El Torito Broadens Its Horizons : Specialty Restaurants to Cater to Yuppie Clientele

It isn’t about to serve burritos on white bread, but El Torito is starting to seriously think American.

Over the next six months, the Irvine-based Mexican dinner house chain will open three specialty Orange County establishments with distinctly upscale, American flavor. It is El Torito’s bid to snatch with champagne and gourmet burgers the coveted customer that its Mexican restaurants already lure with Margaritas and nachos: The Yuppie.

These new ventures by El Torito Restaurants Inc. include: an exclusive nightclub that will serve more than 100 varieties of champagne, a $2-million art deco eatery with a flexible menu that will happily serve customers vintage wine with specialty burgers and a continental restaurant decked with costly chandeliers and a spiral staircase.

You won’t find so much as a taco or enchilada in any of these soon-to-open El Torito-owned establishments. “We want to appeal to the very top of today’s trend setters,” said Karl D. Martinez, El Torito’s vice president of marketing.

“They’re going after the Yuppies,” said Edward M. Tavlin, Miami-based analyst at Prescott, Ball & Turben. “Whatever it takes to get them--whether its Mexican food or broasted chicken--it doesn’t matter.”

Richard E. Pyle, analyst at Minneapolis-based Piper, Jaffray & Hopwood Inc., agreed: “Everyone’s trying to take Yuppies a step further.”

The lures aimed at young urban professions wielding plenty of cash and credit cards will open new doors for chain. El Torito is gearing up for high-ticket revenues that its successful but moderate-priced Mexican dinner restaurants can’t provide.

The move also provides a security blanket for El Torito, which was a wholly owned subsidiary of New York-based conglomerate W. R. Grace & Co. until last January when 27% of El Torito’s stock was offered to the public. The new emphasis better positions the restaurant chain for possible market changes. While the Mexican segment is still regarded as a fast-growing niche in the restaurant industry, experts say that growth is just beginning to slow.

“With the upcoming shakeout in the Mexican food business, there will be few survivors, but El Torito will be one of them,” Pyle said.

Still, El Torito is not removing its sombrero. In fact, over the next six months the 30-year-old chain will spend upwards of $6 million converting 24 Casa Maria restaurants it recently purchased from Marriott Corp.--for an estimated $40 million--into full-fledged El Toritos. The vast majority of the 145 restaurants it has in 26 states are in fact El Torito by name.

Sales Increases Indeed, the company, which employs 11,000, enjoyed hearty earnings and sales increases for the first nine months of 1984. Net income of $9 million was up 45% compared to the same nine-month period in 1983. And sales of $189 million were up 20% compared to the same 1983 period.

Close to the pulse beat of not only what young professionals are eating--but also drinking--El Torito sold more than 7 million Margaritas last year.

Eager to cash in on the affluence of Orange County and anxious to repeat the successes of the handful of specialty restaurants it already operates--such as the popular Chanteclair in Irvine--El Torito is putting on an American face.

“The new facilities will allow us to experiment with new food items, and if they’re popular, we can retrofit some of the dishes into our Mexican restaurants” to fit the Mexican menus, said Frederick A. Le Franc, executive vice president of operations.

Martin M. Casey, an El Torito executive vice president, added, “We feel there’s growth in this area, and we can’t pass up the opportunity.” He said that Orange County was selected as the site for these experimental operations because, in part, that is where El Torito is headquartered, “and we can supervise them on a day-to-day basis.”

Still, El Torito’s expansion outside of Mexican food concerns analyst Tavlin. “If they feel so good about their basic operations, why should they fool around with something else?” he said.

But, Martinez said: “It gives us another option. The success of these (specialty restaurants) will determine if we do more.”

Less than three weeks from now, the first of these new operations, Players, will open next to the Irvine Marriott Hotel. The 1940s’ style restaurant will feature a flexible menu that will constantly change, said Tom Cosgrove, regional operator of Players. “Our menu will not be an afterthought. It will respond to the life style of the Players’ customer, “ Cosgrove said. That customer is expected to be the upscale professional with a craving for high-ticket items.”

Even more high-ticket will be the next specialty restaurant El Torito plans to open in April. Also located in Irvine, Remick’s will be an upscale, continental restaurant with food and prices expected to rival the county’s creme de la creme .

But Yuppies want more than good food. They also want good drink. So El Torito is in the process of completely remodeling the upstairs lounge of its Copa de Oro restaurant in Costa Mesa which will adopt the name “Club Copa” and serve vintage champagne by the bottle or glass. When it opens next month, it will be similar to Nippers, the popular Beverly Hills nightspot

Bemused by El Torito’s plans for Yuppie catering, Pyle, the analyst from Piper, Jaffray said, “It sounds like a good use of the space until they figure out something else to do with it.”