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Speaker 1: This is a Bloomberg business flash from Bloomberg World Handquarters.
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Speaker 1: I'm Charlie Pallot. That's a Bloomberg business flash. This is
Speaker 1: taking stock with Gadlin Hayes and Gim Fox on Bloomberg Radio.
Speaker 1: We are broadcasting live from Boston's Atlantic Wharf site of
Speaker 1: Smith and will Lensky's, and we're gonna be talking about
Speaker 1: hospitality in the restaurant industry. Do you know that the
Speaker 1: restaurant industry in the United States is worth and estimated
Speaker 1: seven hundred and eighty billion dollars a year and employees
Speaker 1: more than one and a half million people. Here to
Speaker 1: tell us more about the hospitality business is Kim Lapine.
Speaker 1: She is the senior vice president of marketing for Smith
Speaker 1: and Bolensky's. Kim, thank you very much for having us
Speaker 1: here and welcome to the program. Welcome. Tell people about
Speaker 1: a recent transaction having to do with a Bunker Hill Capital,
Speaker 1: which was previously the owner of Smith and Wilensky and
Speaker 1: what is happening to this iconic branch. Sure well, UM,
Speaker 1: as many people know here in Boston, on Bunker Hill Capital,
Speaker 1: private equity firm located here in Boston, they took ownership
Speaker 1: of Smith Lensky back in oh seven, UM, pre recession
Speaker 1: and then of course the recession. UM, their focus really
Speaker 1: was to kind of right the ship and position the
Speaker 1: company and UM very turbulent times. UM very difficult economy.
Speaker 1: UM luxury brands like Smith Lensky of course had to
Speaker 1: take a hard look at themselves and how to survive
Speaker 1: in that atmosphere. And we really just stayed true to
Speaker 1: our our brand, the the integrity, the quality of the
Speaker 1: product in the service hospitality of course was a number
Speaker 1: one focus, and just UM making investments in our procedures
Speaker 1: and our tools to operate the business and kind of
Speaker 1: right the ship and make sure that the equity remained
Speaker 1: and that the company remained solid for future purchase UM
Speaker 1: which of course this past spring, UM dan new partners
Speaker 1: based in Dublin. Longtime fans of the brand, customers of
Speaker 1: the brand UM. They like to get around about how
Speaker 1: they UM cut many deals cutting into Smith Valensky, staying
Speaker 1: over the past cup of decades, so huge admirers of
Speaker 1: the brand UM. They had known some of the key
Speaker 1: players both at Bunker Hill and in our operations and
Speaker 1: even in New York City, and UM really approached us
Speaker 1: to UM franchise the brand over in the UK and
Speaker 1: open the first international location, which they did back in
Speaker 1: two thousand fifteen. So what does this portend? More international expansion,
Speaker 1: more US expansion. What's the business model like now for
Speaker 1: Smith and Olinsky, well, clearly they saw some value in
Speaker 1: the brand, enough so that they invested quite a bit
Speaker 1: of money to open in the UK with the intent
Speaker 1: of eventually buying the company outright. UM. If that went
Speaker 1: well and if the relationship remained and and everything um
Speaker 1: UM remained as positive as it was, they purchased the
Speaker 1: brand back UM this this past spring. So now they
Speaker 1: own all the locations here in the US except New
Speaker 1: York City UM and then of course the London location,
Speaker 1: with the intent of first investing UM new capital and
Speaker 1: much needed funding and the locations that we have here
Speaker 1: in the US UM, then maybe exploring some new domestic
Speaker 1: opportunities in some major cities like we were talking about
Speaker 1: earlier here in the US, and then of course looking internationally,
Speaker 1: and just to look at the US footprint right now,
Speaker 1: you've got Miami Beach, Chicago, Las Vegas, Columbus, Houston, and
Speaker 1: two in Boston. Is any of the funds. Are any
Speaker 1: of the funds going to be used to do renovation
Speaker 1: or build outs of existing location? Yes, as a matter
Speaker 1: of fact, we're beginning renovation plans for Miami Beach as
Speaker 1: we speak. UM. Construction should begin sometime very soon as
Speaker 1: well as Columbus is next on the docket. We've also
Speaker 1: UM recently invested a great deal of funds in the
Speaker 1: Chicago location, both in renovations of the Smith Wilensky brand
Speaker 1: proper and then downstairs the launch of a new sort
Speaker 1: of FETO concept. We call it Lensky's Grow. So, you know,
Speaker 1: it seems to be one of things Smith and Wolensky
Speaker 1: has that you know, you established the nineteen seventy and
Speaker 1: I think that's almost what forty years the whole Uh,
Speaker 1: the foodies in this country, so many people, so much
Speaker 1: more fine dying around the whole country, not just in
Speaker 1: a few major cities. So you have, it seems more demand,
Speaker 1: a bigger market potentially, but there's also so much competition.
