In the world of IPOs, international expansion, and private equity teams, there’s no such thing as a “traditional” next move when a restaurant is looking to grow.
While exploring all the potential avenues for new growth, it became clear to the team at the Vetri Family restaurant group, which includes Alla Spina, Osteria, Amis, Lo Spiedo, and Pizzeria Vetri, that taking on additional bank debt for every new location was simply not a scalable method.
So, in a move that’s surprised many restaurateurs, founders Marc Vetri and Jeff Benjamin are working out the final details of the sale of their restaurant group to the popular retail company Urban Outfitters Inc.
Benjamin, who will be acting as the company’s chief operating officer, understands the skepticism that many owners have about the loss of independence that comes from being bought by an outside company.
However, Vetri’s acquisition wasn’t the result of the brand putting up a “for sale” sign in its proverbial front yard. The process was much more organic, and even more importantly, it was conducted with a company Vetri had already established trust with.
“In any walk of life, changing how you do business or who you do it with is always a tough decision,” Benjamin says. “It’s made much easier when you know you have the right people working with you, and literally from day one, I left the first meeting knowing this was happening with the right people.”
In fact, when the Vetri Foundation For Children (now known as the Vetri Community Partnership) was launched in 2010, the charitable group’s inaugural chairman of the board happened to be Urban Outfitter’s CEO.
With Vetri hoping to craft a new growth strategy and Urban looking to expand more into foodservice, talks of a partnership between the two Philadelphia-based businesses happened naturally.
“It’s a strategic move to not only meet our growth goals, but to meet them without sacrificing our current culture, entrepreneurial spirit, or quality,” Benjamin says. “It wasn’t a difficult call for us because [Urban] is a corporation we have a tremendous respect for and fit well with.”
Benjamin feels no apprehension about loosing control of Vetri’s future. In fact, the sale is allowing him to spend more time working on just that, while shedding some of the many other hats he’s been wearing for the restaurant group handling legal work, accounting, and human resources, to name a few. Now, instead of Benjamin and his core team of three handling all management tasks, Vetri has Urban’s entire support system contributing.
“I entered the hospitality business because I love going into the restaurant at the end of my day of work in the office and getting to meet people and interact,” he says. “Now, I’ll likely be able to do that even more, and my other decisions will be made easier by having a whole team of experienced people assisting me.”
For instance, as Benjamin continues to search for new locations and negotiate leases, he has an entire legal team behind him to offer advice. Plus, he’s confident that Urban’s ownership will help ensure smart, measured growth, not just fast growth. Unlike deals inked in many equity partnerships, Vetri and Urban have no magic number of stores planned that must open by a certain date. Instead, the restaurant group is taking advantage of the retail corporation’s sales and demographic information to hone in on promising new sites and decide which of Vetri’s concepts would be the best fit for a particular area.
In addition to expanding the pre-existing restaurant brands, Vetri and Urban are also in the process of developing an entirely new dining concept, with more details coming next year.
While Vetri continues to evolve and expand as a restaurant group, Benjamin says that customers can expect the exact same dining experience and quality they’ve come to expect, and that any design or operational changes that may come in future stores will do nothing but further elevate that experience.
The deal is expected to be finalized by the end of the year, and will not include the sale of the very first Vetri restaurant, which opened its doors in 1998.
“It took us 17 years to figure out that we had another step to take in our careers,” Benjamin adds. “And I’m thankful we’ve been able to build this organic relationship [with Urban], and we’re not second-guessing ourselves.”