B.R. Guest Inc

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B.R. Guest Inc

FOUNDER IN ROLE OF TGI FRIDAY’S MANAGER: 1976

FIRST RESTAURANT OPENING: 1987

OPENING OF FIAMMA: 2002

FOUNDER IN ROLE OF TGI FRIDAY’S MANAGER: 1976

B.R. Guest was founded by its president, Stephen P. Hanson. He was born and raised in New Rochelle, north of New York City, the son of Betty Hanson, who was an executive in the garment industry working for designer Anne Klein and eventually launched her own sportswear company. His father, a gregarious salesman for the Anne Klein line, was also a fixture on Seventh Avenue, the heart of the nation’s fashion industry. The dinner table each night was like a college seminar on marketing. From his mother Hanson learned how to be a hard-nosed businessperson, but from his father how to schmooze, attributes that would come in handy as a restaurateur. While attending college at New York University in the early 1970s, Hanson worked as a maître d’ at Alan Stillman’s original T.G.I. Friday’s in Manhattan. Upon graduation in 1976 he became manager and worked closely with Stillman, gaining more valuable lessons for his future endeavors. “Alan said there were three things we sold here: food, liquor and sex,” Hanson told Nation’s Restaurant News in 1999. “Now we don’t mean sex in a bad way, but I still manage and teach my staff the same thing: You have to have sexiness in your restaurants.”

Hanson soon drifted away from the restaurant trade, however. He became partners with some college friends, took over the 18,000-square-foot Cookie’s Steak House in a New Rochelle mall and turned it into a discotheque named Peachtree’s. It was the era of Saturday Night Fever and Peachtree’s became one of the most popular discos in New York City’s outlying areas. While enjoying his time as a 25-year-old disco owner, Hanson prepared for the future, earning a license in commodities trading. Before the disco craze ended, he sold the nightclub and became a commodities broker. He made and lost millions trading in gold and silver, and again found something to take away from the experience. “I learned about leveraging as a commodities trader and I learned about incorrect levels of leveraging and correct levels of leverage,” he told Nation’s Restaurant News. As a result, when he began opening restaurants, Hanson was highly disciplined in the way he approached debt.

Hanson then joined the sportswear company his mother had established, heading production. Once more, a new profession would pay off later when he turned his attention to restaurants. He learned the importance of knowing your customers’ wants and then consistently delivering. “You don’t build a market and earn their trust, just to disappoint them next season with some loud color or wild style no one understands,” he explained to Nation’s Restaurant News. In keeping with this philosophy, Hanson’s restaurants shied away from being daring out of a sense of ego.

FIRST RESTAURANT OPENING: 1987

Hanson’s mother died in 1984 from breast cancer and the family business began to lose its edge, as Calvin Klein, Donna Karan, and others proved more adept at leveraging their celebrity to gain market share. Hanson finally turned his attention to the restaurant business. In 1987 he opened the Coconut Grill, a family-friendly 150-seat American regional bistro, on Manhattan’s Upper East Side. It became so popular so quickly that a year later Hanson was able to open a second restaurant on the Upper West Side, the Mediterranean-inspired Isabella’s.

Because the New York City economy struggled in the early 1990s, five years passed before Hanson opened his third restaurant. Then in October 1993 Hanson along with partners Joy Weber, a commercial casting director, and talent agent J. Michael Bloom, opened Park Avalon, which focused on seafood, located at Park Avenue South close to 18th Street. With three restaurants to run, Hanson experienced some uncertainty on how to proceed and wrote a letter to famed Chicago restaurateur Richard Melman, founder of Lettuce Entertain You, seeking advice. Melman invited Hanson to visit with him in Chicago. Hanson claimed that the half-day meeting was a major influence on his career and provided a much needed spark. “When I look back on that meeting,” Melman told Nation’s Restaurant News, “I think all he needed was a little direction and guidance, not that much tutoring really. He just wanted a sense of how to structure things going forward.” Hanson also became aware of the appropriateness of the Lettuce Entertain You name; while humorous it also served as what Hanson considered a perfect mission statement for a hospitality company. Hanson searched for a comparable name to make his own statement, resulting in “B.R. Guest.”

COMPANY PERSPECTIVES

Stephen Hanson and B.R. Guest have continually redefined the restaurant experience with an emphasis on hospitality, style and accessible cuisine. For this reason, the B.R. Guest team has earned a reputation for being devotedly conscientious, continuously hardworking and always approachable, holding true to its philosophy of offering guests great value along with superior food and service.

In the mid-1990s Hanson sensed there was an opening in the New York restaurant scene for high-quality seafood restaurants. To fill this niche, in 1996 Hanson opened his fourth restaurant, Blue Water Grill, located west of Union Square in the marble lobby of a former bank, next door to the trendy Union Square Café. The following year he added Ocean Grill on the Upper West Side, and then in 1998 opened Atlantic Grill on the Upper East Side. With three major seafood restaurants in the fold, Hanson achieved buying power, and as one of the leading seafood buyers in the city he had the clout to demand first choice and better prices.

By the end of 1998 B.R. Guest was serving about 35,000 meals a week, leading to sales of more than $40 million for the year and producing annual returns of about 35 percent for Hanson and his partners. As a result, Hanson had no difficulty in attracting new investors. For his seventh restaurant, Hanson turned to the popular pan-Asian cuisine concept. Spending $3.5 million he opened the highly theatrical Ruby Foo’s on the Upper West Side. The ornate interior, designed by acclaimed New York architect David Rockwell, included “a startling red-lacquered wall of Asian artifacts,” in the words of New York magazine. Once again, Hanson proved that he knew what his market wanted. Ruby Foo’s was soon overflowing with diners and Hanson was soon making plans to transfer the concept to Times Square, where a second Ruby Foo’s opened in 2000, its theatrical persona a perfect fit on Broadway.

