Locally-connected billionaire John Kluge isn’t immune to a weak economy, at least in the sense that some of the restaurant chains he owns have had to close. According to the New York Times, the national chains Bennigan’s (an Irish pub sort of place) and Steak & Ale (beef and beer, we’re guessing) are facing dire times. Bennigan’s was shuttered Tuesday and has filed for bankruptcy, and Steak & Ale will also close.
Kluge owns a business conglomerate of which Texas-based Metromedia Restaurant Group, the parent company of Bennigan‘s and Steak & Ale, is one unit. Another unit is Metromedia Steakhouses, which owns Ponderosa and Bonanza and is not covered in the bankrupty filing. (As C-VILLE reported last week, though, our local Ponderosa has indeed closed.)
The Times quotes a restaurant industry expert, Amy Greene of Avondale Partners, who explains that with the minimum wage going up along with commodity prices, restaurants have rising costs that they can’t pass on to consumers—since those consumers, in turn, are being squeezed by gas prices and grocery-bill hikes. Also, the Times piece suggests, the fact that the country has so freaking many of the same kind of restaurant—your basic fake-nostalgia-decor, fried-appetizer, flair-in-a-parking-lot kind of place—that, as the economy tightens, some chains and locations will inevitably get pinched.
Having billions to your name doesn’t insulate your Bennigan’s from a chilly economy.