Prime 121 hurt by lean times

Owner blames economy as eatery seeks Chapter 11

By James Paton, Rocky Mountain News (Contact)

Friday, May 9, 2008

Prime 121 has an ideal location, an experienced proprietor and a celebrity supporter: Denver Broncos quarterback Jay Cutler.

But in a tough economy, those advantages couldn't prevent the owner of the trendy steakhouse from declaring bankruptcy.

"This is the worst economy I've seen," said Scott Fickling, owner of Prime 121 and former general manager of the Palm in Denver. "I'm reorganizing and trying to protect my business."

The company, 121 Investors, filed for Chapter 11 on Wednesday, court documents show.

Fickling said Friday that he is keeping the doors open as the bankruptcy proceeds and hopes to overcome his financial problems. He is paring expenses, including ending lunch and complimentary valet service.

The restaurant at 121 Clayton Lane, across the street from the JW Marriott, has generated a lot of buzz since launching in October 2006. Cutler eats at the steakhouse and has been paid for promotion. Actress Eva Longoria Parker and her husband, Tony Parker of the San Antonio Spurs, dined there in January.

Fickling, who has owned restaurants in Dallas over the years and once served as the general manager of the Palm in West Hollywood, cited mounting food costs and delivery charges as well as a weakening economy in general.

"People who would have ordered a bottle of wine now are getting two glasses," he said. "It's a different atmosphere right now."

Prime is hardly the only restaurant business under pressure. The parent of Village Inn filed for bankruptcy last month and closed a number of locations. Denver-based Vicorp Restaurants shut down four of its 54 restaurants in Colorado, including the one on Columbine Street close to Prime 121.

Although each story is different, many eateries face the same dilemma.

"Restaurants now are getting squeezed on the revenue and the cost side," said John Imbergamo, a local restaurant consultant who represents Prime rival Elway's and several other spots. "When the economy softens, restaurants, because they feast on disposable income, are some of the first affected. Then there are cost increases in food and labor."

Recent minimum wage increases also factor into those expenses.

Imbergamo said that the restaurants he advises are faring well, though they are hardly immune to the harsh climate, and he was surprised to hear about Prime.

"Everything had pointed to success," he said.

Denver has a lot of steak competition, another challenge for Prime. The previous resident at 121 Clayton Lane was the steakhouse Bob's, which failed.

"I'm going up against Del Frisco's, Capital Grille, Elway's," Fickling said. "All these people have deep pockets, and I don't."

Prime, which posted $2.6 million in sales last year, has seen its cash flow decline sharply, he said. The past two months have been particularly difficult. Sales in March dropped by about $80,000 from a year earlier, he estimated. April was down, too, he said.

"It's been a roller coaster," said Fickling, adding that February had been strong. "It came to a point we had to do something to stop the bleeding. But we're not going out of business."

A group of creditors includes Robinson Dairy, Southern Wine & Spirits, Hamilton Linen, Seattle Fish Co., Xcel Energy and Lombardi Brothers Meats, according to the filing in U.S. Bankruptcy Court in Colorado. Creditors are owed more than $600,000, the papers show.

Fickling hopes to survive and to emerge from bankruptcy in about six months. He said he has rejected offers for the restaurant, believing things will improve.

"Looking at my location and volume, we'll catch back up," he said. "I suspect some restaurants will totally go out of business."

patonj@RockyMountainNews.com or 303-954-2544