Transitioning from building a successful seafood restaurant chain to focus on retail, e-commerce, and other channels is almost like going home for Legal Sea Foods President and CEO Roger Berkowitz.
On 22 December, the Boston, Massachusetts, U.S.A.-based company announced it is selling its 27 restaurants to PPX Hospitality Brands, which also operate the Smith & Wollensky and The Strega Group restaurant chain.
Berkowitz, however, will retain exclusive ownership rights of the Legal Sea Foods name in retail, e-commerce, and other non-restaurant channels – all areas that Legal already has a presence but will now expand significantly.
“My grandfather had a grocery store, which sold fine quality meats, and then my father opened up a fish market,” Berkowitz told SeafoodSource. “Then, we sort of fell into the restaurant business by mistake. The space next to the fish market opened up, and my folks opened up a restaurant.”
After building a successful restaurant chain – prior to the pandemic, Legal boasted more than USD 200 million (EUR 164 million) in annual revenue and 33 locations – Berkowitz said he believes it is time for he and his family to focus on sales via other channels, including QVC and e-commerce.
The COVID-19 pandemic – and resulting significant losses that Legal and most other restaurants experienced – forced Berkowitz to re-think the future of the company and explore a sale of the foodservice portion of the business.
“It certainly got my attention and made me think about the future. It made me think about pouring capital into this until there is a turnaround,” Berkowitz said.
Family succession also played a role in the decision to sell, Berkowitz said.
“I have two sons in the business. From a succession planning standpoint, these other channels are something that my sons are very excited about and will give them something for the future,” Berkowitz said.
While buying a full-service seafood restaurant chain in the midst of a pandemic might seem risky, Berkowitz said PPX’s acquisition of Legal’s eateries fit in perfectly with both companies’ future expansion plans.
“Their thinking is, ‘We are going to get through the pandemic and then we really want to expand,’ and they have a little bit of an international footprint,” Berkowitz said. “That is complementary to my thinking. If I entered the new channels of retail, licensing, and e-commerce, then they could be two complementary channels and really enhance the brand.”
PPX said the acquisition is a way for both brands to survive and thrive during the pandemic.
“The recent pressures COVID-19 has placed upon the restaurant industry have been enormous and nearly impossible to tackle alone,” PPX Chief Marketing Officer Kim Giguere-Lapine said in a press release.
“As someone with decades of experience with Smith and Wollensky and several other New England brands, including a brief time at Legal Sea Foods, seeing restaurant operators come together to find solutions that support each other is a cause for celebration,” Giguere-Lapine said. “We are confident we’ll get through these challenging times together.”
While Legal has been selling products such as its popular clam chowder at retailers and online for years, Berkowitz said he is thrilled to “spend much more time developing” sales via those channels. First up is a launch of its clam chowder on TV shopping network QVC in early January.
“For the past couple of years, we have done some work on [Home Shopping Network] with our value-added products, then we were approached by QVC, which owns HSN,” Berkowitz said. “The notion that this could be a very viable part of what we do is very exciting.”
Berkowitz also plans to expand Legal’s selection of both flash-frozen seafood and value-added products available in grocery stores and e-commerce channels.
“We have restaurant-quality fish that we freeze in nitrogen and make it convenient for the home consumer. We are doing some of that now, and we will be expanding that,” Berkowitz said.
In addition, Legal is working on a line of “other products” to sell in grocery stores, according to Berkowitz. It already sells clam chowder in select Ahold, Costco, and BJ’s Wholesale stores. Berkowitz expects to the new line to launch by the end of the first quarter of 2021.
Active Legal employees have been invited to remain as part of the new Legal team, PPX said.
“When fully operational, PPX hopes to employ 3,000 people between all three companies,” the restaurant company said.
Legal Sea Foods’ current chief operating officer Ann Marie Escobar will become brand president of the new entity.
“Having led many great Boston hospitality brands through years of success and prosperity, Ann Marie has had a positive impact on the people behind the Legal Sea Foods brand and will continue spearheading its future growth as the latest addition to the PPX portfolio,” the company said.
Legal will continue its legacy of “sourcing the best seafood available by identifying local partners that source, harvest, and process only the freshest quality seafood for a truly memorable pier-to-plate meal,” said Chef Matt King, chief culinary officer for PPX.
Photo courtesy of Roger Berkowitz