CYPRESS Calif. Real Mex Restaurants Inc. are hoping industry veteran Richard “Dick” Rivera has the experience and savvy to reverse the company’s flagging fortunes. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
As the newly appointed president and chief executive of the Mexican casual-dining company, Rivera, a former top executive with 1,700-unit Darden Restaurants Inc., faces the challenge of enhancing sales and improving store-level execution at Real Mex at a time when much of casual dining is hurting. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
With 227 restaurants in 13 states and three countries—including 27 franchise and 11 international licensed units—Real Mex’s three primary brands include 70-unit El Torito Restaurants, 95-unit Chevys Fresh Mex and 32-unit Acapulco Mexican Restaurants. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
In addition, Real Mex operates nine more-upscale El Torito Grill locations, two Sinigual Restaurants, five Casa Gallardo locations around St. Louis, and one-offs Las Brisas in Laguna Beach, Calif.; Who-Song & Larry’s in Vancouver, Wash.; and El Paso Cantina in Torrance, Calif. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
Collectively, Real Mex brands form the nation’s largest Mexican casual-dining company. However, like most operators in the casual-dining segment, Real Mex has been struggling with declining sales as consumers stay home or trade down to less-expensive alternatives. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
Real Mex’s situation is exacerbated by the fact that most of the company’s restaurants—155 locations—are in California, a state that has been particularly hard hit by the recession, suffering a 10.5-percent unemployment rate and the third-highest home foreclosure rate in the United States. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
Rivera, who joined Real Mex April 7, most recently was president and chief executive with Sarasota, Fla.-based restaurant management and investment company Rubicon Enterprises LLC, a management and investment company with ownership in the franchise operation of four T.G.I. Friday’s locations and six Marlow’s Taverns. The company also has an investment with the fledgling Doc Chey’s Asian Kitchen chain based in Atlanta. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
Rivera is known for his work with Darden Restaurants Inc., where he was vice chairman, president and chief operating officer from 2002 to 2004. From 1997 to 2002, he served as president of Darden’s Red Lobster chain. Before Darden, Rivera served in top executive positions at Chart House Enterprises, Rare Hospitality International, Applebee’s, T.G.I. Friday’s, Del Taco, El Chico, and Steak and Ale Restaurants of America. He also served as chairman of the National Restaurant Association from 2007 to 2008. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
Rivera replaces Steve Tanner, Real Mex’s chief financial officer, who had been serving as interim chief executive since Fred Wolfe resigned in December. Tanner remains in the role of chief financial officer. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
Wolfe’s departure followed a house cleaning of the board by the company’s new owners, who took control of Real Mex in November 2008. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
The company’s former primary owner Sun Capital Partners Inc. relinquished control of Real Mex to private-equity firm Kohlberg Kravis Roberts & Co., along with hedge funds Farallon Capital Management and Canyon Capital Advisors, in a debt swap for equity. Still a shareholder, Sun Capital’s holdings are now reportedly about 15 percent. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
Tanner said he bristles when the “turnaround” term is used in connection with Real Mex. While the company has opportunities to grow sales and better position the organization, he said, Real Mex “runs pretty tight” and has maintained its bottom line with little erosion. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
Real Mex recorded a significantly larger net loss in 2008 than a year earlier, mainly because of millions in goodwill impairment charges and slowed sales. For the year ended Dec. 28, the company booked a net loss of $177.2 million, compared with a loss of $23.5 million in 2007. Goodwill impairment charges totaled $163.2 million in 2008. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
Revenues for the company’s latest year fell 2 percent to $553.7 million, reflecting a 2.3-percent decline in same-store sales, which Real Mex blamed on the slowing U.S. economy. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
With Rivera at the helm, the company is looking to boost sales with the addition of more value-priced menu items below the $8 and $10 range, depending on the brand, to appeal to price-sensitive customers, Tanner said. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
Chevys, for example, earlier this month announced a new line of Fresh Mex Lunch Bowls as part of the chain’s “everyday value” menu. The line includes five cooked-to-order options with prices starting at $7.99 in a limited-time offer through Aug. 10. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
The challenges the company faces now stem primarily from “problems from how it was acquired and financed,” Tanner said. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
The company has struggled against rising debt levels and the needed refinancing of senior notes and a credit facility that each matured earlier this month. The company’s indebtedness, as of Dec. 28, totaled $161.8 million, including capital lease and unamortized debt obligations. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
Sun Capital bought Real Mex in 2006 from Bruckman, Rosser, Sherrill & Co. for $359 million in cash. The previous year, Real Mex had acquired the then-103-unit Chevys chain out of bankruptcy for $78 million. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
Real Mex’s growth plans have been put on hold until the economic picture improves. After opening five restaurants last year—two Singual units in New York and Florida and one El Torito and two Chevys in California—the company has no plans to open new units in 2009. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
While the more authentically Mexican El Torito concept has been seen as a growth vehicle for the West Coast in recent years, Chevys, with its relaxed cantina-style Tex-Mex menu, has been seen as the brand with potentially national appeal and franchising of that brand will continue, according to the company’s annual report for the December-ended fiscal year. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
Real Mex also includes Real Mex Foods Inc., which is a manufacturer and distributor of Mexican food products for both the company’s restaurants and other foodservice operators, as well as retail consumer goods. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of
Sales of food products outside the Real Mex system increased 15.7 percent from 2007 to 2008, according to the 2008 annual report, and officials said they plan to expand that end of the business with the development of a line of core Mexican food products for retail sale, including burritos, enchiladas and tamales. —A recession is not an ideal environment in which to take the helm of a struggling business, but the owners of