Nation's Restaurant News - October 6, 1997
Intense and driven, Landry's chief plays to win
...continued from Published News
"He has a hard-nosed, demanding, hands-on management style," says Barry Stouffer, an analyst at J.C. Bradford & Co. in Nashville, TN.
Richard Ervin, Landry's vice president of restaurant operations who worked with Fertitta even before joining Landry's in 1988, adds, "He doesn't know the meaning of the words "I can't." "If you were going to play football, who would you want to play for -- John Smith or Vince Lombardi?" Ervin asks, posing a moot question. "You want to play for Lombardi if you want to rank." "Success doesn't just happen," Ervin adds. "There's a price to pay and a commitment."
With the company's public stock reaching all-time highs and expansion of its Landry's and Joe's Crab Shack concepts proceeding apace, Fertitta's commitment to strong leadership is unwavering. "I feel like I'm a good leader and have credibility with people," the Landry's Chairman, President and Chief Executive says. "If I tell people something will happen, it will happen. That means a lot to people." The hospitality industry wasn't foreign to Fertitta, a Houston real-estate developer, when he took control of Landry's in 1986.
"He has been involved in the hospitality industry most of his life," Stouffer says, "beginning with working in his father's seafood restaurant when he was 12."
Fertitta's restaurant acumen is anchored to his dad's seafood restaurant in Galveston, Texas. "That's where I really learned the basics of the business," Fertitta says. "As a businessman and real-estate developer, I had big plans. But I was able to use the fundamentals I learned as a kid. How to fry, how to broil, how to check in crab meat, how to check in shrimp, how to check in flounder. Just the basics. How to do a floor plan. All the fundamentals."
In the mid-1980s he had a chance to invest in one Willie G's seafood restaurant and one shopping center Landry's.
"I knew these guys -- they were friends -- and knew they had a good product," Fertitta recalls. "They needed some money because it wasn't real successful. They were all arguing and needed money. I loaned them some money and eventually bought them all out."
He took control of the company in 1986 and bought out the last partner in 1988. "We had three units at the time, and my goal was to build a company and take it public," he says. "It just happened to work out because of good atmosphere and good food. l went to other cities around the state to make sure my product would sell. l went to Corpus Christi, Dallas, Austin, San Antonio."
He raised $60 million in a 1983 public stock offering and now has 42 Landry's, 22 Crab Houses, 39 Joe's Crab Shacks and three Willie G's. Landry's stores cover 28 states.
The growth vehicle is Joe's, which was just one unit in Houston when Landry's bought it in May 1994. "People love Joe's," Fertitta says. "Wherever they go up, they do extremely well. It caters to everybody, blue-collar and white-collar. It's seafood in a fun atmosphere."
With growth comes challenges, Fertitta says. "We have to make sure we take care of the food quality, the service quality and continue to find the right 'A locations' he says. "You can't take your eye off the ball."
If sports metaphors permeate the Landry's culture, it's no surprise. Fertitta, the company's largest shareholder, once owned a slice of the NBA Championship Houston Rockets basketball team and still serves on its board. "I have two championship rings," Fertitta says. "That was a highlight of my life."
But running the restaurant company allows little time for his hobbies, which include skiing and flying -- both of which reflect Fertitta's intensity. "I don't get to do them much," he says, a bit ruefully. "Skiing is an intense sport. It's challenging, going down black diamond slopes. Flying is intense. I have to do something that's intense. I don't sit around." In fact, he credits his intensity with the success of Landry's.
"The company is successful because the Vice Presidents and I work extremely hard," Fertitta says. "We've made a commitment to do whatever it takes. You can call up here at 8 or 9 at night and usually find one of us here. "What other business takes so many employees, so many customers, so many purveyors?" Fertitta muses. "It's phenomenal. And every sale is an average of $15. I don't think we could be doing anything more difficult."
Fertitta also believes in hiring and keeping a talented senior management team. "I don't like turnover," he says. "You need continuity. You need to be loyal to them, and they'll be loyal to you. I preach change, change, change," he says. "I'm always changing things because we're always making mistakes. I make mistakes every day. Just make sure they're not so big that you can't make the adjustment to the mistake."
Ervin, the vice president of restaurant operations, agrees. "The team has to take ownership," he says. "Tilman is real good at helping people reach their potential. Some people play the game just to play, others play it to win. That's important. You have to have goals. Very few people achieve that level of success, because it takes that level of intensity, focus and leadership. Everything in our world is leadership, culture and execution, and all that starts at the top."
Fertitta is proud of Landry's accomplishments. "From a public standpoint, we've been very successful," he says. "We've hit our numbers every quarter. And the only other company doing seafood really is Red Lobster." "It's been extremely fulfilling," he reflects. "We know the sky is still the limit, but we've done a lot."