Speaker 1: How do you stay on top? How do you keep
Speaker 1: a brand premier and a brand that a company in
Speaker 1: Ireland would want to buy exactly exactly? And you know,
Speaker 1: and that's what we really faced during the post recession.
Speaker 1: You know, how how are we going to remain competitive?
Speaker 1: There's so many new players in the marketplace, especially in
Speaker 1: the cities that we were in UM, and we took
Speaker 1: a hard look at ourselves and said, you know, what
Speaker 1: do we learn over that recessionary period, what do we
Speaker 1: learn about Smith and Lensky that remained a constant, remained
Speaker 1: a driver for the core customers that we were able
Speaker 1: to maintain. And it, you know, came down to a
Speaker 1: few UM what I call brand pillars. It's about the
Speaker 1: quality of the product, the commitment to U s D
Speaker 1: A dry aging, hand butchering and dry aging on site,
Speaker 1: which a lot of steakhouse brands don't do. UM. We
Speaker 1: have a strategic partnership with a facility and i AA
Speaker 1: where we secure and procure the only the very best
Speaker 1: USDA Prime beef, m Black Angus beef. These folks are
Speaker 1: committed to family farm feeder UM relationships, so a network
Speaker 1: of family farms located right outside of Iowa. So again
Speaker 1: committing to the product, the sustainability of it, the the
Speaker 1: quality of it, the hospitality itself, and then the integrity
Speaker 1: of the brand and and just committing you know, all
Speaker 1: of our resources and our attention around those brand pillars
Speaker 1: and not trying to be something that we're not UM
Speaker 1: and remaining true to our heritage and our brand that
Speaker 1: that's really sustained us and it's I think what Dan
Speaker 1: new saw in in our brand and the um growth
Speaker 1: and potential in the future. Just quickly, just want to know.
Speaker 1: One of the other things that's changed in nineteen seventy
Speaker 1: seven are the prices. What does a what does a
Speaker 1: Smith of Olansky top tier state go for now? Um
Speaker 1: depends on the stake that you're talking about, but you
Speaker 1: know we're somewhere in their forty two range depending on
Speaker 1: the steak um. And again we are again still one
Speaker 1: of the only steakhouse friends that dry ages and hand
Speaker 1: butcher's on site. There's obviously an added expense to that process.
Speaker 1: We believe it's something that differentiate to product and it's
Speaker 1: it's something that our customer appreciates. So it's something that
Speaker 1: we're willing to continue to invest in. Gets outside, stay
Speaker 1: on top and brow. You hold onto all the great
Speaker 1: traditions of the past. You upgrade the facilities more modern.
Speaker 1: Were beautiful. Chimlippine, thank you so much for joining you. Okay,
Speaker 1: thanks for joining us. Kicking off our live broadcast here
Speaker 1: Smith and Malensky, where she is senior vice president of marketing.
Speaker 1: We're in Boston, down Atlantic work. Could you hear the
Speaker 1: seagulls in the background for a minute. Boy, oh boy,
Speaker 1: what a beautiful spot. I'm Kathleen Hayes along with pim Fox.
Speaker 1: This is Bloomberg coming up on taking Stock. Our conversation
Speaker 1: about behavioral finance, also new technology and the spending patterns
Speaker 1: of millennials. Can we look at the future of the
Speaker 1: financial services industry that's next