Buyout firm purchases Restaurants Unlimited
Seattle-based Restaurants Unlimited, begun by Rich Komen and long considered one of the shining stars of the Seattle restaurant industry...
Seattle Times retail reporter
Seattle-based Restaurants Unlimited, begun by Rich Komen and long considered one of the shining stars of the Seattle restaurant industry, was purchased Monday by the buyout firm Sun Capital Partners.
Terms of the deal were not disclosed. Komen, an icon in the local restaurant industry, stepped down from the board of directors, severing his ties with the company after nearly four decades.
Restaurants Unlimited (RUI), which posted sales of $143.5 million in 2006, runs 29 restaurants in 12 states.
RUI Chief Executive and President Steve Stoddard said the company is profitable but hasn't been able to fund expansion from its cash flow. The company has only opened two restaurants in the past five years.
Sun Capital Partners specializes in buying "distressed companies," according to its Web site.
Stoddard said the buyout firm believes "we're simply underfunded."
"They're excited about buying an organization that has a lot more potential," he said. "That's their view of our performance."
Restaurants Unlimited was started in 1969 with the Seattle steak and lobster house, The Red Baron. The restaurant addressed a new trend in the industry — fine food served in a casual environment.
The company built its brand by centering on restaurants such as Stanley & Seafort's; the national restaurant chain Palomino; Kincaid's Fish, Chop & Steak House; and Palisade, a multimillion-dollar monolith in Magnolia.
The company also has developed several fast-casual concepts, including Cinnabon Bakery and Zoopa, although it no longer owns either chain.
RUI has changed hands several times over the years. In 1990 a majority stake was sold to Eli Jacobs, a New York investor who owned the Baltimore Orioles at the time.
But Eli Jacobs filed for bankruptcy protection in 1993, and the next year two East Coast investment firms and top managers at Restaurants Unlimited purchased the chain, with plans to invest in a national expansion.
Komen, the founder and company chairman, repurchased ownership from the outside investors two years later.
Many well-known chefs and managers matriculated in the chain, known for its strong bent on customer service.
John Howie, who worked for Restaurants Unlimited for 14 years, said the owners had been trying to sell RUI for a long time. "That's part of the reason I left," he said.
Howie, who owns Seastar Restaurant and Raw Bar in Bellevue and Sport, an upscale sports bar near Seattle Center, said that when he started with RUI in 1988, it was one of the best restaurant companies in the country.
"Rich Komen had a great vision for that company and he projected it very well," he said. "[This culture] went from the bottom of the company up and everyone knew it."
After the company was first sold to outside owners, Howie said, "it became more important to make money than to take care of the guests. In the long run, that's going to hurt you. Rich never intended the company to go in that direction."
Stoddard said Sun Capital would provide RUI with the financial resources and operating experience to strengthen and expand its branded restaurants, including its latest concept, Pizzeria Fondi, which opened a test restaurant at Kent Station in late 2005.
Sun Capital Partners recently teamed with Golden Gate Capital in a $285 million bid to buy out another Seattle icon — outdoor-inspired apparel retailer Eddie Bauer. But shareholders in February voted against the sale.
Monica Soto Ouchi: 206-515-5632 or firstname.lastname@example.org
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