Randomly Noted

David Ansill's play on a "Sloppy Joe" sandwich. His is the "Sloppy Jose."

As many Randomly Noted readers know, this blogger looks for every opportunity he gets to write about the business of food – especially when the subject is good restaurants with inventive chefs.

Last year, two of my favorite restaurants went out of business – victims of the recession. They weren’t the most expensive places in the world but the food was high-end and on the upper end of what people might want to pay to go out and eat. The first to shutter was in Philadelphia and called “Ansill” after the chef by the same name – David Ansill. Prior to running this sizable restaurant with a bar and pretty decent sized staff, David ran a 32-seat BYOB with a handful of staff.

The other restaurant I loved that went under was called Pamplona and it was based in New York on 28th Street. Chef Alex Urena originally had a high-end Spanish restaurant but saw the economics of that would be tough even in good times. He went smaller scale with tapas at Pamplona. The small plates were pricy but very good. He closed last fall.

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It’s early, but here’s my nomination for quote of the day:

“People will be able to see that the order of chili cheese fries they are considering will be 3,000 calories.”

So said Margo Wootan, a nutrition advocate, as quoted in today’s Los Angeles Times.

The subject is a little-known provision (at least little known to this blogger) in the just-passed massive federal health care reform bill: a requirement throughout the U.S. for chain restaurants, vending machines and some other venues to post the amount of calories contained in every item they sell.

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Colleague Joe Checkler has updated us on the Landry’s saga – this is the company that runs some restaurant chains and a casino – Rainforest Cafe and Las Vegas’s Golden Nugget casino, among others. I blogged about this some months ago – noting that the Landry’s Chairman, CEO and majority owner, Tilman J. Fertitta, seems more interested in the financial acrobatics of acquiring the firm than running it. The latest is the Landry’s share price has risen about 40% above Fertitta’s latest buyout bid, indicating that the hot money (including Bill Ackman’s Pershing Square) expects him to go higher if he wants to get a deal done. As the U.S. economy recovers, people will return to restaurants in the Landry’s category – mid-price joints with novelty concepts – and for the sake of Landry’s long-term shareholders (if there are any left) one hopes Fertitta knows enough to keep an eye on the food, the service and the ambiance. The legal wrangling pitting big shareholders against Fertitta is surely a distraction as he defends his efforts against allegations that the CEO and his board have violated their fiduciary duties in supporting the boss’s takeover efforts. Given this very tangled web, Joe writes, with understatement, that getting into Landry’s shares now “could be risky.”

Remember my recent blog about the problematic Landry’s Restaurants buyout? DJN has just reported that activist hedge fund manager Bill Ackman has amassed a 9.6% stake in the firm and opposes CEO Tilman Fertitta’s planned $238 million buyout at $14.75 a share. The fireworks should be interesting, given Ackman’s history (eg Target.) Landry’s shares closed Friday at $16.18 – a sign investors broadly think the restaurant operator will land in another suitor’s arms at a higher price. As I pointed out the other day, a company would have difficulty thriving under the leadership of a fellow who has spent the past two years trying to take it private. Companies, even those which own the likes of the Rainforest Cafe and the Golden Nugget casino, need TLC.

A little more than a dozen years ago or so we still had companies that were anything and everthing Internet, raising millions of dollars from investors even though the enterprises had little sales and no profit, and often no business plan other than to have a URL. Flash forward to today. We are hobbling out of a credit crisis and recession and along comes another company that is peddling its services only on the Internet and arguably services tied to a sector that is about as discretionary on the spend front as you can be – restaurants. So why would investors be so keen to buy this company’s initial shares?

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When we aren’t feeling great about what’s going on today, we often get lost in our dreams of yesteryear. Something like that is apparently what’s going on in parts of the midwest and southeastern portions of the U.S.  Steak N’ Shake, a restaurant chain that has a retro-looking menu that focuses on basic eats like burgers, fries and hot dogs, reported pretty impressive earnings today. The company made $2.3 million versus a loss of $2.8 million a year ago. Same-store sales were up 2.4% because traffic had increased by 7.8%. The average check declined by 5.2% but what’s impressive is that more people were walking through the doors to head out to eat. Okay, we aren’t talking three-star restaurant. But it is impressive to see people spending money at restaurants – a trend we began to note on Randomly Noted a month or so ago. Steak N’ Shake shares rose nearly 20%, or $1.84, to $11.05, on the NYSE today.