Lawry's California Center, a Los Angeles attraction for the past 30 years, will close on Jan. 3, yet another Southland culinary landmark to fall during the recent recession.
Its cost-conscious owner, Thomas J. Lipton Co. of Englewood Cliffs, N.J., said Monday that the closure of the 17-acre site northeast of Dodger Stadium is part of a companywide consolidation.
The center was started as a showcase of restaurants and shops to promote Lawry's seasoning and sauce products, and was unprofitable throughout its history, Lawry's and Lipton executives said. Lawry's Prime Rib Restaurants are under separate ownership and are not affected by the decision.
While the closing of the complex is not directly related to the recession, Lawry's California Center will be the latest in a series of well-known Southland restaurants to shut its doors--a sign of the rough times in the food service business, said Saul Leonard, president of Saul F. Leonard Co., a Los Angeles-based consultant to the hospitality and gaming industries.
"Companies can't afford the luxury of a showcase these days, because business is too tough," Leonard said. "The recession is a prime culprit . . . but eating habits are changing."
Leonard said the public is more interested in casual, less-pricey fare, and he predicted that some other well-known Southland restaurants would fail as the recession eats into profits.
"Many upscale restaurants in good locations--the Westside--are having difficulty," he said.
Among the best-known restaurants failing recently are Lubach's in San Diego, which closed in November after 35 years in business, and Los Angeles' L'Ermitage, a 16-year favorite of the movie industry crowd, which closed and was put up for sale over the summer.
The restaurant industry is suffering because those who eat out often consider dining a discretionary expenditure, said Stan Kyker, executive vice president of the California Restaurant Assn.
"The restaurant industry is soft," Kyker said. "Those doing well tend to be lower-priced operations. The less-expensive restaurants tend to be doing better than higher-priced luxury dinner houses. The problem is unemployment and threat of layoffs. Locally, there are problems. Look at aerospace and (banking). People want to be more cautious and conservative with their discretionary spending."
Lipton is a subsidiary of the Dutch- and British-owned Unilever, a consumer products conglomerate. Lipton purchased the Lawry's property in 1979 from its founders, the Frank and Van de Kamp families. The company decided to close the center after concluding that the complex could not make a profit.
The Lawry's center, completed in 1953 and expanded in 1961, opened its first outdoor dining area--La Cocina--in 1970. La Cocina is now a self-serve restaurant. In the mid-1970s, it opened a restaurant for evening dining--one known for its steak. A third restaurant, Los Portales, offers Mexican fare. The center's 150 employees will be offered severance packages, a Lawry's official said.
Lawry's ended its production of sauces and seasonings at the Los Angeles site earlier this year and put the facility on the market in April. A buyer has yet to be found. Lawry's corporate headquarters--including marketing, technical offices, regional sales operations and its distribution and customer service offices--will remain at the center until the site is sold.
Lipton has moved its seasoning and sauce production operations from the center to its facilities in Santa Cruz, Calif., and to plants in Missouri and Maryland as part of a cost-saving consolidation. It is closing the restaurant and shops for the same reason, said David St. Clair, senior vice president at Lipton.
"Across the board, we've been restructuring . . . because we want to become more efficient," St. Clair said. "The recession has caused many companies to be concerned about costs. Sit-down restaurants have been feeling the affects of the recession."
Executives at Lipton and Lawry's said restaurant revenues at the center were not dramatically lower than pre-recession levels. The company would not provide sales figures.
However, Lipton's decision comes as Unilever attempts to boost earnings in North America. Among the company's indirect subsidiaries are Lipton, Lever Bros., Ragu, Elizabeth Arden cosmetics and Calvin Klein cosmetics.
In North America, operating profits declined 21% to $122 million in the firm's recently concluded second quarter. However, that drop was much less severe than the 82% earnings decrease recorded by Unilever's North American operations in the first quarter.
Faced with such declines, Lipton decided it could no longer carry losses at the center, analysts say.
Restaurant Retreat L'Ermitage after its closing earlier this year.
Three landmark restaurants closed or announced plans to close in Southern California over the last year, generally victims of the recession or the targets of cost-cutting by parent companies.
Lawry's California Center will close on Jan. 3. The reason for the closure is cost-cutting by owner Thomas J. Lipton Co.
L'Ermitage, a fixture with the entertainment set for 16 years, closed over the summer because of "management fatigue," its owner said when the property was put up for sale.
Lubach's in San Diego was closed down on Nov. 29, 1990, because of declining revenue.