Restaurateur Plans Comeback Effort

Walker Plans New Fayetteville Eatery After Enduring Kirby’s Bankruptcy

For more than a decade, Kirby Walker couldn’t fail. In 1983, he opened the popular Hoffbrau Steaks in Fayetteville. By 1994, he ran Fayetteville’s No. 1 restaurant, Kirby’s Grill & Bakery, which reaped $2.3 million in sales that year.

But by February 1998, the restaurant was closed and Kirby’s Inc. was being dragged into U.S. Bankruptcy Court.

Walker says the intense restaurant competition in Fayetteville caused the downfall of Kirby’s Inc., which also had restaurants in Little Rock and Rogers. But it’s not stopping him from launching a new restaurant venture in Fayetteville called Noodles Italian Kitchen.

“Kirby’s slipped for about 60 days, and that happened very quickly — in the blink of an eye,” Walker says. “That’s a problem with being a little bigger: You can dig the hole pretty quick. We got saturated quickly.”

Between 1995 and 1997, new restaurants opened in Northwest Arkansas providing some 2,500 new seats for area diners, Walker says. Over a two-week period in March 1997, sales at Kirby’s Fayetteville restaurant dropped 30 percent and never recovered.

Now Walker, who has remained reclusive since closing Kirby’s, is one of those opening a new restaurant. As a minority owner of Noodles Italian Kitchen, a limited partnership, he has leased 7,500-SF of space in the back of the Fayetteville building at 3155 N. College Ave. that houses Gold’s Gym.

After remodeling the space, Walker plans to open Noodles Italian Kitchen by late October. The casual Italian restaurant will seat 185, serving pizza, pasta, salads and “market favorites.”

“We’d like for it to be more affordable than Kirby’s was — less expensive, quicker, but still with the big-city feel,” Walker says.

Since the failure of Kirby’s Inc., Walker is quick to note that he owned only 15 percent of that 30-shareholder corporation and is a “minority” owner of Noodles. As president of his namesake corporation, however, to most people in Northwest Arkansas, Kirby Walker was the man in front of Kirby’s Grill & Bakery. And Walker is listed with the Arkansas Secretary of State’s office as the registered agent for Noodles. He says he has two investors in the new endeavor but declines to identify them.

Beginnings

Walker, 39, grew up in east Texas. After receiving a bachelor’s degree in general business in 1981 from the University of Texas at Austin, he and other investors opened Juan T’s, a Mexican restaurant in Mount Pleasant, Texas. He sold that restaurant and opened Hoffbrau Steaks in Longview, Texas.

Looking to expand, Walker visited Fayetteville and decided it would be a great place to live and operate a restaurant. He moved here on Jan. 2, 1983, and, on April Fools’ Day, opened Hoffbrau Steaks in a renovated building at 31 E. Center St. Walker ran Hoffbrau until 1989, when he sold the business to Gary Thompson. Walker stayed on there as manager until September 1990.

Walker opened the first Kirby’s in 1991 as a casual, upscale restaurant in Fayetteville serving fresh food and specializing in a wide array of desserts.

At a time when Fayetteville had primarily a dichotomy of hamburger joints and expensive restaurants, Kirby’s filled a mid-level niche he describes as “upscale service without upscale pricing.”

“Kirby’s brought kind of a big-city feel to the market,” says Walker. “It was the first to do that. That was a driving force of its success.”

Advertised as a non-drinking, non-smoking restaurant, Kirby’s was popular with the church crowd and was often crowded after services on Wednesday nights and Sundays.

In 1990, Walker was wrestling with some serious decisions. He was trying to define his relationship with God, and, at the time, it seemed that alcohol played no role in that relationship, although he previously had served alcohol at Hoffbrau.

“The decision with Kirby’s not to serve alcohol was not a marketing strategy,” says Kirby. “It was a personal decision on my part. It was at a time in my life where certain things needed to be temporarily removed just to make sure Christ was the center of my life. He is, some days more than others. In order to have it out of my life, I had to have it out of my business.”

