Monday Business Briefing: Wild Eggs and Joella’s expanding, Republic Bank booming, Yum! split likely, drone startup takes flight, and more
Welcome to the Oct. 19 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
Wild Eggs ramps up expansion in other markets
Wild Eggs Operations LLC is moving forward with its plans for the rapid expansion of its Wild Eggs brand, signing multiple leases for out-of-town locations.
Founders Shane Hall and J.D. Rothberg brought on New Albany-based equity firm Patoka Capital to infuse the company with the cash needed to more rapidly expand Wild Eggs into other cities.
Wild Eggs currently has eight locations — four in Louisville, one in Denver, two in Lexington and one in Bowling Green, Ky.
The restaurant company expects to open at least four more next year.
“Our intent is to get to a point where we are opening six to 10 a year over the next three to five years,” Rothberg said.
Rothberg told Insider Louisville the company has signed a lease on a store in downtown Nashville that will open during the first quarter of 2016. It will be operated by Bowling Green franchisee Angela Reeves.
Wild Eggs Operations also signed three leases for company-run stores, one in downtown Indianapolis, one in Carmel, Ind., and another in Fishers, Ind. Two will open during the first quarter of 2016, and the other will open later that year.
The company also is looking for a Southern Indiana store, possibly near Veterans Parkway, but has not signed a lease, Rothberg said.
No cost estimates are ready for any of the new stores, but Rothberg said costs typically range from $800,000 to $1.2 million.
Each store will employ 40 to 50 people, meaning within the course of a year, Wild Eggs’ employment numbers will jump from 300 people to about 500 people.
Rothberg said he isn’t concerned about opening three new locations within a span of six to eight weeks.
“We understand our concept, our construction building, all that is pretty straight-forward. Our challenge is finding the right people,” Rothberg said. “People are by far the most important facet of this business.” —Caitlin Bowling
In other HOT restaurant expansion news…
Editor’s Note: This story has been updated. It incorrectly stated where Joella’s is expanding.
Joella’s Hot Chicken concept must be on fire.
The hot chicken joint just opened Sept. 1 at 3400 Frankfort Ave. in Crescent Hill, and now the operators have plans to open a Middletown location as well as one in Lexington and one in Indianapolis.
The fast pace is a little surprising, but Joella’s co-owner Tony Palombino already has quite a bit of experience in Louisville and Indianapolis with his popular Boombozz Craft Pizza and Taphouse.
It’s been a good year for Republic Bank
Republic Bank had a stellar third quarter in 2015, with 8 percent growth compared to the same quarter in 2014. Republic reports a net income of $5.6 million for July through September, with year-to-date income coming in at $27.7 million — that’s a whopping 18 percent increase over last year.
In a statement released along with the bank’s quarterly earnings, Republic CEO Steve Trager had this to say: “We continue to be proud of our growth in earnings. Producing such positive results continues to be challenging in today’s environment, as interest rates remain near historical lows, and the ability for banks to grow and earn positive margins on their products remains difficult. We have been able to overcome these headwinds and produce solid product growth in 2015 through our existing banking center footprint and our correspondent and warehouse lending channels.”
Trager also touted Republic’s planned acquisition of Cornerstone Community Bank in St. Petersburg, Fla., a market in which Republic already had a presence. Calling it a “prudent bank acquisition,” Trager expects that deal to close during the first quarter of 2016.
Currently, Republic holds $4 billion in assets and has a total of 40 banking centers, with 32 of those in Kentucky; the remainder are in Florida, Indiana, Ohio and Tennessee.
A Yum! Brands split looking more likely
The revelation that a strategic review of the Yum! Brands company structure is almost complete, in combination with the appointment of a new activist investor to its board, may point to an imminent separation of Yum! divisions.
The Louisville-based restaurant giant recently announced its board of directors and management have nearly concluded a year-long strategic review that includes options related to the company’s structure. The outcome of the review will be detailed “shortly,” according to a news release.
Yum! CEO Greg Creed didn’t have much to add in his canned comment.
“This has been a comprehensive, year-long process, working with our financial and legal advisors, and we are near its conclusion,” he said.
The release immediately moves on to the appointment of Keith Meister to Yum’s 14-member board of directors. Meister is founder and managing partner of the investment fund Corvex Management.
