WAYZATA Minn. Redstone American Grill, the five-unit upscale casual-dining chain based here, is getting back to business after several troubling months filled with the sort of drama and investor high jinks usually reserved for larger corporate entities.
Founded by restaurateur Dean Vlahos, who also created the Champps Americana brand, and funded partly by investor Tom Petters, who was indicted late last year for his role in an alleged $3.5 billion Ponzi scheme, Redstone has in recent years endured numerous knocks, including trouble with financing, changes in management and the resignations of board members.
Today, however, a new management team is in place that says it is returning Redstone’s attention back to the business of running restaurants.
As the past unfolded over late 2008 and through this year, Vlahos claimed to be one of the largest victims of Petters’ alleged scheme, which rocked Minnesota and connected communities in Palm Beach, Fla., like a smaller version of the Bernie Madoff scandal. In addition, Petters held a nearly 15-percent stake in Redstone.
While the fortunes of Vlahos and Petters were imploding, Redstone’s financing was called into question by lenders such as GE Capital. At the same time, the chain hired as its new chief executive David Goronkin, who had been at nearby Minnetonka, Minn.-based Famous Dave’s. Goronkin stayed on for less than a year.
“I believe my talents would be better used elsewhere,” Goronkin told Nation’s Restaurant News when he resigned last October.
But by this summer, looking forward and not back, Redstone's new team purchased the ownership stake of Petters, who is being held in jail without bail, and Vlahos resigned as chief executive and a director in May. Allan Hickok, who spent years on Wall Street analyzing restaurant companies and has served on numerous restaurant boards, including Redstone’s, is now co-chief executive.
Nation’s Restaurant News recently spoke with Hickok about Redstone's promising future. He is leading the chain, which expects to open its sixth and seventh locations next year, has already mended relationships with GE Capital and other lenders and has seen sales and profit increase, with Craig Oberlander, another Redstone shareholder and real estate development veteran.
Why did you take on this role?
Ifelt I had an obligation as a board member. [Redstone American Grill] deserves better than this because it is a really good concept and we have exceptional people … we have almost 1,000 people that rely on Redstone for their livelihoods and they deserve better. They are exceptional and deserve the best. The problems we had can be fixed quickly. Basically, here’s the message: The silliness is over. We have a strong concept in tough times, our sales volume speaks loudly about our popularity and we are putting business back into our business.
What are your plans now?
We have put the accountability where it belongs. In the last few months we’ve seen that the morale at this company has never been better. We are treating people with respect, using basic common sense, and it is working. Our profitability has grown by leaps and bounds..
[Redstone] had culinary-trained chefs in every unit and we weren’t using them to their fullest potential. Now, they are developing spectacular new items that are popular, priced right and proving to be big sellers.
As a board member, why did you not step in earlier?
There was a time when there was little input from the board about some critical decisions. We weren’t consulted about office space and certain management pay packages … We were just not asked for input … I’m trying now to be a leader and set an example.
How long do you plan to stay? Is Redstone looking for a new chief executive?
Iplan on remaining involved with Redstone to ensure that it creates the shareholder value the shareholders deserve. It is a great concept. We have an excellent team in place, and are remarkably strong for a company our size. I have been inside so many restaurant companies for so many years and I’ve seen what has worked and what hasn’t. I’ve seen bad people at good concepts, good people at bad concepts and good people at good concepts and Redstone is that now, good people at a good concept.
Contact Sarah E. Lockyer at [email protected].