Posted on Thu, Jun. 24, 2004

KC restaurants shutting down

Hundreds losing jobs; pie plant to be sold

By DAN MARGOLIES

The Kansas City Star

Tippin's Restaurants Inc., an area institution known for its made-from-scratch pies and cheesecakes, plans to close its remaining four restaurants today.

The Overland Park restaurant chain sought Chapter 11 protection last year and had hoped to emerge from bankruptcy as a profitable, if slimmed down operation.

But the last 60 days saw a dramatic downturn in revenues, and Tippin's officials decided to close the restaurants' doors.

“The decline in revenues created a severe shortage of working capital,” said Ron Weiss, one the company's bankruptcy attorneys. “The result is that they don't have the ability to continue operating.”

Also closing today is Gambucci's in Olathe, which Tippin's operated as a subsidiary.

The closings will leave the restaurants' 350 to 400 full- and part-time employees out of work. The employees were to be told of the closings this evening.

Most of the approximately 100 employees at the company's 30,000-square-foot pie manufacturing plant in Kansas City, Kan., are expected to keep their jobs. The plant, which makes pies and pie crusts, is slated to be sold to Four B Corp. for $1.48 million.

Four B, which is run by grocer Fred Ball, operates area Hen House and Balls Food Stores. Four B stores have carried Tippin's pies since 1998, when Tippin's launched a branded pie program.

Before falling on hard times, Tippin's operated 15 family restaurants, including six in the Kansas City area. The company trundled into bankruptcy court in January 2003, shortly after posting a net loss of $1.7 million and closing nine unprofitable restaurants in the metropolitan area, St. Louis and Texas.

After the filing, it continued to operate four area Tippins restaurants — in Overland Park, Lenexa, Prairie Village and Independence — a fifth restaurant in Tulsa, Okla., the pie plant and a local food plant that made soups, dressings and other products for the restaurants.

The Tulsa restaurant has since been sold. The food plant is slated to be closed, although Weiss held out the possibility that it will be sold at some point in the future.

Tippin's was founded in 1979 by James Kerwin, Gary Guzzo, David Belin and about two dozen other investors. Originally called Pippin's, after the popular pie apple and a contemporaneous Broadway hit, it changed its name after a West Coast restaurant laid claim to the moniker.

Kerwin and Guzzo, both veterans of the Pillsbury Co., are the company's top two officials. Neither was available for comment early today.

At its peak, there were nearly 20 Tippin's restaurants and Pie Pantry locations in Missouri, Tulsa, Oklahoma City, Wichita and Dallas-Fort Worth.

The operations were profitable until 2002, when, beset by competition and a lukewarm economy, it began losing money.

Weiss attributed the more recent losses to a combination of factors, including a general downturn in the restaurant industry and the pie plant's failure to obtain some hoped-for contracts.

“And I think the low-carb craze is a factor,” he said. “It's one thing for Hardee's to get rid of the bun and call its hamburgers low-carb, but when you're selling pies and cheesecake, you can't do that.”

To reach Dan Margolies, call (816) 234-4481 or send e-mail to dmargolies@kcstar.com.