Staking its claim in Asia

Christopher Artinian, president and chief executive officer of Morton's, says the company plans to open more locations in China. [Gao Erqiang / China Daily]

High-end restaurant Morton's is on fire in the East as it looks to open more locations

Starting from chopping onions and making salads in the kitchen 16 years ago, Christopher Artinian knows the Morton's restaurant chain like the back of his hand.

Now, Artinian, 41, who is the president and chief executive officer of Morton's Restaurant Group Inc, is leading the company in an attempt to escape the economic downturn and go for further expansion in Asia.

The high-end steakhouse and fine dining restaurant chain opened its first steakhouse in 1978 in downtown Chicago, where Morton's corporate office is still located. Since then the company has grown to 77 steakhouses and one Italian restaurant, Trevi. Morton's has 71 US steakhouses and six in international locations: Hong Kong, Macao, Mexico City, Shanghai, Singapore and Toronto.

The restaurant industry, especially fine dining, largely relies on general economic conditions. Morton's, where the average per person bill is more than $99 (75 euros), is one of the high-end restaurants that have been affected by the global economic recession.

"There is no secret that the US economy has been difficult," Artinian says. "It was incredibly difficult in our business in 2008 and 2009. But things started to really pick up again in 2010. Morton's has reported seven quarters of positive comparable sales, which is very exciting."

The company suffered a loss of $77.5 million net of tax from continuing operations in 2009 and $61.8 million in 2008, and its revenue fell 19.5 percent year-on-year in 2009 and 4.9 percent in 2008.

There was a recovery in the 2010 fiscal year, with a net income from continuing operations, net of tax of $4.6 million.

"What was really great for Morton's is that luxury hotel, luxury retail and business entertaining have been on the rise for the last seven or eight quarters and continue to forecast positive," Artinian says.

He has recently completed a business tour of Asian cities including Seoul, Tokyo, Taipei, Beijing and Shanghai to look for possible locations for new restaurants. Sitting in Morton's The Steakhouse in Shanghai, which just celebrated its one year of business, Artinian says that he is leading the group in an aggressive expansion in Asia.

"Our plan is to open two locations in Asia a year for the foreseeable future. We have nothing to announce definitively, but we are incredibly close on several locations.

"We are already actively looking at two other locations in Shanghai and at least two locations in Beijing. I would not be surprised if we have at least one, if not two, open in 2012," he says, adding that the company is also looking for a second location in Hong Kong.

While Morton's major contribution is from the US market, where the company originated, Artinian believes the company's operations in China can easily come a very close second.

"China is our No 1 area for growth," he says.

The company has moved its regional director of operations from Honolulu to Hong Kong, and the vice-president of construction and development is now based in Shanghai.

"We are excited about the growth. We want to make decisions faster," Artinian says.

In November 2010, when Morton's opened in Shanghai IFC Mall in the Lujiazui area, a commercial center of the city, and Artinian says it may be the most important location among all of its restaurants.

"Hong Kong and Singapore were well-traveled international cities. They have more Western influence than Shanghai does today. We were a little unsure if we would really grow on the Chinese mainland. And we knew that if we could be successful here it would open up the doors for other cities such as Beijing, Guangzhou, so on and so forth," Artinian says.

They are off to a terrific start. The restaurant's performance in the first year is beyond expectations, he says.

"Our four restaurants in Asia are all in the top core tile of all of Morton's. They are some of our fiscal year's most profitable restaurants."

The company's six overseas restaurants posted more than $3.91 million in income before tax in the first three quarters of the 2011 fiscal year, while its domestic restaurants posted a $2.86 million loss.

Corporate customers have been a major source of income for Morton's fine-dining business, but there is concern that companies will cut that kind of expense to reduce costs.

"It is always a concern, but we have learned over the last 33 years that when people are going to spend money to entertain, they want to get the most value for that money.

"When they are going to take that client out, they don't have to worry about the food, the quality and the service that's going to be there. We've always been that place even when the economy in the US was as tough as it was."

Morton's is well-known for its consistency. The restaurants are not only similar in style, concept and decor but share almost the same menu.

The Morton's steakhouses offer premium quality steak, featuring prime aged beef in the US, fresh fish, lobster and chicken, complemented by premium drinks.

Because of import restrictions, Morton's steakhouses in Asia use comparable high-quality aged beef where US beef is not permitted. China is the only place where 100 percent Australian beef is used, which, Artinian says, is the best available that money can buy.

In addition to the quality of food, Artinian believes that training is a crucial factor that keeps the brand strong.

The company has a training team specially developed in Asia with the help of instructors in the US to make sure everyone understands Morton's culture.

"We train everyone step by step, whether you are dishwashing staff, a waiter or a general manager. Everyone clearly understands the history of Morton's, how to select the best products and even how to anticipate the guest's needs in the same way."

Morton's is even alert to the particular wishes of Chinese customers and made some changes.

In most of Morton's restaurants, there are only two or three private dining rooms. However, there are 11 in Shanghai "because when we were doing our research, we realized that a lot of Chinese businessmen do business over a meal and like to meet in a room that is very comfortable. It honors their guest."

He says that over the past several months the number of local Chinese customers in the Shanghai restaurant has grown. Usually about 60 percent, sometimes 70 percent, of customers are Chinese.

For Artinian, Morton's culture is about running a family business.

He began his career in the pantry kitchen at Morton's New York, and was quickly promoted to assistant manager and then general manager. In 2004, he was promoted to vice-president of East Coast Operations and was appointed CEO in 2010.

But he says that in this big company, which employees more than 4,000 people, he is just one example of so many who have been with the company for a long time.

"What Morton's has taught me is if you treat people well inside your company, they are going to treat people well that are coming to choose Morton's. I believe very deeply in the brand because we've always kept the integrity of the brand together."

He says that if there was a terrible economy, the company would never say: "Maybe our beef is too expensive. Let's try something else" or "We don't need that many staff to serve people. Let's do with fewer."

He adds: "I always appreciate that commitment to excellence. It really helps to drive me to continue to be successful as the company has grown. Our biggest fear that drives us is that we don't ever want to become second best."