Benihana begins work with turnaround firm

MIAMI Benihana Inc. announced this week changes to its management team as it begins work with CRG Partners Group LLC, a turnaround firm and financial restructuring expert.

The casual-dining company, which that operates and franchises about 120 restaurants under the Benihana, Haru and RA Sushi Bar brands, named CRG consultant Gene R. Baldwin as interim chief financial officer. He replaces Jose Ortega, who resigned as vice president of finance and CFO.

In addition, Juan C. Garcia has resigned as Benihana’s president and chief administrative officer. Benihana CEO Richard Stockinger assumes the president’s title, and the position of chief administrative officer has been eliminated.

Benihana began working in November with Baldwin and CRG Partners, which has worked on restructuring efforts for American Restaurant Group Inc., parent to the Black Angus Steakhouse chain, and Furr’s Restaurant Group Inc., the cafeteria company that became Buffet Partners LP.

Baldwin, a partner with CRG Partners, is expected to work with Benihana for up to 90 days while the company searches for a permanent CFO. Baldwin will be paid $525 an hour, Benihana noted in filings with the Securities and Exchange Commission.

Baldwin said he would immediately begin working to shore up Benihana’s balance sheet and create a financial strategy for the company. It has been almost a year since Benihana hired Stockinger [3] as its chief executive to replace Joel Schwartz, who had been with Benihana for 28 years.

Stockinger has orchestrated branding and menu changes [4] to help reverse falling sales, and the company recently amended its credit terms [5] after weak financial results led to a break in covenants with Wachovia.

Most recently, the company’s three chains still are posting soft sales trends. This week, Benihana reported that third-quarter same-store sales fell 3.4 percent companywide, reflecting declines of 5.9 percent at Benihana units and 1.6 percent at the Haru concept. RA Sushi logged a 4.4 percent increase in same-store sales.

Total sales for the third quarter, which ended Jan. 3, increased 4.8 percent to $70 million.

Benihana owns and operates 98 restaurants in the United States, including 64 Benihana teppanyaki, nine Haru sushi and 25 RA Sushi Bar restaurants. The company also franchises 23 Benihana units in the United States, Latin America and the Caribbean.

Contact Ron Ruggless at [email protected] [6].