee that the next restaurant will be a hit in Los Angeles.

Patrick Terrail ran Ma Maison like it was a studio commissary for 12 years. When he reopened a Ma Maison in the Sofitel Hotel on Beverly Boulevard, it failed.

Even Wolfgang Puck, arguably the best-known chef in the United States, has had a few failures. Eureka, his West Los Angeles restaurant and brewery, went out of business not because the food or service were bad, but because the brewery was hemorrhaging money.

“The restaurant didn’t fail,” Harris said. “It was the brewery. But they were wrapped into one (financial) package.”

Finally, a word about the glitz factor: While it might seem like great publicity to have paparazzi standing in front of your restaurant, most experts agree that it’s hardly the secret to success. You can’t take stardust to the bank.

“I always get publicity releases that say Sharon Stone or Whoopi Goldberg loves this or that restaurant,” said John Mariani, restaurant writer for Esquire magazine. “That’s a danger. These people are not regulars who go there three or four times a week. They move on. It isn’t about food for them, and you can’t bank Sharon Stone.”

No posts to display