Walker says his relationship with Jesus Christ is now more solid than it was in 1991 when he opened Kirby’s. Walker says the decision he made in mid-1997 to serve alcohol at Kirby’s restaurants didn’t conflict with his moral and spiritual beliefs.

“That was 10 years ago,” he says of his earlier decision. “I’m a different person now. I was a relatively new believer. I needed to make sure things weren’t pulling me in the wrong direction. But Kirby’s was not in the business to convince people they didn’t need alcohol.”

Walker’s decision came at a time when the area was being inundated with chain restaurants similar to Kirby’s but that served alcohol. Not all of Kirby’s Inc.’s investors agreed with Walker’s decision to serve beer and wine at the restaurants.

Investors bail out

“When they went to alcohol, we got out,” says Bill Kisor, who, along with his wife, Doris, owned about 15 percent of Kirby’s Inc. “We just didn’t feel comfortable with it. I’m not going to be a part of that scene. I’m just not going to do it.”

Walker says he was raised in a family where social drinking was normal.

“I was raised a very strong social drinker,” Walker says. “Everything I did [before 1990] was a derivative of that. I wasn’t an alcoholic, though, by any means.”

Walker says he will serve beer and wine at Noodles Italian Kitchen.

“That particular issue [serving alcohol] is not one that is a block for me now,” he says. “If I hadn’t been comfortable personally with it, I wouldn’t have done it. The odds were stacked greatly against us for pulling out. We owed it to the people who worked for us and the people we owed money to. … That’s why we did that. We felt like it was the right thing to do. We had other people’s interests at heart.”

Although Walker attends University Baptist Church in Fayetteville and teaches Sunday School there, he says Kirby’s had no religious affiliation, regardless of its reputation.

“We didn’t pull disproportionately from the evangelical community,” he says. “We had a product that appealed across the board. … I don’t put a lot into the denomination. You’re not a Christian because you join a certain denomination. You’re a Christian because you have a personal relationship with Jesus Christ.

“Around 1991, I began to answer some serious questions about my Christianity,” says Walker. “Jesus is God and He died for my sins. Everybody’s walk is different, and they have to do what they have to do to remove those barriers.

“I think I was sealed with the Holy Spirit early on and just became hungry. As you became exposed to truth, it changes you. There was a period there in 1991 where I became hungry for more and more.”

Competition

Walker says he’s learned from his experiences with Kirby’s.

In August 1995, Kirby’s Inc. opened its second restaurant — in Little Rock. In January 1997, Kirby’s Inc. opened a restaurant in Rogers. When things were going well, the corporation also had plans for restaurants for Conway and Jonesboro, but those plans were abandoned.

“We were very successful in the market for a long time, then we weren’t,” he says. “You learn from what happened and you get better or you get in a downward cycle. Life is risk and reward. If you don’t take the risk, you don’t get the reward.”

The first sign of trouble came in August 1996, when Kirby’s sales dipped by 10 percent. Then, unable to recover from the first drop, sales plummeted 30 percent over a two-week period in March 1997. Sales dropped immediately from $45,000 per week to $29,000 per week.

“We were struggling to make up for that 10 percent,” says Walker. “Then we had the 30 percent hit.”

Kirby’s, traditionally one of the top restaurants in Fayetteville, saw proceeds drop by about 17 percent during the first half of 1997 when compared to the first half of 1996, according to city sales tax records. Between 1994 and 1997, Ryan’s Family Steak House, Dixie Cafe, the Village Inn, Applebee’s Neighborhood Grill & Bar, Outback Steakhouse and Atlanta Bread Co. opened restaurants near Kirby’s. Kirby’s brought in about $2.1 million in 1996, ranking fourth among the city’s restaurants. Kirby’s was ranked sixth for the first six months of 1997, with about $937,300 in sales.

