How Bohlsen Restaurant Group is navigating COVID changes

How’s business? Michael Bohlsen is equivocal. "The restaurants that are open are doing well," he said. "The ones that are closed, not so much."

Along with the Poll Brothers and Anthony Scotto, the Bohlsen Restaurant Group is a leading purveyor of fine dining on Long Island. At its pre-pandemic peak, BRG was running eight properties on Long Island. Now, only Tellers in Islip, H2O in Smithtown and Prime in Huntington are open, as is The Harbor Club, an event space just north of Prime.

Bohlsen, who owns the company with his brother, Kurt, described a methodical approach to culling the herd. "When restaurants reopened in June, we went with the ones that had spacious dining rooms, outdoor dining and high check averages to support our infrastructure and overhead." H2O in East Islip was relatively small and had no outdoor space; Monsoon in Babylon, also lacking outdoor space, "thrives on being packed to the gills."

Neither the casual Pizza Parm nor the midlevel Italian Verace, both on the same Islip block as Tellers, had the check prices that Bohlsen was looking for, but Verace did have a lovely and spacious patio that was drafted to handle Tellers’ overflow. "We had 60 seats outside and the choice of filling them with $55 Verace checks or Tellers checks for twice that." And, with Verace’s kitchen closed, those meals were handled by the Tellers staff, adding more savings. (The post-pandemic plan for Verace’s interior is a transformation into Tellers Next Door, serving Teller’s menu or handling its events.)

Before indoor dining reopened, BRG pivoted to takeout. Initially all the restaurants offered it but, gradually, the operation was consolidated at H2O on the North Shore, Tellers on the South. "The numbers weren’t there," Bohlsen said. "People will drive 40 minutes to Tellers for dinner, not to pick up a cardboard box full of food." Then too, except for the neo-traditional pizzeria, Pizza Parm, the restaurants were not set up for delivery. Bohlsen noted that third-party delivery services (Grubhub, Uber Eats, DoorDash) take up to 30% of the check and that made the proposition "impossible."

Another innovation that has borne only moderate fruit is Central Market by BRG, "a boutique, chef-curated marketplace that delivers the finest, hand-selected ingredients direct to your door," according to its website. At first, the site operated like a virtual butcher shop, specializing in the cuts of meat sold at Tellers, but now its stock in trade are what Bohlsen calls "idiot-proof finish-at-home kits," such as the four-course filet mignon Wellington meal kit for four ($130). "We’ve seen a lot of demand, but, again, figuring out how to deliver it and still make a profit is a problem," he observed. "I don’t know if we will continue it post-pandemic."

If neither initiative made money, they were valuable nonetheless. "One, they kept people in the building, food moving in and out of the walk-ins. A vacant building has its own set of problems." They also kept employees who wanted to work grounded and gave the kitchens the ability to provide meals for more than 100 employee families.

Most important, according to Bohlsen, the programs meant that BRG didn’t have to lay off anyone, though he noted that there were employees who decided to not come to work or, in some cases, to find other lines of work. The company’s workforce fluctuates throughout the year; during the summer of 2019 it was 450. It now stands at 275.

By the time BRG reopened the three restaurants for dining, the management team knew that it was going to sink or swim on its strongest suit: fine dining in an à la carte setting. "A la carte" is the industry term that distinguishes restaurants from catering. Whereas the Poll Brothers’ holdings comprise only restaurants (six of them), Anthony Scotto’s comprises five restaurants and three large event spaces. As bad as the pandemic has been for restaurants, it has devastated the events sector, whose gatherings have been limited to 50 people.

Bohlsen reported that BRG lost 90% of its banquet business, but he considers himself lucky that his one dedicated event venue, Harbor Club, is adjacent to Prime. "Mostly we were using Harbor Club to handle the Prime overflow," he said. "If we didn’t have Prime, Harbor Club would not have been able to exist."

As for Prime itself, its savior was outdoor dining. "I cannot use enough superlatives," he said. "Outdoors was a life saver for us — not just for business but for diner and safety, and the pure joy of eating outside."

Situated alongside Huntington Harbor, Prime, the largest Bohlsen restaurant, could seat more than 400 people, pre-pandemic. While outdoor capacity was able to remain at around 175, indoor (plus covered porch) shrank from 255 to 140. But, to augment check averages, Prime discontinued its lower-priced "dockside" menu, requiring all diners to order from the regular one, with steaks and chops ranging from $44 to $89.

While Prime’s business was slightly off this summer, the fourth quarter (Oct. to Dec.) exceeded last year’s. Bohlsen attributes this to the collapse of travel, movies and theater. "Restaurants were the only places to spend those entertainment dollars." Tellers and H2O also performed well, but the three restaurants couldn’t bolster the whole group. Across BRG, he said, business was down by 35 to 40% "We lost our shirts," he said, "and I think you’d be hard pressed to find any fine dining restaurant that didn’t."

Bohlsen is optimistic about the post-pandemic future. BRG owns all its Long Island properties and carries no debt — in this regard it is atypical of local restaurants, most of which pay monthly rent. But he firmly believes that fine dining has a bright future. The danger zone for restaurants, he believes, is in the middle. "Fast casual and fast food have been doing well and will continue to do so. It’s the moderate restaurants that have been hardest hit, and will have the hardest time going forward."

But fine dining, he said, "is much more than sustenance. It Is entertainment. It is the show. It is where we go to enjoy the good times, seek company in the bad times, share time with friends and family and mark the seminal moments in our lives."