Today’s special: flounder
By JOSH KOSMAN Last Updated: 12:00 AM, October 5, 2011
Posted: 12:00 AM, October 5, 2011
Private-equity titan Marc Leder’s sprawling restaurant portfolio is beginning to give him indigestion.
The Sun Capital Partners co-founder, who has grown a 10-brand restaurant portfolio, including Chevy’s, Friendly’s, Boston Market and Souper Salad, into one of the largest in the US, is seeing his eatery empire crumble in the midst of a stagnant economy.
Sun’s Cypress, Calif.-based Real Mex operation, which controls over 200 restaurants under the Chevy’s, El Torito and other brands, filed for bankruptcy protection yesterday amid rising food costs and a restrained ability to raise prices.
One month earlier, SSI Group, owner of Souper Salad and Grandy’s, in which Sun owns a 45 percent stake, cooked up a similar restructuring recipe. Separately, Sun’s Friendly’s franchise is expected to file for protection this month.
On top of that, Sun’s Golden, Colo.-based Boston Market chain of 490 locations is struggling, and its 600-unit Captain D’s chain of seafood fast food is not doing well, according to restaurant strategist John Gordon of the Pacific Management Consulting Group.
Sun, with more than 2,000 restaurant locations, is not alone, as the entire restaurant sector is under pressure. So far this year, five chains with at least 100 locations each have filed for bankruptcy protection, according to research firm Technomic. Last year, that number was two. In 2009, it was one.
Leder has not let Sun’s faltering restaurant empire slow him down.
This past July he rented a Bridgehampton estate for $500,000, according to Page Six, and became the talk of the tony Long Island hamlet for holding parties in which guests cavorted nude in the pool and performed sex acts, while scantily dressed Russians danced on platforms and men twirled lit torches to a booming techno beat.
A Sun Capital spokesman declined comment.