Founder and CEO Dale Schwartz’s vision was to grow Pinstripes to 150 locations when he started the business 18 years ago.
There was never an interest in selling, even though Cracker Barrel approached the brand before it went with Punch Bowl Social (which didn’t end well). Pinstripes also garnered attention from Dave & Buster’s, which eventually acquired Main Event. There were many curious parties throughout the years. None of it felt right, Schwartz says. He thought any transaction “was going to get in the way of our culture to build something special.”
The founder, however, was intrigued by the idea of going public for the past seven to eight years because access to the stock market is “a permanent form of capital to just let us keep doing our magic,” he says. So when Schwartz and his team rung the Opening Bell on the New York Stock Exchange on Friday, it indeed felt right.
“There’s nothing that feels dramatically wrong or different about it,” Schwartz says. “It gave some early investors that have been investing now for 17–18 years some attractive liquidity. Our team, all our salaried team members that own stock options, it gave them some exciting—if not liquidity—some exciting paper wealth. And it just lets us focus on growing for another 20-30 years. Now we’ll have public shareholders as partners. I’ll continue to control the board so it helps preserve that culture and our ability to just manage this in the right strategic way.”
Pinstripes—a 15-unit social entertainment chain centered around bowling and bocce—reached the stock market by merging with special purpose acquisition company Banyan Acquisition. The agreement gave the chain $70-plus million in gross proceeds for opening new locations. That includes a $50 million senior secured loan from Oaktree Capital Management, which has the option to loan an additional $40 million.
The biggest benefit is that Pinstripes’ balance sheet is “far stronger than it’s ever been,” Schwartz says. He adds the company has always been attractive to landlords, but now previously hesitant stakeholders should be more willing to provide TA dollars. Additionally, the chain will soon hire a chief development officer to augment expansion efforts, particularly on the international front. For years, Schwartz looked into Mexico City, Dubai, Israel, London, Canada, and other major trade areas. That growth, which will come together via license franchise agreements, should begin accelerating. The extra capital will help with technology as well. Schwartz wants to implement projection mapping, or using objects as a surface for video projection. For instance, instead of pins, players could see dinosaur bones flying everywhere.
Schwartz describes the transition as “exhilarating,” but at the same time, it’s business as usual at Pinstripes. He predicts the investor community will respect where the brand is headed. In case there is pressure applied from outside forces, Schwartz won’t manage the business artificially for other people’s benefit.
“We’re not going to try to grow faster just to satisfy an analyst,” Schwartz says. “We stay true to our plans as much as we can. We don’t plan on doing anything materially different. Of course, we’ll certainly want to hit our numbers and do our best to do that. We’ll resist over-promising. I’d say as we went through the process, our expectations internally are very much aligned with the investor community. So that’s a good thing. That’s always great when you’re already on the same page.”
The company reported same-store sales increased 6.9 percent in Q3 (quarter ended January 7). On an annual basis, locations typically earn $9 million to $10 million per year in sales. Some reach up to $12 million to $13 million.
Different from most eatertainment concepts, an overwhelming majority of sales come from food and drinks. Revenue grew 14.1 percent to $32.2 million in Q3, including food and beverage lifting 14.2 percent to $24.9 million and amusement rising 13.9 percent to $7.3 million. Pinstripes labels itself as an Italian-American bistro, with a wide selection of pizzas, pastas, sandwiches, and entrées. Examples include Gnocchi & Vodka Sauce, Chicago-Style Baby Back Ribs, and Meatballs & Polenta. On many occasions, Pinstripes is a pure restaurant destination.
“That’s hard to do because we still have to break the stereotype,” Schwartz says. “When people hear bowling or bocce, they figure, ‘Well, how good can the food be?’ So that’s why the advantage of going public is to help that overall brand awareness.”
In terms of customer demographics, nearly half of the business is private events. And sales are no longer relying on pent-up demand; corporate gatherings are far stickier than they have been. Pinstripes will use moderate pricing in 2024, but Schwartz isn’t concerned since the usual guest is affluent and relatively inelastic in response to price hikes.
“We’re not as exposed by that, which is fortunate, but we’re still mindful of price,” Schwartz says. “I mean, food costs are as low as ever. Liquor costs are as low as ever. I mean, labor costs have been under control. So, even with some of the pressure that peers have had, a lot of our costs have gone down.”
In 2024, Pinstripes will open roughly six locations. One will be the transformation of a 46,000-square-foot space that was previously occupied by Uniqlo at Garden State Plaza in Paramus, New Jersey—a suburban enclave close to New York City. Another will come in Orlando with a ground-up unit located near popular destinations such as Target, Shake Shack, Chick-fil-A, and just half a mile from the entrance to Disney World. Other upcoming locations include replacing a Crate and Barrel in Walnut Creek, California (the Bay Area); moving into a former West Elm beside Nordstrom in Jacksonville, Florida; and placing two in the Seattle market near Amazon facilities. Meanwhile, the brand is working on filling the pipeline for 2025 and 2026.
Pinstripes will remain in a rhythm of six to eight openings per year. Currently, 13 of its 15 stores are based in suburban markets.
Although Pinstripes’ footprint is fewer than 20 units, its system spans from California to Connecticut. The company handles this distance through multiple ways, including a partnership with nationally recognized distributor Sysco, which provides 80–90 percent of food. Additionally, five to six years ago, the brand appointed regional directors to better handle matters at the store level. The third piece is that Pinstripes uses experienced team members to open new locations. Fortressing markets is important for building brand awareness and sharing resources too. Pinstripes is already open in San Mateo, which is only 25 minutes away from the upcoming Walnut Creek outlet. Same for Orlando and Jacksonville, two stores that will be 45 minutes apart.
“Yes, we’re 15 locations, but not spread thin,” Schwartz says. “Spread east and west all over the country potentially and then we’ll continue to fill in.”