Restaurants still risky business

Two weeks before his new restaurant opens, Sam Massarweh is watching as two downtown Cape Girardeau eateries close their doors. On the same day last week, Gatherings Cafe at the Marquette Towers and Sidewalk Sandwich Co. closed up shop for good.

The restaurant climate here makes Massarweh nervous.

"Of course it does," said Massarweh, whose Phoenicia Middle Eastern restaurant officially opens June 12 at 1000 N. Sprigg St. "Any time you open a small business like this, it's extremely risky. I don't know the reasons they closed, and I can't speculate. We just have to focus on doing what we know best and try to keep our restaurants strong."

Gatherings Cafe closed because its owner is struggling with health problems. A sign on the door at Sidewalk Sandwich Co. says equipment problems caused some food to go bad so they had to close up.

I can't say for sure as to whether those restaurants were struggling. But Cape Girardeau has been a revolving door for smaller restaurants that come up with their own themes instead of the big-name chains like Olive Garden, Logan's and Texas Roadhouse.

Instead, the likes of Cafe Azu, Shangrila, Chez Natchez, the Bavarian -- and now Gatherings Cafe and Sidewalk Sandwich-- come and go, usually in pretty rapid fashion.

Massarweh hopes to avoid being too specialized. He believes Southeast Missourians are open to different types of food, especially within the last 10 to 15 years.

But he's not taking any chances.

He wants people to enjoy the Middle Eastern food, such as gyros, falafels, hummus and baba ghannoug. But he's also offering more traditional American food such as chicken tenders, steaks, shishkabobs, etc.

"We don't want to limit ourselves or our clientele," he said. "We want them to come to Phoenicia and enjoy both."

Still, Massarweh knows starting a new restaurant -- even reopening one that used to exist, like Phoenicia -- offers no guarantees.

"I gave up a great job to do this," he said. "I had the security of a big corporation and all its benefits to do this. If I didn't have passion or believe in the product, I wouldn't have done that."

A friend of mine commented last week that Cape Girardeau doesn't support its smaller nonchain restaurants. He made a good argument. I also think there's an argument to be made on the other side -- Bella Italia, Saffron and Buckner's are examples.

* K's avoiding bankruptcy: Speculation over the future of K's Merchandise, which has a store in Cape Girardeau, has been soaring over the past few weeks. News that came across my desk sounds like good news for the 50-year-old, family-run business that operates 17 stores in Illinois, Indiana, Iowa, Missouri and Kentucky.

Gordon Brothers Group, a Boston-based merchant banking and finance company, has announced that an out-of-court settlement between Decatur-based K's and its creditors is on the horizon. A settlement would allow K's to continue operations and avoid bankruptcy.

A lawyer from the New York law firm representing the ad hoc committee of major unsecured creditors that was formed in April to assess and negotiate repayment options confirmed that an agreement has been reached between the committee and the Gordon Brothers Group.

"The next step is to send it out to some 2,000 creditors for a vote," said Jay Indyke, a partner in the law firm of Kronish, Lieb, Weiner & Hellman. "The information is being provided to creditors right now, and the committee hopes and expects that we will achieve approval from the creditors on this deal before the end of June."

Earlier this year, Gordon Brothers Group stepped in with new financing after LaSalle Retail Finance, K's previous lender, declared the company in default. The company said in a statement that this much-needed cash infusion helped K's avoid legal action by creditors.

Senior management from K's and Gordon Brothers Group can now focus on finding opportunities for renewed profitability and keeping K's legacy alive, according to the statement. There are already plans underway to broaden the store's merchandise selection, including revamping the furniture department to capitalize on trends and aggressively expanding the jewelry selection.

* Cable vs. phone companies: In April, the sponsoring Missouri senator pulled the plug on legislation that would have made it easier for telecommunications companies to compete against cable companies. In March, I wrote a story outlining the issue. Sen. Jason Crowell of Cape Girardeau was an outspoken critic of the legislation.

Meanwhile, Kansas is moving forward. AT&T announced last week it would be spending $247 million over the next two years bringing cable television competition to Kansas communities. Did we miss the boat here?

Scott Moyers is the business editor of the Southeast Missourian. Send your comments, business news, information or questions to "Biz Buzz," 301 Broadway, Cape Girardeau, Mo., 63702-0699, or e-mail them to smoyers@semissourian.com or call (573) 335-6611, extension 137.