Bear of the Day: Madison Square Garden Company (MSGS)

It’s one of the most famous sports and entertainment venues in the world. Known colloquially as simply “The Garden” and situated right in the middle of Manhattan, Madison Square Garden is the oldest stadium in both the NBA and the NHL and has also hosted countless music, arts and comedy events over the past 52 years. For athletes and performers, “playing at the Garden” is synonymous with having reached the top of their field. It’s truly iconic.

The Madison Square Garden Company (MSGS) doesn’t own the building – the property itself belongs to a related company.*

MSGS owns the NBA’s New York Knicks and the NHL’s New York Rangers – two teams who play in the building and have enjoyed a huge local market and loyal fans around the country who buy up licensed merchandise and watch televised broadcasts. They also own several minor league franchises in both sports, training centers and even an esports team.

*(For clarification: Madison Square Garden Entertainment (MSGE) owns not only that notable, hulking physical facility that looms over two city blocks between 7th and 8th avenue in the low 30s; it also owns Radio City Music Hall and the Beacon Theater in Manhattan, the Chicago Theater, The Forum in Inglewood, CA and Boston’s Wang Theater. All those venues are currently closed. MSGE is currently a Zacks Rank #4 [Sell].)

Live sporting events are a very tough business to be in right now. The NHL cancelled the remainder of the regular season at the beginning of the outbreak in the US in March and pulled together a modified playoff format so that they could still award the Stanley Cup – which was eventually won by the Tampa Bay Lightning. Most teams had played roughly 70 out of a planned 82-game regular season schedule.

It was a similar story in the NBA with the regular season cancelled and an elimination tournament held in an isolation “bubble” in Florida in which all players, coaches, staff and referees have been avoiding all contact with the outside world throughout the proceedings. (The Los Angeles Lakers will look to take the championship trophy home tonight when they take the court up 3 games to 1 against the Miami Heat.)

While sports franchises were able to salvage at least some broadcast revenue from the truncated seasons, it’s a far cry from what they’re accustomed to pulling in from a diverse set of revenue sources during a normal season.

The real concern is next season: 2020-2021.

It’s anyone’s guess when we’ll be gathering once again in public spaces. Under normal circumstances, the new seasons for professional basketball and hockey should be underway soon, but obviously that’s not going to happen. Even if the leagues are able to cobble together something, there will be a massive revenue hit for individual teams.

For MSGS – which has never made all that much in net profits – that’s a disaster. Over the past 60 days, the Zacks Consensus Earnings Estimate has fallen from a net

Read more

Kitchen United CEO Jim Collins exits ghost kitchen company

Kitchen United, a pioneer in the emerging ghost kitchen space, announced Wednesday the departure of CEO Jim Collins, who played an instrumental role in developing the company’s string of rent-a-kitchen facilities in major U.S. markets.

He left to focus on personal endeavors, the Pasadena, Calif.-based company said. Michael Montagano, the company’s former chief financial officer and treasurer, has been named CEO. Chief Marketing Officer Joy Lai has taken over the role of chief operating officer. 

She and Montagano will work together to shepherd the company through its next round of growth, where demand is at an all-time high for its ghost kitchen facilities. Since the beginning of the year, volume at its centers, on a monthly basis, has increased 400% to 500%, Montagano told Nation’s Restaurant News in a phone interview this morning.

team-joy-lai.jpgJoy Lai

With heightened demand among the industry for ghost kitchen spaces, Kitchen United has a wait list of restaurants looking for space at one of its facillities. The company has been growing at its own pace since the first Kitchen United opened in Pasadena in 2018. The pandemic only escalated demand for its services from both consumers and operators, said Montagano, who has been CEO for two weeks.

“We think there’s a lot of habit forming behavior over the last six months and that will continue in the future,” he said.

Beyond Pasadena, Kitchen United has locations in Chicago, Scottsdale, Ariz., and Austin, Texas.  

In 2021, Montagano said the company is looking to enter New York City, expand locations in Texas and Northern California, specifically the Bay Area. 

The ghost kitchen space has been growing for a couple of years. But the sector has exploded with new concepts during the pandemic as restaurants turn to ghost, host and dark kitchens to serve delivery customers.

Montagano said Kitchen United welcomes the competition.

“We think there’s room for a lot of different [models] in the market. But we’re very confident in our business model,” he said.

The company’s kitchen facilities are designed to help established restaurant brands build off-premise business through delivery or catering. Many virtual restaurants also prepare food out of Kitchen United commissaries, including Canter’s Deli and Dog Haus.

The company’s 51 kitchens inside four centers host 40 brands ranging from independents to regional and national chains. Chick-fil-A, for example, is set up in Kitchen United’s Chicago facility. The chicken chain uses the facility to support a high volume of orders in the Chicago area. The quick-service c hain is exploring more opportunities with Kitchen United when it expands next year. 

Jollibee and Portillo’s also run delivery only operations out of the Chicago facility. 

Dog Haus, a regional chain from Southern California, is set up at three Kitchen United centers.