“We are pleased to welcome to the Board one of our largest shareholders, Keith Meister, whose deep financial expertise will be invaluable to us as we conclude our disciplined review of our strategy and structure,” David Novak, Yum’s executive chairman, said in the release.
Corvex is one of Yum’s largest shareholders with nearly 5 percent of the company’s common stock.
What the news release doesn’t note is that in May of this year, Meister called for Yum! to spin off its China division, according to a story from Bloomberg at the time.
“We think there is a clear, obvious way to create value, and that’s to separate the business,” he told Bloomberg. A separate Chinese division could be valued at $40 to $70 per share, Meister went on to say.
“Don’t be comfortable with 10 percent EPS growth for the next decade when you can have 20 percent,” he said.
Couple that interview from May with the following quote from the October release announcing his board appointment, and it’s not a hard leap to make.
“We have had a constructive dialogue with the Board and management over the last several months,” Meister said in the release. “This is a company with multiple avenues for unlocking significant long-term value, and I look forward to working with the Board and management to expeditiously finalize a plan that we believe can deliver that value to shareholders.”
Should Yum! decide to spin off its China division, which many analysts, not just Meister, have called for, it is unclear what type of impact that would have on the company’s Louisville headquarters.
The China division already has many of its own operations separate from the main office, including its own CEO Micky Pant.
Dreaming of Drone World
This may be little more than a pipe dream, but they have a glossy post card and a snazzy website. Apollo Drone World, if it comes to fruition, will be a premier venue for gaming with arial drones.
The way the website describes it, it’s pretty stinking cool:
When completed, Apollo Drone World will be the only 24/7 indoor multi-skill level competitive drone entertainment venue in the world. It will convert a large warehouse into 8 large football field size competitive rooms.
These giant 25 ft tall rooms with roof panels opening to as much as 50 ft height, will each be created into a REAL WORLD unique theme (i.e., forest, maze, caves, police academy, etc.). 15 drones will compete in each room at a time. Some rooms will equip drones with laser tag for combat, while in some room drones will combat humans on the ground.
Currently the folks behind Apollo Drone World are hosting Drone Parties. Your little drone enthusiast and 11 of her friends will be treated to a two-and-a-half hour visit by drone experts and four drones. They’ll set up a huge net enclosure, and the kids will be trained to operate the drones from outside the enclosure. Your kiddo also will be gifted a remote controlled drone of her very own. The whole package is $249 plus tax.
Some restaurants struggling to find and retain workers
When KingFish closed the doors of its Blankenbaker store in September, the local fish restaurant was able to offer jobs at its two other locations to all 30 of its employees. That was partly because KingFish has had a “rough year” finding quality employees, said Greg Wortham, the company’s controller.
Although he wasn’t sure why this year has been tougher than others, Wortham said KingFish isn’t the only one struggling.
“You can see ‘help wanted’ at every restaurant,” Wortham said.
When Insider Louisville recently visited Con Huevos to talk about its new online ordering system, it was the same story. Owner Izmene Peredo said she was having trouble finding help for her restaurant as well.
It turns out that a labor shortage in the restaurant industry isn’t only a concern locally, but at the state and national level as well.
Finding experienced workers is hard, said Stacy Roof, CEO of the Kentucky Restaurants Association.
The inability to find good workers is “a big deal around here, and it has been for a while,” she said. “A lot of places are opening and also they’re getting ready for the holidays, so I think they are all struggling over finding enough labor.”
Some also attributed it to the opening of new restaurants and the growing economy.
Bruce Grindy, chief economist at the National Restaurant Association, noted in an editorial that employment at restaurants and bars nationally has grown at least 3.5 percent since 2011.
In July and August, 18 percent of restaurateurs marked recruiting and retaining employees as the No. 1 challenge facing their business, according to a National Restaurant Association survey. That is still lower than in 2006 and 2007 when 30 percent listed that as their No. 1 challenge.
