Before the coronavirus, Dan Kluger’s eclectic, farm-to-table restaurant in New York City was teeming with patrons and boasted a healthy bottom line supplemented by a thriving events business. Shut down overnight by the pandemic, the award-winning chef wonders if he will ever reopen.
Loring Place opened 3 1/2 years ago in trendy Greenwich Village after Kluger spent a hefty sum renovating space in a historic Manhattan mid-rise building. The restaurant was a success, tracking the booming national economy. The chef and his 125 employees served 300 to 700 diners nightly, generating monthly revenue of $750,000 to $900,000 — 15% of which he attributes to group events. Then, the coronavirus hit, damaging Kluger’s business even before government-mandated closures.
“We had an amazing Monday, Tuesday, and Wednesday. I don’t think anyone really understood the scope of this yet. People were blaming it on the media and saying it was being overhyped,” Kluger told the Washington Examiner, recalling conditions just two weeks ago, prior to the pandemic upending life across the United States. “All of a sudden, Thursday, the phone just started ringing and it was cancellation after cancellation after cancellation.”
Now, nearly all of Kluger’s employees, who earned $500 to $1,500 per week on average, have been laid off and are applying for unemployment insurance. He said the process has been “harrowing” for many of them, partly because the government has been overwhelmed with applicants and unable to process all claims.
“They were beyond devastated,” Kluger said Monday as he described the process of laying off staff in an interview for Behind Closed Doors, a Washington Examiner podcast.
“I sat there and watched these people come in and pick up some food, because we gave away food to the staff as we were closing,” Kluger explained. “Having to see people and watch them in tears, you really understand that’s a cross of their own anxiety, and they don’t want to not come to work. They enjoy coming to work and the family that they have there and the team and the thought that they don’t know when they’ll be back.”
From his home office in Westchester County, about 35 miles north of New York City, Kluger, 46, is working furiously to keep his restaurant afloat. The chef declined to reveal his profit margin, but he said it was slim — in line with the industry standard of just 8% to 14% (labor costs eat up 40% to 45% of the revenue his restaurant generates.)
Kluger said he can probably manage to pay the monthly lease and other remaining overhead costs for up to three months — if he stretches available resources. Thousands of independent restaurants just like his are faced with similar circumstances, Kluger emphasized, if not worse.
Not only did Loring Place have to throw out food it purchased for a customer base that evaporated because of the coronavirus shutdown, it owes vendors about $100,000 for food and other goods and services purchased before the pandemic brought business to a screeching halt. Additionally, relaunching the eatery after the crisis recedes will require startup capital.
President Trump and congressional leaders spent the last several days negotiating legislation designed to bolster an economy crippled by a near-complete shutdown triggered by government mandates for social distancing.
Kluger, without laying blame or picking sides, was clear that policymakers in Washington had better move quick and be bold. Absent aggressive and swift government assistance to keep his and similar small businesses afloat, he said, prospects for the future were increasingly uncertain.
“We’re trying to keep as much liquidity as possible right now because the hope is that we’ll be able to open again,” Kluger said. “I just want to make sure that we are protected and are being heard and are being represented at the table. The biggest fear is that we’re not.”