The Little Rock Kirby’s had similar problems. Sales there fell to $1.53 million in 1997, a 22 percent drop from the previous year, with Kirby’s tumbling from ninth to 19th in the city’s rankings. The Little Rock eatery brought in only $124,000 in October 1997, down from $173,000 in June of that year.

Changes too late

Joe Fennel says the key is change. Fennel owns Jose’s Restaurant & Club, Fayetteville’s highest grossing restaurant in 1997 with $2.49 million in sales. His Dickson Street restaurant building now contains three eateries: Jose’s Mexican Restaurant; Jose’s Streetside, a sidewalk cafe; and Bordino’s, an Italian restaurant.

“We’ve been here a long time and have made a lot of changes,” says Fennel. “We make changes before the customer realizes we need to make changes. If you’re forward thinking enough, you’ll see the handwriting on the wall before it becomes evident. If it becomes evident, you’re already too late.”

Walker says he’s “still not sure” what happened.

“We still had high overheads,” he says. “We were in a growth mode. We could not restructure and analyze quick enough to come up with a plan that was successful. We didn’t have the capital.”

Walker says opening the Rogers eatery in January 1997 took away some of the customer base from the original restaurant in Fayetteville, but the loss to Fayetteville was inconsequential.

After it became obvious Kirby’s was in trouble, Walker signed over his part of the Rogers restaurant building to Kisor. The two had owned the building under the name K-Squared, a limited liability corporation. On paper, it looked like a $1.25 million sale since that was the value of the building and equipment inside, but no money changed hands.

The Kisors also bought the Kirby’s building in Fayetteville and equipment for $1.05 million from Kirby’s Inc. The buildings were then leased back to Kirby’s Inc. so the restaurants could continue to operate.

In September 1997, Kirby’s Inc. changed the names of the restaurants to Austin’s Wood Grill and began serving alcohol. But the new concept never took root.

“We tried to do the Austin’s concept to get back into the game,” says Walker. “Austin’s never really had a chance. It was so undercapitalized. It just wasn’t in the cards. We thought we had a plan the vendors believed in, but it was not successful.”

The change took place the same month Rio Bravo Cantina opened a restaurant in Fayetteville, setting an all-time record for monthly sales in the city by bringing in $361,767. As usual with new restaurants, Rio Bravo’s sales leveled off after the first few months.

“We took the risk and we failed at that,” says Walker. “We essentially became insolvent to the degree that we were losing other people’s money every day.”

Kirby’s Inc. closed the restaurants on Nov. 17.

No hard feelings

“A lot of people lost a lot of money, me included,” says Kisor. “I’m not blaming anyone for that. I’m going on with what I’m supposed to be doing. When you go into business, you know that could happen. With any business you invest in, you take a risk.”

After closing the restaurants last fall, Kisor decided to reopen the Rogers eatery as a non-drinking establishment under the name Kissers Grill & Bakery. The Little Rock Austin’s was taken over by Dr. Larry Bone, a Fort Smith ophthalmologist, one of the shareholders of Kirby’s Inc. That restaurant closed last spring. Kirby’s Inc. had been leasing the Little Rock building.

“We broke the leases by closing the stores,” says Walker.

Kisor has had the Fayetteville restaurant building for sale since Walker closed the eatery. After he sells it, Kisor will still be in the red over his deals with Kirby’s Inc.

“I’ll never recoup it,” Kisor says. “There’ll still be loss.”

“We’ve gained friends through the ordeal, and I have to credit that to Christianity,” says Walker. “I’ve been really blessed. I think all things work for the good of those who love Christ. Through this process, there has been a lot of pain — certainly not isolated to me — and we are very humbled by that.”

During a low point last fall after closing the restaurants, a friend came by Walker’s house one night with a gift of wine and bread. Afterwards, touched by the gesture, Walker told his children, “You saw God tonight” in the visitor and his good deed.

And, symbolically perhaps, He was bearing wine.