No restaurant is immune to the challenges of staying in business, not even those once at the pinnacle of fine dining.
— Kristen Hawley
On Jan. 5, Le Cirque will close its doors at 151 East 58th Street in New York.
After declaring bankruptcy in March, the restaurant’s inability to turn its finances around has come as something of a shock to many in the food world. As recently as September, it was the setting for a fundraiser hosted by President Donald Trump at which guests paid up to $250,000 per couple.
“The rent was unsustainable,” says co-owner Mauro Maccioni. “So rather than harm the Le Cirque brand, NYLC [New York Le Cirque] decided to vacate the space. NYLC the operating entity is shutting down, but the Le Cirque brand will move on.” The company that actually owns the Le Cirque brand maintains 10 additional locations worldwide, including Le Cirque at the Bellagio Las Vegas and Le Cirque Signature Mumbai; in an earlier interview with Bloomberg, Maccioni noted that NYLC filed for Chapter 11 in order to reorganize and protect the other leases.
The decline of the storied restaurant, which is located in the same building as Bloomberg LP’s headquarters and has a Bloomberg terminal in its café, has already been detailed; its precipitous fall, however, has not. Now, records in New York bankruptcy court, including a breakdown of its expenses and income for the month of August, show a snapshot of the restaurant’s challenges.
An increase in expenses, some related to payroll, were blamed by Le Cirque in its initial March filing, in which it said it could not keep up with its rent. By May, it was $135,000 in arrears on a cost that averaged $50,000 a month, according to transcripts.
Using a report the restaurant filed on Oct. 4, readers could make a forensic financial analysis of an institution known more for impeccable service than what that service cost. The results were enough to raise industry eyebrows: Overall, during August, Le Cirque grossed almost $466,000 on food and drink. In the same period, the restaurant spent $506,635—money that went into rent and back charges ($151,000), kitchen labor ($57,000) and food ($73,700), plus such other costs as taxes and utilities. Its net loss was $40,666.
The restaurant spent $20,000 on seafood, $17,576 on meat, $10,881 on produce, and $5,513 on bread. It bought only $738 worth of caviar. (Osetra sells for $120 an ounce on the dinner menu). And it invested $39 in music and entertainment.
“Rent is high and sales are low in general for the stature/cost of this type of restaurant,” says Alex Stupak, chef and co-owner of the nearby Empellon Midtown. (At Empellon’s more central location of East 53rd Street and Madison Avenue, rent is “under a million annually,” according to Stupak). “This is a combination of normal/perpetual rising New York expenses, plus a tired restaurant with top-tier management whose eyes might be off the ball.”
There were some bits of good news. The restaurant spent a modest $4,800 on beer and liquor; sales of which were just shy of $18,000. It also auctioned off a wine collection of around 380 bottles over the summer. An inventory of some of its most-prized vintages estimated that nine bottles of a 1989 Château Le Pin could go for as much as $24,000, and five bottles of a 1995 Château Le Pin might be worth $22,000. Ultimately, the auction brought in $160,000, court records show.
Yet, Le Cirque’s revenues were low in banquet sales, which accounted for just $12,000 for food, $2,200 for wine, and $60 for beer and liquor. “August is a miserable time for banquets, as is the entire summer,” says Michael Whiteman, President of Baum + Whiteman, international restaurant consultants. “It could be that during five high-season months, Le Cirque could generate, just as a guess, $1.3 million per month. That would make the revenue picture somewhat more tolerable.”
“It’s so unfortunate that a restaurant that had so much to do with how restaurants evolved in America would end the way it has,” says Stephen Lofreddo, president of Seasoned Hospitality, a restaurant- and hospitality-management company. “Track the history of Le Cirque and the chefs that started there—Daniel Boulud, David Bouley—so many other great people who worked in the kitchen. Sirio [Maccioni] almost singlehandedly brought this style of hospitality to a certain era in American dining.”
Mauro Maccioni is certain the story isn’t finished. “We brought great value to One Beacon for over 11 years, and we know we achieved our objectives for us and our landlord,” he says. “We intend, and are working on, a new location that is similar to the original Le Cirque, both in location and in size. We are confident that we will be a good amenity for our future building and the neighborhood we will be in.”
Maccioni says that Le Cirque’s final dinner on New Year’s Eve will be a “blow out.” He also hints at a December party with celebrity chefs and famed opera singers. “And we intend to open a new Le Cirque in New York, sooner rather than later.”
Additional reporting by James Tarmy
©2017 Bloomberg L.P.