Nov. 3 (Bloomberg) -- Allen J. Bernstein, who showed that high-end restaurants can succeed as chains by expanding Morton’s of Chicago from nine steakhouses in 1989 to 69 worldwide in 2006, has died. He was 65.
He died on Nov. 1 at North Shore University Hospital in Manhasset, New York, after an extended illness, according to Castle Harlan Inc., a New York-based private-equity firm that backed his ventures. He was a resident of Manhasset.
Once described by Nation’s Restaurant News as “a prolific deal-maker,” Bernstein wrote his college thesis on restaurant branding and then made a career of it.
Bernstein, as chairman and chief executive officer, positioned Morton’s on the leading edge of a wave of upscale, expense-account steakhouses that opened new outlets around the U.S., including competitors Ruth’s Chris Steak House and Smith & Wollensky.
“We created this segment,” Bernstein told the Orange County Register in 2005, when Morton’s was expanding into lunch service and happy hours. “Flattery is very nice -- all these other people have come after us. We said, let’s see what they are doing and see if we can adapt some things.”
John Castle, chairman and CEO of Castle Harlan, said yesterday in an interview that Morton’s quieted doubts about the viability of the “high-end chain.”
“If you go to a Morton’s restaurant anywhere in the world, the menu is essentially the same, the staffing is the same, the restaurants look basically the same,” he said. “The benefit of that is that you know what you’re getting.”
In partnership with Castle Harlan, Bernstein created Quantum Restaurant Group Inc. in 1988 and made Atlanta-based Peasant Restaurants Inc. its first purchase.
In May 1989, Quantum bought Morton’s of Chicago for an undisclosed price from Lexington Capital Co. of Morristown, New Jersey, and Alex. Brown & Sons Inc., now a unit of Deutsche Bank AG. At the time, there were two Morton’s steakhouses in the Chicago area and one each in Washington, Philadelphia, Boston, Denver, Dallas, New Orleans and Atlanta. In a news release, Bernstein hailed Morton’s as “one of America’s finest restaurant establishments.”
To focus on the brand, Quantum in 1996 became Morton’s Restaurant Group Inc. By the time Bernstein stepped down to become chairman emeritus at the end of 2005, Morton’s ran 65 steakhouses in the U.S. as well as one each in Hong Kong, Singapore, Toronto and Vancouver.
The Chicago Tribune reported that Bernstein received a retirement package that included a payment of $7 million in addition to a 2005 salary and bonus package of $1.2 million.
Morton’s was publicly traded from 1992 to 2002, when Castle Harlan spent $71 million to outbid Carl Icahn for ownership. It went public again in 2006, raising $161 million in a stock offering. Castle Harlan owned 30 percent of the company as of March 25, according to data compiled by Bloomberg.
Allen Jay Bernstein was born on Nov. 22, 1945, in Brooklyn, New York. He graduated in 1968 from the University of Miami with a degree in marketing. He began buying franchises in restaurant chains such as Hardee’s, Long John Silver’s, Wendy’s, Godfather’s Pizza and Le Peep, according to Castle Harlan.
A 1988 story in Inc. magazine, noting Bernstein’s passion for chain restaurants, described him as “full of smiles and enthusiasm, with a waistline that testifies to frequent product sampling.”
At a memorial service in Manhattan yesterday, Castle said, friends and family members recalled the unique experience of eating at a restaurant with Bernstein.
By meal’s end, “you would have tasted every item on the menu,” Castle said. “After a while I learned how to be artful doing this with Allen, ordering 25 different things without the waitress thinking you’d gone crazy.”
Survivors include his wife, Lori Waltzer Bernstein, and two children.
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