In December 2008, Joe Bartolotta, president of The Bartolotta Restaurant Group, hired Keith Trafton, former president and chief executive officer of Super Steel, as chief financial officer of the restaurant company.
Super Steel is a Milwaukee manufacturer of rail cars and locomotives for the passenger and freight markets, a much different business than the restaurant business
At first glance, Bartolottta’s hiring of Trafton appears strange. But with a closer look, it makes perfect sense.
Between 2004 and 2008, Trafton helped orchestrate Super Steel’s return to profitability through the implementation of lean manufacturing and other improvement initiatives, and he managed nearly 900 employees in two facilities in Milwaukee and another in Schenectady, N.Y.
While it is in a completely different industry, The Bartolotta Restaurant Group has some similarities to Super Steel. It has about 460 employees spread throughout four high-end restaurants, a casual dining pizza restaurant, a custard and hamburger stand on Milwaukee’s lakefront and three catering operations throughout the Milwaukee area. It deals with a fast-paced, complex and perishable supply chain that varies in each property.
Bartolotta, one of the Milwaukee area’s most successful restaurateurs, quickly saw the potential in Trafton.
“Our company has always been about people,” Bartolotta said. “We hire people, not resumes and not necessarily for background. I look for a certain DNA that exists inside of people. And I knew Keith was smart enough to do this job.”
The Bartolotta Restaurant Group has had three other CFOs in the 14 years it has been in business. When Bartolotta started looking for a new leader in his finance department in the fall of 2008, he knew it might be a tough position to fill.
After a few interviews that didn’t produce the right results, The Bartolotta Restaurant Group turned to The Novo Group, a Milwaukee-based executive recruiting firm, which recommended Trafton.
“It’s very hard to find someone in this industry who has multi-unit experience, unless you’re coming out of a Pizza Hut or another national chain,” Bartolotta said. “My style is very hard to work with. I’m a very creative guy and I’m not very disciplined. Typically on the accounting side (people) are a little more structured, so there tends to be some drama in those relationships. Finding the right fit for me is everything.”
The Novo Group was able to identify Trafton as a candidate after spending time with Bartolotta and learning about what he was looking for in the CFO position, said Kimberly Kane, director of client solutions for Novo.
“We first started in hospitality. And we’re very picky. We weren’t finding the right people,” she said. “We then looked at the similarities in what he wanted in terms of experience and what he needed, and what industries where he might find people that can produce that.”
Trafton’s experience in finding efficiencies and reducing costs made him a good candidate, Kane said, as well as his leadership experience. But it was his personality that put him over the top.
“I liked Keith almost immediately. He has a quirkiness that I liked and a sincerity that I liked,” Bartolotta said. “And he’s committed to his family, which I think is a big deal.”
For Trafton, the job presented a unique opportunity to help grow an established brand in the Milwaukee area and to work in business-to-consumer sales, an area he hadn’t worked in before.
“It’s a wonderful opportunity to help a company grow,” he said. “We’ve got the greatest restaurants (in the metro area) with a lot of great business principles. If I can add value to make (the group) grow for the customers, for the family, for the employees, it’s a great experience.”
The move to The Bartolotta Restaurants has also improved Trafton’s quality of life, he said, allowing him to spend much more time with his five children.
Moving the needle
The Bartolotta Restaurant Group fared better than most restaurants during the Great Recession. Its 2009 revenues were down about 7 percent, largely because of the decline in catering.
Trafton has spent much of his first year learning the ins and outs of the business from the chefs, line workers and managers of group’s properties. With the insight and knowledge he has gained, he has helped the company develop financial measurement tools to help its chefs and managers track and analyze employment costs.
“What Keith came up with were tools we never had in the past, the ability to track labor on a hourly, daily, weekly and monthly basis,” Bartolotta said. “And he incorporated budgets and sales numbers into the labor numbers, so the managers were able to go through simple bar graphs and see where they were performing or weren’t performing.”
The color-coded metric measurement system will help the restaurant group manage labor and material costs as it grows in the future, Trafton said.
“We’re getting ready for acquisitions,” he said. “This last year, with the economy being so horrendous, we’ve had a lot of potential suitors ask us to come and take a look (at their properties). Our long view on the industry is now is the most opportunistic time we’ve ever had.”
In the last year, The Bartolotta Restaurant Group has hired six sales staff, responsible for increasing corporate sales for the company’s catering and restaurant business. The sales force is taking a business-to-business sales approach, building the company as a trusted partner to commercial clients, rather than a simple vendor, Trafton said.
“You’re trying to anticipate things so the next time they’ve got an event, they’re calling Joe or one of our sales team,” he said.
Trafton and Jennifer Bartolotta, Joe’s wife and director of strategic partnerships with the restaurant group, have spearheaded the move into B-to-B sales.
“That’s something in my business that nobody does – I guarantee it,” Bartolotta said. “You create more brand awareness than anything. We approach (customers) and say, ‘I don’t expect you to buy anything from me today, but tell me what type of events you do throughout the year that maybe we could help you with. Do you do an awards dinner? Do you do customer appreciation dinners?'”
