Monday, July 27, 2009

Seasonal Amherst?

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Yeah, back twenty years ago the town pretty much rolled up the streets in the sumertime (and the living was not easy.) But these days Amherst is a lot busier with all the summer camps and conventions at our tax exempt institutions (Judie's was busy last night for instance.)

So I find it a little odd that Papa Gino's, who only opened this past March closed for the summer (reminds me of those "gone fishin" signs). It does demonstrate that employees are the number one overhead--but rent in that location can't be far behind.

This from the March 2 Daily Hampshire Gazette:

Company representatives who came before the Select Board, including manager Joseph Kimmel, said they are confident that, even though the popular pizza-by-the-slice Antonio's restaurant is located directly across the street, many college students are already familiar with its products from living in the Boston area.

164 comments:

Anonymous said...

They are familiar with the taste of their pizza. It tastes like cardboard.

Anonymous said...

"It does demonstrate that employees are the number one overhead..."



Does it? How, Larry?

LarryK4 said...

Well I can tell you over 75% of the town $60+million budget goes towards employees, so it's just an informed guess.

Why else would you close for two months and still have to pay the $7,000/month rent, unless staying open would cost even more?

The only thing you save by closing is employee pay. Simply math actually.

Jared said...

It's actually $8k/month and a 10-year lease.

Ryan Willey said...

They have gone fishing with Gilligan and will soon be castaways like all the others who attempted a business in that location.
Farewell and ado to you fair Spanish ladies.

Anonymous said...

The last I knew, D'Angelo's still owns the building. D'Angelo's and it's sister chain Papa Gino's are owned by the same company. So rent is not the issue. Employee pay? I'm not sure about that. This is Papa Gino's were talking about. Besides the manager's salary, everyone else is making slightly above minimum wage. But, you add up what it costs to run those ovens in the kitchen, the air conditioners for the dining room. Then throw in all the other expenses in running a restaurant including employee pay, it's just not worth it. The few kids that are here for the summer are going across the street to Antonio's anyway. I'm sure those "company representatives" knew that from day one.

I know a few salespeople in the area and they tell me the restaurants,bars and liquor stores including Judie's are having a not-so-hot summer. For some it's really bad. Certainly when you compare it to last year. Just because a place is busy on a weekend night doesn't mean they're not feeling the bad economy. I'm sure they have their down time. And just like the Monkey Bar, Chez Albert and yes, maybe even The Pub, I guarantee you those full time non-student cooks and managers are getting more than $10 an hour.

It will be interesting to see what happens this fall in Amherst when the students return. From what I understand, many students had trouble finding work this summer. Which means not much extra school year spending money. And it looks like most parents don't seem to have the expendable cash lying around.

Sad to say that many business owners could be in for a shock.

LarryK4 said...

A rising tide float all boats, and a tsunami swamps them.

Anonymous said...

96k a year for rent,electic 1-2k per month, phone and directory ad 750 a month,salaries at $8 per hour x say four employees =$32 per hour times 80 hours per week. This business model doesn't make sense to me. Something smells fishy to me.

LarryK4 said...

Now do the math for Planet Fitness at the Mall selling one year memberships for $99

Anonymous said...

I don't understand the numbers at Planet Fitness. Do you have any explanation?

LarryK4 said...

Planet Fitness uses the "churn and burn" strategy whereby they hope to sell 100 of those $99 memberships (thus intaking $10,000--not bad for a hot July week.)

They then pray that 75 of them drop out after a week or two. Thus they are really only servicing 25 people for that $10,000 or $400 net revenue per person for the year (which is still too low a price.)

But if most of those folks actually show up over the entire year...

Anonymous said...

Sounds like the old Yiddish joke, we lose $1.00 per item but make up for in volume.

Anonymous said...

"It does demonstrate that employees are the number one overhead..."


Larry, you are so anti working class it's not even funny. It's shameful actually.

Yep, just another Amherst elite wanna be who wraps himself in "god and country" whilst privately (and not so privately) bemoaning the little people...

What a fraud.

Anonymous said...

"But if most of those folks actually show up over the entire year..."

They won't, and they don't at your place either. People join health clubs for lots of reasons but only a small percentage do it because they love eliptical machines and treadmills. Planet Fitness will stay open because they know human nature. Everyone wants to play the guitar but no one likes guitar lessons.

Anonymous said...

The old Registry location in Hadley is quickly becoming a ghost town too - Subway says it will be reopening in a new location "next year". Butternuts is saying "lease issues" have caused their closure.

Xenos said...

Something smells fishy to me.

possibilities -

long term lease could have been structured in such a way as to hedge for inflation;

impending bankruptcy will allow HQ to dump lease if unprofitable or to twist landlord's arm in negotiations;

unsophisticated franchisee just got separated from six-figure franchise fee - is ruined but does not know it yet;

all of the above, none of the above...

Xenos said...

Never mind - Dangelo Inc. owns the building, has tied up all their properties in a ginormous cross-collateralization deal. They have a top-notch Boston law firm putting this all together, god save them.

Anonymous said...

Maybe the lease is a way to prove to the banks that income is coming into the property. Again, something smells fishy to me. I never understood what was happening with that building. Looks like Xenos has some idea.

Xenos said...

Oooh- I think that is it, Anon. Building up the rent rolls for the $50,000,000 recapitalization on all the HQ owned stores.

The last time I saw a financing deal like this was for an REIT that bankrupted spectacularly in the late 80s. The BK case took 11 years to work out, and I was involved in title litigation resulting from it in 2006.

We are in the second, maybe third inning of the real estate collapse.

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スタービーチ said...

突如として消えたスタービーチが電撃復帰!長い年月をかけて蘇った進化したスタービーチをお楽しみください

スタービーチ said...

であえる確立NO.1を誇るスタービーチが帰ってきた!であいの要素がいっぱいつまった当サイトでであいのきっかけ掴みましょ

SM度チェッカー said...
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スタービーチ said...

聖なる場所スタービーチで愛を育てませんか。メル友や恋人、セクフレなど貴方が理想としている関係がスタビでは築けちゃいます。素敵なであいから発展させていきませんか

競馬予想 said...

2010 競馬予想 各厩舎・調教師から届けられる最強の馬券情報を限定公開!本物の オッズ 表はコレだ