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Eddie V’s mixes seafood with lounge atmosphere, spurring sales success

Eddie V’s mixes seafood with lounge atmosphere, spurring sales success

The recession has stalled growth for many American businesses, but not Eddie V’s Prime Seafood.

The Scottsdale, Ariz.-based restaurant chain continues to grow despite the downturn. The most recent outlet of the four-unit chain opened earlier this year, two more units are scheduled to open by the second quarter of 2010, and three other locations are on the boards.

The concept’s leaders are working to prove that customers are still willing to stomach higher price tags in exchange for good food, despite the state of the economy.

“Value comes at all price points,” said Guy Villavaso, owner and co-founder of Eddie V’s, where the average check runs in the $70 range. “We’re very conscious and very diligent about offering what we offer at the best possible value.”

What Eddie V’s offers is fresh steak and seafood at its Texas restaurants in downtown and north Austin and Fort Worth, and its location in Scottsdale, Ariz.

The concept’s inspiration comes from Villavaso’s childhood in New Orleans, where he says he grew up eating the best seafood in the city’s greatest fish houses. When he relocated to Texas, he and partner Larry Foles quickly saw a gap in the restaurant market. They realized that “people crave New Orleans cuisine,” Villavaso said of the concept’s origin in 1999. “If we could execute high-end seafood better than anybody else, that was an untapped market.”

Villavaso and Foles developed the idea of an inverted steakhouse, where seafood would be the main focus, while still offering high-quality steaks. The partners recruited their executive chef and partner John Carver to help them bring the concept to life.

“The anchoring philosophy is that everything is impeccably fresh and the best that you can buy,” Carver said.

Eddie V’s flies seafood in daily from Boston and turns it over within the next day onto a restaurant plate, with simple preparation and presentation. Popular items include the fresh, thickly cut Chilean sea bass, lightly steamed with a soy broth, and a Parmesan-crusted lemon sole with a fresh tomato and herb salad.

“Everything is very simple, with the main focus being the seafood that is on the plate,” Carver said, adding that the restaurant emphasizes the quality of food, service and overall experience. “That’s money in the bank to people who want to go out to eat.”

CHAIN FACTS

NAME: Eddie V’s Prime SeafoodPARENT COMPANY: Eddie V’s Restaurants Inc.HEADQUARTERS: Scottsdale, Ariz.MARKET SEGMENT: casual diningMENU: seafood and steakUNITS: 4SYSTEMWIDE SALES: $19.8 million in 2008LEADERSHIP: Guy Villavaso and Larry Foles, owners and co-founders, Eddie V’s Restaurants Inc.YEAR FOUNDED: 2000

It’s money in the bank for Eddie V’s as well. The flagship location in Austin did $9 million in business last year, and the Scottsdale and north Austin units did $6 million and $4.8 million, respectively. The latest location in Fort Worth has averaged $145,000 a week since opening in late January.

“In this [economic] climate that seems like kind of a head scratcher,” Villavaso said, “but we’re the new kid on the block, and I think we’re doing a great job of executing the concept.”

He estimates the startup fees for an Eddie V’s unit to be between $3.6 million and $3.9 million, with the funding coming from the company’s cash flow, bank debt, and Villavaso and Foles’ own capital.

Over the past 10 years, Eddie V’s Restaurants Inc. has grown to include two more concepts—the Wildfish seafood grill, with three locations in Texas, Arizona and California; and the Roaring Fork restaurant, with four locations in Texas and Arizona. The company’s sales in 2008 were $44 million. Right now, Eddie V’s and Wildfish are the company’s main growth vehicles, Villavaso said.

The menus at each Eddie V’s location are largely the same, Carver said, with some changes for regional specialties and seasonal dishes. While the entrées are about simplicity, the appetizers get a bit more creative, he noted. The calamari, for instance, which is cooked in a wok with cashews, scallions, crispy noodles and a red-chile soy sauce, showcases a more innovative presentation.

And while the appetizers are about originality and the main courses are about minimalism, the desserts are about decadence. The two top-sellers are the baked-to-order molten-chocolate Godiva cake and the hot bananas Foster cake with butter-pecan ice cream that is flambéed at the table. The latter has been especially popular in the new Fort Worth location, said Richard Sabatowski, general manager of the restaurant, which seats a maximum of 441 people.

“It flies out of here,” he said. “You wouldn’t believe it.”

Eddie V’s success isn’t rooted only in its menu, Villavaso said, explaining that atmosphere is equally important. Three of its four locations offer a lounge featuring live music seven days a week, with “funky old rhythm and blues” music playing throughout the restaurant, which Villavaso says couples the “romance of dining” with the “music of the ’40s.”

Customers in the Fort Worth unit seem to appreciate the vibe, Sabatowski said.

“It creates a different dynamic and energy in the lounge,” he said.

The same goes for guests in downtown Austin, said Geoff Freeman, general manager of that unit, which seats up to 290 people.

“People seem to really enjoy it,” he said. “I think it really comes down to the basic restaurant-ism: If you provide great food, atmosphere and service, you’ve got it. We strive to be the restaurant that’s unquestionably first choice.”

Despite an average capacity upward of 300 people in the concept’s prototype, Villavaso promises an intimate dining experience from every seat. Walking in, the V lounge is to the left, featuring the signature live music and a “dimly lit, nightclub environment,” along with a view of the oyster bar, Villavaso said. To the right is the dining room, with false ceilings and groups of booths, tables and chairs that give each area its own intimate feel.

While Eddie V’s hasn’t been able to avoid all of the pain of an economic downturn—Villavaso and Foles say they have had to pull back from several new locations they were considering—Villavaso says he’s continuing to look for new sites in hopes that the economy will soon even out.

Meanwhile, he’s enjoying the recession’s “silver lining”—construction costs are down roughly 20 percent from where they were eight months ago, and developers are offering the best deals to get commitments from quality concepts, he said.

“If you are one of the few that can commit, you can drive some very, very handsome economics, and we’ve been able to benefit from that,” he said. “We know that the economy will stabilize, so we are actively looking out for the best opportunities.”

For now, the Eddie V’s team says it is confident that it can weather the times.

“What we’ve come to find out is that people are looking for a good value for their dollar,” Carver said, adding that Eddie V’s customers count on the restaurant for a consistent experience. “They really identify with that, no matter what the economy is.”

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