Smokey Bones eyes turnaround under new owner

Smokey Bones eyes turnaround under new owner

ORLANDO FLA. Smokey Bones [3] casual-dining system plans to “dial up its barbecue experience,” introduce more adult beverages, capitalize on more upscaled environments and grow beyond its current 73 branches, according to Ian Baines, the brand’s chief executive. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

Boca Raton, Fla.-based Sun Capital purchased the struggling Smokey Bones BBQ & Grill chain this month from Orlando-based Darden Restaurants Inc. [4] for $80 million through a newly formed affiliate called Barbecue Integrated Inc. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

The deal, expected to close in January, would make Sun the owner of all or part of 34 concepts operated or franchised by Boston Market [5] Corp., Bruegger’s Enterprises [6], Fazoli’s [7] Restaurants, Friendly Ice Cream Corp. [8], Garden Fresh Restaurant Corp. [9], Real Mex Restaurants [10], Restaurants Unlimited [11] and Souper Salad. Sun, which has more than $10 billion under management, has numerous investments outside of the restaurant industry. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

The deal had been expected since Darden disclosed Nov. 7 that it was narrowing the field of bidders to a Sun Capital affiliate in an attempt to forge a sales agreement within 30 days. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

Darden, which owns the Red Lobster [12] and Olive Garden [13] chains, recently completed a $1.4 billion acquisition of Rare Hospitality International [14] Inc., parent of The Capital Grille [15] and LongHorn steakhouse brands. Darden’s other casual-dining holdings are the Bahama Breeze [16] and Seasons 52 [17] chains. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

“Darden will be involved during the transition period and support the Smokey Bones business and team every step of the way,” Drew Madsen, Darden’s president and chief operating officer, said. “We are extremely appreciative of the contributions of our friends and colleagues at Smokey Bones, and we wish them well.” —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

The sale gives Smokey Bones, which will remain based in Orlando, an opportunity to put the sizzle back in the eight-year-old brand at a time when barbecue is growing more popular, Baines said. Under Darden, the clarity of the concept had been muddied by multiple management teams and overly aggressive growth, he said. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

“I feel that with the unique combination we have in capitalizing on the barbecue platform and the expertise of Sun, we have the long-term potential to go national and on the way become the best barbecue chain in casual dining,” Baines said. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

That strategy varies greatly from the one Darden began to pursue earlier this year. In May, it closed 54 of the chain’s restaurants and announced that it was putting the remaining 73 up for sale. Clarence Otis, Darden’s chief executive, who earlier had served as president of Smokey Bones, said at the time that while guests continued to give the Smokey Bones’ experience solid marks and a core of restaurants had good sales and earnings levels, the concept was no longer a meaningful growth vehicle. Darden also began distancing the concept from its barbecue orientation, noting that regional taste preferences posed challenges for a large-scale barbecue chain. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

Observers say that Baines has his work cut out for him. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

“First the challenge in the next two years is to get it right,” said Craig T. Weichmann, a veteran restaurant analyst who now operates a boutique banking firm bearing his name. “The reason it is in this condition is because the volumes weren’t right and margins weren’t expanding. Expanding would be the last thing on my list, and I would think the last thing on the new owner’s list.” —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

Weichmann noted that one of Darden’s problems with the concept was unit size. With sizes of about 7,000 square feet, average unit volumes of $3 million were insufficient, he said. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

Weichmann noted that Sun’s financial muscle is considerable. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

“If anyone has the capability of turning it around, it would be Sun,” he said. “Culturally, Baines is now with an owner that knows how to shepherd a problem child.” —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

Sun Capital said it intends to expand Smokey Bones beyond its current 73 units in 17 states. Anthony Polazzi, vice president of the holding company, said the concept has “the right ingredients for future growth: high average sales per restaurant, strong restaurant management teams, established operating systems and a unique barbecue flavor platform that is growing in popularity.” —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

For now, Baines said officials would concentrate on creating new barbecue flavors and adding new beers and frozen drinks. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

“We…will continue to expose our consumers to new barbecue flavor profiles with limited-time offers, and we recently launched ‘chill time’ drink specials, our name for happy hour,” he said. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

Baines said one of the key elements to the Smokey Bones’ experience is the centrally located horseshoe-shaped bar featuring numerous television screens for sports fans. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

“We see this as a center where unity can build from in the whole restaurant, where people can watch sports, though it is not a sports bar,” he said. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

Darren Tristano, an executive vice president for Technomic Inc., a Chicago-based consulting firm, said one of the brand’s biggest hurdles is defining itself. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

“I think it is a confused concept,” he said. “It has been difficult for people to see whether it was a barbecue joint or a sports bar. It never felt like you’ve taken a journey to a Southern rib shack.” —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

Baines contends, however, that Smokey Bones is not intended to be a no-frills barbecue joint. Instead, it is designed to offer “spirited casual dining,” he said. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

“We have a nicer atmosphere and we offer more than pieces of meat slathered in sauce,” he said. “People who hear the word ‘barbecue’ think of other types of places. But we offer a quality food experience in a quality environment.” —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

Nonetheless, Baines added that barbecue is one of the hottest flavor platforms in America. “In our research we looked at 300 menus and barbecue showed up 600 times,” he said. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

John Kinsella, CMC, CCE, AAC, president of the American Culinary Federation, agrees that barbecue is hot. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

“We are seeing it on more and more menus—Thai, Chinese, Southern,” he said. “It is big, and in fact our next regional conference will be about barbecue.” —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

Tristano added that barbecue has a great deal of appeal among ethnic groups, such as Hispanics and African-Americans. Technomic’s data shows that the 15 largest barbecue chains posted roughly $1.8 billion in sales in 2006, a 9.4-percent jump over 2005. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

Despite barbecue’s growing popularity, Weichmann said, it has taken chains like Famous Dave’s of America [18] and Red Hot & Blue [19] time to carve out their own niches. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

“There are ongoing regional debates about barbecue,” he said. “Such things as, ‘Is it pork, or is it brisket, dry or wet?’ And so many people like their hometown barbecue. These are some of the reasons why so many chains have resisted going nationally. —Under the new ownership of multichain power-house Sun Capital Partners Inc., the

“It is not an impossible turnaround, but difficult. They must drive sales to make the unit economic model work.” —Under the new ownership of multichain power-house Sun Capital Partners Inc., the