In the late 1990s Hanson was also thinking about expanding beyond New York City and transferring his concepts to other parts of the country. He was reportedly talking with venture capital firms, pursuing the possibility of taking B.R. Guest public as a way to secure the necessary funding for expansion. Hanson was patient and willing to bide his time, however. For example, he secured property on Hudson Street in the meatpacking district but was willing to sit on it until he deemed the neighborhood was ready. Hanson was also forging partnerships with hotels. His next restaurant, opened in 2001, was Blue Fin, housed in the trendy W Hotel, owned by Starwood Hotels. Hanson also forged an alliance with the James Hotels, these relationships providing a way for B.R. Guest to easily expand nationally. While he nurtured these channels he also continued to till the very fertile ground that Manhattan had to offer. At the same time, he closed his first restaurant, Coconut Grill, which was sacrificed after the landlord tripled the rent.

OPENING OF FIAMMA: 2002

In 2002 B.R. Guest made its first attempt at chef-driven haute cuisine, opening Fiamma (Italian for “flame”) in the Soho district with chef/partner Michael White. It was located in a three-level townhouse, offering a number of differently decorated dining rooms. Hanson next turned his attention to Mexican food, looking to fulfill a growing interest for upscale Mexican restaurants. The result was Dos Caminos, which opened in Midtown at 50th Street and Third Avenue in 2003. A smaller Dos Caminos eatery soon followed in Soho. In 2003 systemwide sales for B.R. Guest reached $91 million.

After warehousing the space on Hudson Street for several years, Hanson was finally ready to act. In May 2004 he opened the 380-seat Vento Trattoria Italian restaurant, essentially a sister concept to Fiamma but offering more casual fare. It also featured exposed brick walls and wooden beams as well as an outdoor café. In the basement B.R. Guest opened the Level V lounge and dance club, able to seat another 140. The year 2004 also saw B.R. Guest’s first restaurant opening outside of New York City when Fiamma Trattoria Las Vegas opened in the MGM Grand to strong reviews.

In addition to opening restaurants, Hanson also harbored an interest in the hotel trade. Teaming up with Danny Errico, founder of Equinox Fitness, in early 2004 he opened the James Hotel in Scottsdale, Arizona. It was supposed to establish a toehold for B.R. Guest in the boutique hotel field, pioneered by the Morgans Hotel Group and exploited by Starwood Hotels. While Hanson may have had a feel for the pulse of restaurant-goers, he did not do as well as a hotelier. The James Hotel, supposed to be an “urban resort,” was in reality a $25 million surface renovation of a structure that had once been a Holiday Inn, Clarion, and Doubletree hotel, which the partners had purchased out of bankruptcy. Work was still being done when the first guests checked in. Yet even after the remodeling was complete, the reviews were less than flattering. One reviewer called it “slicked-up and tricked-out” and derisively called it Jimmy instead of the James. In 2006 the property was sold to Morgans.

KEY DATES

1987:: Steve Hanson opens Coconut Grill.
1993:: Park Avalon opens.
1996:: Blue Water Grill opens.
2002:: First haute cuisine restaurant, Fiamma, opens.
2004:: B.R. Guest enters Las Vegas market.
2006:: David Burke’s Primehouse opens in Chicago.

While Hanson was experiencing problems in Arizona, he also suffered his first major setback in the Manhattan restaurant trade. He closed Park Avalon after a decade in operation and reopened it as Barca 18, Hanson’s attempt to do with Spanish cuisine what had worked so well with pan-Asian, Italian, and Mexican fare. It received mixed reviews, the New York Times ’s Frank Bruni concluding in his assessment, “You ultimately don’t know what to make of it. Maybe that’s because it doesn’t know what to make of itself.” Reviews had never been the most important factor in the success of a B.R. Guest restaurant, diners were the ultimate arbiter, but when they failed to support the restaurant, it closed in 2006. B.R. Guest fared better with the opening of a third Manhattan Dos Caminos in 2006, this outlet located on Park Avenue South between 26th and 27th Streets.

When the James opened a hotel in Chicago in 2006, Hanson and B.R. Guest’s involvement was limited to the in-house restaurant. A year earlier B.R. Guest had entered the Chicago market through the opening of a second Blue Water Grill, located in Dearborn, Illinois. Next the company joined forces with celebrity chef David Burke to develop a steakhouse concept. The result was David Burke’s Primehouse which opened in the James in Chicago. In addition to possibly opening restaurants in future James hotels, B.R. Guest also teamed up with Barry Sternich and Starwood Capital group, creator of the W Hotels brand, to develop what they called an eco-friendly dining concept that would be part of a new luxury, eco-friendly global hotel brand called “1” Hotel and Residences, the first scheduled to open in Seattle in late 2008. A “1” hotel was planned for Paris, France, as well, perhaps offering B.R. Guest an opportunity to play on an international stage.

Ed Dinger

PRINCIPAL OPERATING UNITS

Atlantic Grill; Blue Fin; Blue Water Grill Chicago; Blue Water Grill New York; David Burke’s Primehouse; Dos Caminos Park; Dos Caminos Soho; Dos Caminos Third Avenue; Fiamma Las Vegas; Fiamma New York; Isabella’s; Ocean Grill; Ruby Foo’s Times Square; Ruby Foo’s Uptown; Vento.