June 22, 2023
New Livonia HopCat marks a change in strategy as the company recovers from bankruptcy
By Jay Davis June 20, 2023 03:10 PM The July 24 opening of the HopCat location in Livonia comes at a time when the Grand Rapids-based restaurant/bar chain is cautiously growing. Ned Lidva
By Jay Davis
June 20, 2023 03:10 PM
The July 24 opening of the HopCat location in Livonia comes at a time when the Grand Rapids-based restaurant/bar chain is cautiously growing.
Ned Lidvall, CEO of HopCat owner Project BarFly LLC, on Tuesday told Crain’s that the company is now on solid footing.
That financial stability comes a little more than three years after what was then BarFly Ventures LLC filed for voluntary Chapter 11 bankruptcy protection and had about $28 million in secured debt. In October 2020, it sold its assets to a pair of Texas-based private equity firms — Congruent Investment Partners and Main Street Capital — in a $17.5 million deal.
“We’ve come out of the pandemic era very stable,” Lidvall said. “Our businesses have been able to grow out of cash flow. There is essentially no debt on our balance sheets. All of our locations are profitable for the most part.”
The new Livonia location is in a 9,200-square-foot space at 17800 Haggerty Road that was the former home of Claddagh Irish Pub and had been vacant since 2019. Lidvall said it will be the final new HopCat to open this year. A new HopCat in Royal Oak opened in the winter.
The Livonia HopCat features a 40-seat wraparound bar at the center of the dining room. The bar will have 60 beers on tap.
It’s the 11th location total for a brand that at one point pre-pandemic had 15 locations. Lidvall said the company continues to look at real estate across the Detroit market for another location, but there are no specific plans for new bars.
Lidvall said Project BarFly is fond of the area.
“We love the Rochester Hills/Auburn Hills area. We love the Hall Road corridor,” he said. “We’re prioritizing right now and focusing on Livonia. The Livonia spot is one of the prime locations in the market. We’re excited about it.”
Lidvall said he believes HopCat will perform well in a suburban market. He cites the success of the Beltline location in Grand Rapids, which opened in 2018, as a reason for that confidence.
Ned Lidvall
Price point plays a role in that projection, too. The Livonia HopCat neighbors higher-end restaurants including
Mitchell’s Fish Market and Bravo! Cucina Italiana.
“We grew up as a semi-urban brand. I think the HopCat brand is essentially non-chain enough that it can do well anywhere,” Lidvall said. “All the locations look different. I think we provide an alternative with food- and bar-forward platforms that play well in the suburbs.”
The wide-open Livonia HopCat has seating for close to 270 guests. That includes two outdoor patios and a large rectangular wraparound 40-seat bar that Project BarFly Vice President of Operations Craig Stage said is the biggest in the company. The bar area features five TVs and 60 beer taps. The location also features a 40-seat area that can be used for private parties. It will also include an arcade room with a selection of games for guests to play for free, according to Project BarFly Brand Manager Michele Ary.
The Livonia location will have about 140 employees.
Credit: Jay Davis/Crain’s Detroit Business
HopCatt is readying its new Livonia location at 17800 Haggerty Road to open July 24.
TVs are hung high throughout the space, with more to be added, according to Stage. The HopCat-staple wall of classic album covers can be found on the northeast side of the restaurant.
“The smaller space is easier to manage,” Stage said. “It also creates a really good vibe for the guests, too. If you’re spreading people out in multiple rooms, it can be hard to create a good vibe on certain days.”
Going forward, Lidvall said that smaller concept will become the norm for HopCat. Future locations would be around 6,500-7,500 square feet — significantly smaller than the more than 11,000-square-foot locations in Midtown Detroit and Royal Oak.
“Our brokers are out beating the bushes for new sites,” Lidvall said. “We’re working hard to right-size the business. The Livonia space, that’s more of what we’re looking to do. The new Royal Oak space is bigger, but we were in the area before and we were confident it would perform well and it is.”
Lidvall nor Stage would provide revenue projections for the Livonia location, or financials for other locations.
Project BarFly is working to stay at a customer-friendly price point, Lidvall said. He said the company has done a solid job navigating what he termed a very difficult inflationary period.
Credit: Jay Davis/Crain’s Detroit Business
Project BarFly Vice President of Operations Craig Stage shows off the new Livonia location on Tuesday, which is scheduled to open July 24.
“At this point, our year-over-year inflationary numbers are flat,” Lidvall said. “We’ve had to do some things with some pricing to stay competitive because the industry says that fast-casual traffic is down slightly, where fine dining and quick casual are up. Our challenge now is to keep our value proposition strong enough so people don’t trade down.”
Lidvall said HopCat ownership strongly supports the business. Congruent Investment Partners and Main Street Capital have been patient as the company worked to manage its way through the pandemic, he said.
Sustainable growth is the next step, according to Lidvall.
“Internally, (Congruent Investment Partners and Main Street Capital) are probably more anxious to grow than we are,” Lidvall said. “But they want to make sure we’re able to grow successfully. We see a lot of companies that get out over their skis and grow too quickly. We don’t want to repeat that.”
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