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Bravo Brio CEO details turnaround plans

Casual-dining operator plays with restaurant size, labor shifts under industry veteran Brian O’Malley

Brian O’Malley has spent 20 years patiently working his way up through the ranks at Bravo Brio Restaurant Group Inc. 

O’Malley served as Bravo Brio chief operating officer since 2010, before replacing former CEO Saed Mohseni in January. 

After finally reaching the CEO seat in January, O’Malley wasted no time in working to reverse years of weak sales and declining traffic at the company’s two Italian casual-dining chains, Bravo! Cucina Italiana and Brio Tuscan Grille. In just the past three months, he visited 80 of the company’s 116 restaurants, meeting with 160 general managers.

“We’ve been working on a lot,” O’Malley told Nation’s Restaurant News. “We knew we wanted to take some chances. We’d played it safe for a while.”

Bravo Brio’s brands include 51-unit Bravo! Cucina Italiana and 65-unit Brio Tuscan Grille. Chris and Rick Doody founded the company in Columbus, Ohio, in 1987. O’Malley interviewed with Bravo Brio to become general manager of the third Bravo restaurant in Dayton, Ohio, in 1996.

“I interviewed with Rick Doody,” O’Malley said. “It was a three-hour interview. But he spoke for about 20 minutes. He kept getting up and saw something in the restaurant that he didn’t like. 

“I had a feeling that this is the kind of company I could work for. He had a true passion — there was nothing more important than the guest. What happened in the restaurant took precedence over everything else.”

O’Malley said that working with Bravo over the past 20 years was “a great education.” He was at the company as it took on some private-equity dollars, and then when it went public in 2010. 

But his education has become starker recently: Same-store sales at both chains have been lackluster for years due to declining traffic. The brands are struggling amid a weak environment for casual dining, but especially concepts that specialize in Italian fare. 

Over the past two years, same-store sales have fallen a cumulative 8.5 percent at Bravo, and 7.3 percent at Brio. The declines are taking a toll on profits: Although revenue grew 4 percent last year, operating income fell 80 percent. The company’s stock lost half its value over the past year. 

O’Malley is honest about the challenge. “That’s why we felt like, going into this year, it was so important for us to hit the ground running,” he said.

Part of the company’s plan to grow its business involves shrinking its locations, at least for part of the week.

Bravo Brio plans to reimage restaurants by adding private party rooms, separated by glass, that could be opened up during Friday and Saturday nights when the restaurant is busier. 

To O’Malley, this strategy could help in two ways. First, it could attract more party dining, something the company cannot market today because of space constraints. “The banquet business has the opportunity to continue to grow,” he said. 

Second, the company can “create energy” by shrinking the useable space, he said. That enables the restaurant to operate more efficiently because it needs fewer people to run. 

“You can pull some labor out,” O’Malley said. He added that wait staff are happier because they have more tables and can make more money from tips. “Since you’re running with fewer people, they can turn more tables. That creates more energy.”

He added that it also improves customer satisfaction because diners get angry when they’re waiting for a table and see empty tables that are unused. 

O’Malley said the effort is designed to improve customer service and satisfaction. He noted that the private rooms can be opened up on busy weekends, and because they’re glass, diners won’t feel like they’re dining in an enclosed room.

But he added that rising labor costs in the industry are playing a role in the company’s move to reduce labor in the restaurants. “As you look at it, with overtime, we’ve got labor costs, minimum wage, we can run with fewer people at maximum productivity,” O’Malley said. “We maximize what we’re getting out of their hours.”

Indeed, O’Malley said he would rather employ more people working 36 to 38 hours a week at maximum productivity than with a bunch of people working just 20 hours a week. “You’re going to get better people if you have fewer people with more hours than more people at 20 hours,” he said. “They miss a lot, and their commitment to the business isn’t always the same.”

In addition to the smaller restaurants, the company is working on new menus at both restaurants. 

The company started its efforts in the Pittsburgh market, with what O’Malley called “Project Italia” at its Bravo restaurants there. The company has been in that market for years — its newest location there is 12 years old — and felt that it could benefit most from a refresh.

The company added 18 new menu items and plans to reimage the restaurants and change marketing there. It also went into the market and trained workers in the front of the house and the back of the house about service and hospitality.

The company hopes to complete reimaging of all five restaurants in May.

Bravo is trying more limited-time offers and is looking to introduce more value, especially at lunch. The test menu includes more healthful options, including gluten-free pasta and items at 650 calories or fewer. 

“For years, people have said they want to start eating healthy, but it was just a phase,” O’Malley said. “Now, I don’t think it’s as much a fad as it is a trend. It’s here to stay.”

Gluten-free options could be key for an Italian chain. Many Italian concepts are struggling to keep customers, and one reason is the proliferation of low-carb and gluten-free diets. 

“People are looking for a healthier way to dine,” O’Malley said. “We just said, how do we offer the same quality of product to those who are gluten free, or who just want to eat better.”

Contact Jonathan Maze at [email protected]
Follow him on Twitter: @jonathanmaze

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