Michael Atkinson's strategy to get his
Michael Bros. Steakhouse through its financial
reorganization begins and ends with two
words: "We're open."
If enough customers get the message, the
high-profile restaurant at the corner of
McCarran Boulevard and Kietzke Lane may
be completed with its Chapter 11 reorganization
by next spring.
If not? Atkinson, principal in the company,
says the concept behind Michael Bros.
remains promising enough that the company
might roll out restaurants elsewhere even if its
flagship operation in Reno doesn't weather
the storm.
Michael Bros. opened on Sept. 4, 2001
just a week before the Sept. 11 attacks on the
United States completed pushing the
American economy into the tank.
The timing was all the worse, Atkinson
explained last week, because restaurant operators
count on exceptionally strong business
in their first 90 days to provide cash to carry
them through the days after the initial excitement
wanes.
A summer of construction along
McCarran Boulevard in south Reno delivered
the knockout punch, and Michael Bros.
in September filed for Chapter 11 protection
while it reorganizes its finances.
"We had a challenging first seven or eight
months. We couldn't recover from that,"
Atkinson said. "Chapter 11 was the right
financial decision at the time. It enabled us to
take a breath and focus on running the
restaurant."
Atkinson and his shareholders still believe
strongly in what they consider to be a trendresistant
concept fine dining in a traditional
American steakhouse.
Their belief in the concept was strengthened
when they were able to launch Michael
Bros. in a high-profile location, a 6,400-
square-foot restaurant that previously had
housed a Houlihan's restaurant.
The concept is sturdy enough, Atkinson
said, he's been approached repeatedly by
developers who hope that Michael Bros. will
open restaurants in other parts of the country.
That, he said, is part of the plan: "The goal
here was to develop a brand."
For the brand to succeed in its home market,
however, Atkinson and his management
team need to convince local residents that the
restaurant isn't closed, that a Chapter 11 reorganization
is exactly that a reorganization.
We are focused on generating revenue," he
said.
The Michael Bros. team believes that
word of mouth is critically important to
spreading the message, and the best way to
generate word of mouth is through excellent
execution of the company's strategy.
The strategy, he said, won't change.
Atkinson worries that Michael Bros. may
have a reputation as a pricey restaurant (steak
entrees run from about $20 to $38), but he
said the restaurant isn't about to move down
market.
"To change the price, we'd have to change
the concept," he said.
The focus on getting customers through
the door is beginning to pay off. After a
severe dip shortly after the Chapter 11 filing
many customers erroneously believed the
restaurant had closed dinner trade is rising.
The all-important holiday banquet season
is just ahead.
"We need a good holiday season," said
Atkinson. "We're booking parties, but we're
not full."
Important as building revenue may be, it's
not the sole focus of the company's managers.
Relationships with key vendors needed to be
settled after the Chapter 11 filing. And the
restaurant's 43 employees needed to know
where they stood.
"A lot of employees have stepped up and
taken ownership," said Ross Umphres, the
restaurant's general manager.
Atkinson, who works in investment banking
when he's not exercising his creative side
launching restaurants such as the old
Bailywicks in downtown Reno or Michael
Bros., is pained by the need to put Michael
Bros. through a reorganization.
"Chapter 11 is, unfortunately, a part of the
business cycle," he said. "But the lights are on
and we're executing at the table."