Corporate catering has been weak throughout 2009 and early 2010, even as companies have started to recover from the recession, Bartolotta said.
“The companies have the money now, but they just don’t want to look frivolous,” he said. “We’ve seen a new trend of doing a lot of (in-house events). People are doing parties or dinners in their plants or facilities or their homes.”
The relationships that the sales force has built with corporate contacts has helped The Bartolotta Restaurant Group respond to changing trends in the catering field, Trafton said.
“We have had to create our business model so that it picks up on those nuances, rather than standing flat and waiting for the business to keep coming,” he said.
Trafton has also taken on key roles in negotiating new leases for several Bartolotta Restaurants projects.
“We’ve got two projects coming online this year,” Bartolotta said. “Keith has spearheaded those. That’s a huge benefit now that I don’t necessarily have to be the negotiator or the person trying to make the deal.”
Trafton is now in negotiations for the former Pieces of Eight property at 550 N. Harbor Drive, just across from Discovery World. Milwaukee philanthropist Michael Cudahy acquired the lease to the property last August, and The Bartolotta Restaurants plans to open a casual dining seafood restaurant there by June or July.
Demolition on the interior of the property began about three weeks ago.
Redevelopment of the Pieces of Eight property is particularly challenging because Cudahy’s lease with the Milwaukee Harbor Commission expires in 2018, Trafton said, and the future of the property beyond that is uncertain.
“Our hope, our desire is that it will be such a wonderful part of Milwaukee that (city officials) will want to continue that experience,” he said. “But as we look at it from a business decision, we have to have the reality that it may not be there. So as we build our build-out and prepare to market ourselves, we’re trying to stay within the confines of that seven year window.”
Cudahy’s desires to create a lasting impression at the site and Bartolotta’s desires to create a unique experience for his customers make the project a challenge because they do not want to make an investment that cannot be recovered in seven years, Trafton said.
“Those are both signatures of both Joe and Mike that we want to honor,” he said. “But that makes it a little more difficult within a seven year window. That’s why we’re working hard with Mike’s group to make sure it comes to fruition.”
Trafton is also working to secure a long-term lease for Mr. B’s Steakhouse in a new location. The restaurant is currently based at 17700 W. Capitol Drive in Brookfield. It will re-open near the intersection of 183rd Street and Capitol Drive in April.
The new facility will give the restaurant about 35 percent more space, Trafton said, and allow the group to upgrade its amenities.
“Our objective is to keep the same quaintness, that same experience that people had but to just add onto it,” he said. “That’s part of how we grow in the Milwaukee market – to expand our current properties as well as collaborating with some of the people who really love Milwaukee.”
The recession has taken a heavy toll on the restaurant industry over the past two years. Many consumers have eaten out less as they cut back on discretionary spending. A large number of restaurants closed during 2009, and there are many operators of still-open properties that are now looking to get out of the business.
“There are a lot of people who want to get out of the restaurant business now,” Bartolotta said. “The banks are putting the squeeze on them – they don’t want the restaurants on their balance sheets.”
During the last year, Bartolotta Restaurant Group looked at about 30 restaurants for sale. However, the company is not likely to acquire any more restaurants this year because of its Pieces of Eight and Mr. B’s projects.
“Our growth strategy is to maximize, first of all, the customer experience,” Trafton said. “If we take on five projects, something is going to fail in our system that is going to disappoint our customers.”
By this summer, Bartolotta will have four restaurants and one catering location on Milwaukee’s lakefront, along with restaurants in Wauwatosa and Brookfield and catering operations in downtown Milwaukee and Whitnall Park in Hales Corners.
The restaurant group launched Nonna Bartolotta’s, an Italian-style restaurant in General Mitchell International Airport last April. Nonna Bartolotta’s is operated by SSP America, a restaurant operator that operates facilities in more than 40 airports.
“We put our name on it, we branded it, we developed the restaurant completely and we generate a royalty there,” Bartolotta said. “It’s always busy. It’s busy at 6 a.m., it’s busy at 10 at night. Your sales per square foot ratio is like nothing else on the street. It’s our hope that we’d get ten of these someday in airports around the country.”
While Milwaukee’s appetite for high- end dining is limited, there is still room for growth, Bartolotta said.
For 2011 and beyond, the restaurant group is eyeing growth on several fronts.
Because many Milwaukee-area residents do not routinely travel to other parts of the metro area, areas such as Brookfield, the North Shore and some South Shore suburbs could present future growth opportunities.
“There are always people we have to expose to our restaurants,” he said. “It also allows us to dominate a specific marketplace like Mr. B’s in Brookfield. I think there’s plenty of room for more restaurants out there of a specific type. (Brookfield) is saturated with family dining and casual dining, but anything over a certain check average, there are very few choices. That’s our niche.”
The company has already looked at several opportunities in the northern Chicago suburbs and will likely look to Madison and the Fox Valley in the future, Bartolotta said.
“Where we want to try to figure out how to make money is how to leverage our brand in ways where we don’t have significant capital investment,” he said. “To do that, we have to find partnerships, consulting arrangements and management contract arrangements.”