“However,” Grindy wrote, “it signals that many restaurant operators are experiencing the double-edged sword of stronger customer traffic and a shrinking labor pool that comes with an improving economy and job market. ” —Caitlin Bowling
Fund for the Arts hires new Impact Officer. Here’s what that means…
Clearly there might be a position titled “Impact Officer” at a dentist’s office, but what about at Fund for the Arts? Well, according to the press release announcing Kat Abner as the organization’s first-ever Impact Officer, her duties will be to “develop an innovative framework and set of tools to measure outcomes, track, communicate and increase the impact of the arts across the region.”
That’s a lot of jargon for one title, but it sounds like Abner will be working alongside the Fund’s newly formed Impact Advisory Committee to help measure just how far their reach goes in the community. According to the press release, she’ll also work with the Education Advisory Council and lead its “EVERY CHILD Arts Education Initiative” to ensure every kid in Louisville has access to the arts.
Abner has a background in community development and nonprofit management having previously worked as program officer for the Corporation for National and Community Service.
“Fund for the Arts is committed to building a stronger, more vibrant community,” explained Christen Boone, Fund for the Arts president and CEO, in the press release. “Whether it is fueling economic activity, attracting talent, improving educational attainment or supporting an overall healthier community, the arts play a vital role. Working with local and national arts leaders, Kat will be an invaluable member of our team as she develops, measures and helps to accelerate the transformative impact of the arts on this community.”
Beam in Android
Beam, a startup team of Louisville expats living in Columbus, Ohio, finally have released the Android version of their smartphone-connected toothbrush. With it they launched a new game called Boulders and Band-aids.
The game is described like this: “Dodge boulders, collect stars, and navigate the depths of outer space. Brush with your app open to collect hearts, which get you more game plays.”
I’m sure the Beam Guys have done their market research, but, shoot, when I’m brushing my teeth in the morning my eyelids are at half mast, I’m brushing my teeth with one hand and digging around for my hairbrush with the other while trying to not knock the coffee mug off of the edge of the sink. Games? I can barely remember to put in earrings in the morning, let alone “navigate the depths of outer space.”
Chef Maria Bell closes Old Louisville business, plans to open two more
Greek chef Maria Bell wants to move back to the East End.
Bell owned Chef Maria’s Greek Deli in St. Matthews but closed it earlier this year to open Chef Maria’s Bistro on Oak Street in Old Louisville. Now she has closed the bistro and told Insider Louisville she has two new businesses in the works, both of which she hopes to open somewhere in the East End.
The first is called 7 Meals 7 Days and will provide customers with daily home-cooked meals. Customer will be able to order meals for seven days or 14 days, she said, and either pick them up or have them delivered.
Customers also will be able to indicate how many people they are looking to feed and if they have any allergies, Bell said, adding that the site is still under construction.
“It is a big problem having fresh meals,” she said.
The second concept is a burger and gyro restaurant. The menu will offer 12 different gyros, eight or nine burgers, a Greek salad, hummus and various types of baklava, Bell said.
“That’s how it is going to be, simple,” she said.
The Old Louisville bistro’s last day was Sunday, Oct. 11. Bell said in a video on Facebook that she closed the restaurant on Monday and Tuesday, intending to reopen, but opted to remain closed.
“I decided, nah, I need to take a break,” she said in the video.
Overhead at the restaurant was too much, and the customer traffic wasn’t enough in Old Louisville, Bell told IL.
“People came, followed me, but they were not happy doing it over and over again,” she said of her East End following. “They just started telling me that ‘You need to come back; you need to come back.’ ”
So that’s what she is trying to do.
Manufacturing jobs abound at upcoming fair
More than 40 manufacturers will be on hand at a job fair presented by Kentuckiana Works. These companies include: Algood Foods, Cardinal Aluminum, Carpenters Union, Chester Pools, CEVA Logistics, ConAgra Foods, Dakkota, Dant Clayton, Fort Dearborn, Gazelle, GE, Hollander Sleep Products, Koroseal, LINAK, Owens & Minor, Paradise Tomato, Piston Automotive, PPG Architectural, ProLift, Reinhart Foods, Ryder Logistics, Tower International, Voith Industrial Services, Westport Axle, Wirecrafters and more.
The event is Oct. 23 from 10 a.m. – 2 p.m.at Kentucky Manufacturing Career Center, 160 Rochester Dr. (Airport Industrial Center) in south Louisville. It’s free. Bring your ID and Social Security card. More information is available at the center website. — Melissa Chipman