Besides working with well-known chains, Kitchen United also seeks out indepdentent restaurants with popular menus geared

Read more

This 95-year-old Peninsula company found a sweet spot during the pandemic: Your kitchen

By Alicia Wallace | CNN Business

When the Covid-19 pandemic hit the US, some businesses held fast and hunkered down. Torani, the 95-year-old company that makes those colorful bottles of flavored syrup at your local coffee shop, didn’t have that luxury.

Torani needed to follow through on a plan that had been years in the making: a relocation of its headquarters and manufacturing operations from South San Francisco to a brand new building across the Bay. The Covid-19 pandemic, however, turned what was already an ambitious and expensive undertaking into a dramatic exercise in operational gymnastics.

Torani was slated to start its move in March to a spacious, 327,000-square-foot San Leandro building that would house its offices and state-of-the-art production lines. It also would serve as a Willy Wonka-esque, tourist-friendly “Flavor Factory” with a coffee-making “receptionista,” a “customer play area” to try some of the 150-plus flavors, and a speakeasy that could be accessed via a secret passageway behind a bookshelf.

But then the shelter-in-place orders came down, and restaurants and cafes were ordered to temporarily close their doors. Torani entered into pandemic planning mode and conducted a financial analysis to determine if it could weather sales drops of 20%, 30% or even 50%.

The company had borrowed around $40 million in loans to invest in its Flavor Factory.

“Could we make it? Could we hold onto everybody?” Torani CEO Melanie Dulbecco told CNN Business. “Could we pay off these loans we just borrowed? Could we keep the business running for our customers and make it?”

The privately held company, which got its start in San Francisco’s “Little Italy” neighborhood of North Beach, has been accustomed to double-digit annual revenue growth for decades. It now was projecting a 40% sales drop for the month of April and bracing for the worst.

Coffee shop sales tanked during that time. According to survey of more than 5,000 shops by payment processor Square, median revenue tumbled 55.4% between March 1 and April 30.

When April was said and done, Torani did have a sales decline on its books, but only 20%.

“And then business came back like crazy,” Dulbecco said.

What happened was that sales of Torani’s syrups started spiking at the retail store level. Americans working remotely during the pandemic had brought their coffee shop habits home with them.

And as the homebound turned to homemaking, Torani syrups and sauces were landing in concoctions such as mixed drinks, kombucha batches, and even sourdough starters, Dulbecco said.

The pickup in store sales also meant that Torani had to increase supplies of its 375-milliliter flip-cap bottles often found at retail. Coffee shops typically buy the bottles that are twice that size.

“We had to shift a lot around in our supply chain to have all the packaging materials,” Dulbecco said.

Torani, which makes syrups used in coffees and Italian sodas, completed a move of its headquarters and manufacturing facility during the pandemic.(Torani) 

Happening in the background of this was the move from

Read more

She thought they were renovating the kitchen, he worked with a Seattle company on a bigger surprise

30 years into their marriage and nearly 20 years in the same house, Alvin and Joanne were ready for a refresh — not the marriage, Alvin emphasizes.

“It doesn’t feel like it’s been that long! We still feel like newlyweds who got married yesterday,” he says.

But the house was starting to feel a little dated, and the couple heard from a friend that Granite Transformations did really great work. As a former interior designer Joanne took the lead on most decisions, and then Alvin came up with a plan to celebrate their love at the same time.

“I said honey, I don’t think we can afford to do all this, and convinced her to postpone the fireplace and bathroom renovations. But of course in my head I thought ‘I’m going to make sure we get this done.”

Alvin worked with Granite Transformations to orchestrate a surprise, and they completed the bathroom and fireplace renovations while Joanne was away working as a flight attendant.

“The crew from Granite Transformations were great about working on the surprise. They’d bring paperwork to the school where I volunteer, separated invoices to keep things secret — things like that.”

Gorgeous transformation

Alvin emphasizes that his wife was the decision-maker for all the gorgeous design details, and he just said, ‘yes dear.’ But if he didn’t know her preferences, how did he pull together the surprise?

“The fireplace matches the marbled countertops in the kitchen, so that was a no-brainer,” Alvin says, and Joanne had already started to pick things out for the bathroom before they put the project on hold. “I said why don’t you put all your top picks in the folder for later on? And then I took all that to Granite Transformations.”

FURTHER READING: Your easy-clean kitchen never looked so good!

Joanne, of course, loved the surprise. And Alvin says when visitors come over says they’re always stunned by the transformation. The backsplash Joanne picked out is always a favorite, and the whole space looks totally updated.

“The countertops are great — they’re indestructible! I don’t have to worry about hot pans or water damage — nothing scratches, nothing burns,” Alvin says. “And the crew that did the installation was excellent. I’m a little cautious about having people in my home — I’m a retired police officer so I’m fairly protective — but these were total trustworthy guys.”

Ready to boost the beauty in your home? Request a free in-home design consultation to start sketching your own spectacular surprise, or use the online visualizer at granitetransformations.com. Call 425-998-0107 or email [email protected] to get started today!