V Steakhouse

[oakapple]

According to the New York Post, V Steakhouse is in trouble, and will most likely be retooling its menu to be more like a traditional steakhouse. On January 28, Steve Cuozzo and Braden Keil jointly wrote:

A simmering feud between the partners in Time Warner Center's glam but under-performing V Steakhouse might not have ended with a "huge" meeting this week.

Related Cos. CEO Stephen Ross, whose company developed the Time Warner complex, told a Post reporter at Donald Trump's wedding last weekend that V might be gone "within a month."

It followed months of buzz that tension between V's two sets of partners threatened the heavily-hyped eatery's future.

But yesterday, Ross and his Related partner, Kenneth Himmel, said star chef Jean-Georges Vongerichten and his financial partner, Phil Suarez, agreed to change to a "more traditional" steakhouse menu.

"We just finished a huge meeting with them," Himmel said. "They're making some menu changes and have recommitted themselves to V."

The closure of V would be a colossal embarrassment for all concerned. I continue to believe that $62 per steak won't cut it, when the rest of the city's high-end steakhouses are charging more like $40.

[ASM NY]

I would be surprised to see it close down. Even if it's not a big money maker, I think it would hurt the Jean Georges' family of restaurants to have one close down, especially after such a short run.

I am curious to see how they plan on changing the menu, I wouldn't be surprised if they actually moved AWAY from being a steakhouse, and try to sell themselves as another "high quality" Jean Georges restaurant.

[CFO999]

The writing is on the wall

Remember the comments from JG saying V was highest grossing restaurant in AOL(not profitable)

Revenue alone does not equal success, and if you fall short of those expectations you better have a plan to adjust your model

I created the business model for V Steakhouse, and all of management knew the slim chances of being successful at that location. The management team currently in place is historically never had to deal with a failure and is unprepared to quickly adjust to the public's change of heart regarding any of the restauarnts in the JGV empire.

All the other steakhouse concepts presently under the JGV brand are all management deals being run by partnering management companies.

V is the only steakhouse he actually manages.

The AOL food court concept is hard enough as it is, now add high overhead cost related to a real estate deveopment model, never directly manageing a steakhouse concept, and the lack of flexability in a strained management team and you begin to see the problems that you may encounter.

Edited February 6, 2005 by CFO999 (log)

[robert brown]

I thought Jean-Georges was suppose to tell other people how to run a restaurant.

[oakapple]

In today's New York Post, Braden Keil has the word that V Steakhouse is closing — possibly as early as this Friday. (In the Post's typically pun-laden fashion, the headline is: "It's V End of the Road for Steakhouse.")

The news isn't exactly surprising, but it marks a number of milestones. It's the first Jean-Georges Vongerichten restaurant to fail, and the first restaurant in the Time-Warner Center to close. Given the number of restaurants in Vongerichten's empire, it's pretty remarkable that he's never had a misstep in New York. I wouldn't cry for the Time-Warner Center. They have three bona-fide hits (Per Se, Café Gray and Masa), and that's not bad considering the failure rate for new restaurants.

The article mentions that Vongerichten plans to open another steakhouse somewhere in Manhattan. That's not surprising, either. I believe his Las Vegas steakhouse has done well, and in general steakhouses are indestructible. In a new location with a more reasonable rent structure, and prices more in tune with other Manhattan steakhouses, Vongerichten should do well.

No word yet on what will replace V Steakhouse.

[CFO999]

10 Months after my last post should indicate that the writting on the wall was very plain to see.

The issue of high rent at this location was a secondary issue (yes it was high)...since the real estate partner deffered payment in order to give the restaurant a chance to gain momentum.

And in all fairness, no one could meet those numbers, regardless of who ran that location.

And it is not surprising that JG will attempt to open a steakhouse in NYC to prove to the culinary world that this failure was not his doing, but really due to the greed of his real estate partners financial model.

But the facts are the facts...JGV's empire has other failures the public knows nothing about....since as a group one profitable location will cover the sins of the other failing locations. This is not uncommon for an MCO.

As I have stated before...this was the first steakhouse concept his management team

was to control directly....all the other locations were management deals

Bottom line......JG's still my favorite chef......and I am sure he has learned from this experience what needs to be done to complete a successful steakhouse model.

I wish him all the best

[oakapple]

And in all fairness, no one could meet those numbers, regardless of who ran that location.

Yes, but other restaurants at that venue are apparently succeeding.

But the facts are the facts...JGV's empire has other failures the public knows nothing about....since as a group one profitable location will cover the sins of the other failing locations.

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I will not disagree, since you seem to have inside information, but I would question the business logic. It's certainly true that JGV could cover the revenue shortfalls at some restaurants with surpluses at others. But why would he? Vongerichten is not running a charity operation. If a restaurant is a persistent money-loser, you'd expect him to retool the place, or to give up eventually (as he has now done at V).

About the only exception is the flagship, Jean Georges, the closure of which would entail a considerable loss of prestige. But I don't think his reputation stands or falls on whether 66 or Mercer Kitchen stay open. (I just picked those two at random; I have no idea whether they're successful.) If they're not working, presumably he would revamp or close them.

Edited December 22, 2005 by oakapple (log)

[CFO999]

Great Chef does not always equal good business judgement.

The present management team has gone through an extensive expansion in the last year.

Going from a stand alone management style to a corporate group has a large learning curve.

Any failure would be considered unaacceptable to this perfectionist chef.

So disclosure of any weakness would not be tolerated.