Cathie Anderson

Insights into the people who shape Sacramento’s business landscape

Cathie Anderson: Real Mex closes Chevys restaurant on Howe Avenue in Sacramento

07/18/2014 3:40 PM

07/18/2014 3:42 PM

Renée Pierce, Joseph Ryan and other readers of The Sacramento Bee were surprised to find the lights out at Chevys Fresh Mex, 1234 Howe Ave. in Sacramento. The restaurant, open since 1989, closed June 24.

“I had just been in the restaurant,” Pierce told me, “and then a couple of days later, the doors were closed and signs were off the building.”

Jared Dougherty, senior vice president of marketing for Chevys parent company, Real Mex Restaurants, told me: “The lease term ended, and we made the difficult decision to close the location....The managers have been relocated to other Chevys locations in the area and all other employees at the Howe Ave. location were given the opportunity to transfer.”

Dougherty did not explain why the lease wasn’t renewed, but he did say no other Chevys closures are planned in Sacramento at this time. Real Mex Restaurants emerged from Chapter 11 bankruptcy protection about two years ago with new private equity owners, Z Capital Partners and Tennenbaum Capital Partners. During the bankruptcy, Real Mex reported that their annual revenue had dropped to $478 million in 2010 from $553 million in 2008.

The new owners are working to turn the tide. In May, Real Mex CEO Charly Robinson told Orange County Register reporter Nancy Luna that he had plans to reboot the brand image for both the Chevys and El Torito. This marked the company’s second attempt in two years to rework recipes, change up menu items and improve drinks.

What’s going on here? Paul McClure, the principal director of advertising at Sacramento’s Runyon Saltzman & Einhorn, has led many rebranding campaigns, and he says comebacks are tough to engineer in this restaurant segment.

“They’ve probably had a long path of lower customer counts and transactions,” McClure said. “There’s a life span to a concept like that, more in the casual dining and fast-casual area than anything else, and if they’re not nurtured or re-energized along the way, they fall so far behind the curve that you can’t save it.”

 

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