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Nick’s Pizza facing closure

28 September 2011 RS 56 Comments

Nick's Pizza, Elgin IL Nick's Pizza, Elgin IL (Photo by The Elginite).

Mad Maggies and Red Bar Winery & Bistro both closed recently, but it’s not just Elgin’s downtown restaurants that are having trouble in this economy. Nick Sarillo, owner of Nick’s Pizza & Pub on Randall Road sent a letter out to customers this week asking for their help in bringing in enough sales in the next four weeks to forestall a possible bankruptcy. The letter in part reads:

As of the beginning of this week, the hard reality facing us has become glaringly apparent to me. We overbuilt and overspent, and then we didn’t cut fast enough or hard enough when sales started to go downhill. The issue is primarily with our Elgin restaurant, but because we are one company, the failure of Elgin will likely impact Crystal Lake as well, depending on the choices our bank makes. This failure is not the fault of our team members; on the contrary, I am extremely grateful to them for their incredible contributions, including accepting salary cuts, taking on more responsibilities, and volunteering to market us on their own time. The whole responsibility for our troubles is mine for making the bad decisions that got us into this mess.

I realize that many of you out there see a busy restaurant and don’t understand how we cannot be profitable, or as many of you have expressed, how we could not be “rolling in cash.” We do bring in a lot of revenue, but unfortunately that is not enough to cover our mortgage and the other expenses that accrue from having such large facilities. In 2008, sales at our Elgin location began to drop, causing that location to lose money. Fortunately, Crystal Lake was profitable enough to cover both restaurants most of the time. As of this year, that’s no longer true. The sales drop in Elgin alone has been 30% since last year and close to 40% since 2007, thanks largely to the bad economy and our location next to the road construction.

We thought that the opening of a new Walmart across the street from Elgin on October 26th would bring enough new traffic to save that location and our company. Unfortunately, the bills that we have been pushing back this year are catching up with us now, about four weeks short of the finish line. Barring some sort of miracle, we are going to run out of cash to pay our vendors and team members over the next couple of weeks and will have to close. Believe me, I have already tried everything possible and would not be writing this if the amount we needed was not many thousands of dollars more than I personally could come up with. I really did believe we were going to make it to the finish line and pull through this, but I have nothing left that I can sell, pawn, or promise–just my business, which now is on the table.

I do have one last hope for me and the 200 team members of Nick’s. If within these next four weeks we could see a large increase in sales at either of our restaurants, we could still pull through. So my final request is for each of you to come dine at Nick’s Pizza & Pub and tell all your family, friends, co-workers, and neighbors to come now, too. We want to continue on as a part of your commuity and aren’t ready to tell you goodbye yet. If you wish to contact me with investor ideas or any ideas or questions at all, you can email me at office@nickspizzapub.com, call me at 815.356.5557, or simply stop by and talk in person. Thank you for reading.

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56 Responses to “Nick’s Pizza facing closure”

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  1. Terry Gavin says:

    Just another possible casualty of this President’s lousy economy which is affecting everybody & everything and the answer he tells us is more of the same, spend, tax & borrow. This situation is also a great reason the Elgin City Council shouldn’t raise taxes on us citizens or business’. Instead the city should be cutting expenses & growing the local economy to help get out of our current budget deficit!

    • Craig says:

      Terry, this is way more than “the president”. I am of an extremely fiscally conservative mindset. But the facts are that Bush bailed out the banks too, increased spending, and increased the size of government.

      Get over this idea that the Republicans will save us.

      Generally, the politicians are all crooks. They have been stealing your money via inflation for almost 100 years, over which time the dollar has lost 97%+ of its value.

      It’s our failed economic policies that have lead to the current recession and the previous boom that encouraged Nick’s over-expansion.

      When I read this story, I felt a sharp pain in my stomach. What a shame, that such a great business, with so much hard work and ingenuity expended through the years, and so many livelihoods made and at stake, is in now in serious financial trouble.

      But the part that really makes me sad and abandon one more of the few remaining shreds of hope I have left, is that by and large, we don’t even look to the cause of our dire and persistent situation.

      Many economists saw the crash coming. Loose monetary policy and manipulation of interest rates cause bubbles. Business owners like Nick, in the midst of bubbles, over-invest, expecting steady growth to continue. But the bubble pops and while revenues fall, giant mortgages still have to be paid. The rest is history (or will be soon.)

      So if it’s so obvious like I claim, why doesn’t everyone agree?

      Politicians (on both sides of the crooked isle), don’t want a true free market. They love the power they have and our current policies allow them what amounts to an essentially blank check.

      So they argue with each other, and discuss things like “Don’t Ask, Don’t Tell”. Never mind the slow debasement and robbery of your savings through inflation, a tax that affects the poor and the invalid the most.

      If you’re a liberal, you should hate our policies because they hurt the poor at the expense of the well connected.

      If you’re a conservative, you should hate our policies because they encourage spending and increase government power.

      These are not left/right issues. They are issues of liberty and the kind of society we want to live in.

      As long as these policies continue, we will see more stories like this, regardless of who is president.

      • Michael says:

        Craig,

        Very well said! I couldn’t agree more!

        I think we all need to look in the mirror and take some responsibility for the economic disaster we are experiencing. No politican forced Nick to build big and expand beyond his means. No politician or banker forced people to buy homes they couldn’t afford or to mortgage their futures on financial products that were no more safe than going to the boat! I have been guilty of spending beyond my means at times. Most of us have!

        We have come to a watershed in American history and we all need to be smart, responsible and stop blaming everyone else for our woes.

        On the flip side, I do feel sympathetic with Nick’s situation and feel that if we can help, we should get out and support our local businesses and community. Afterall, we do live here together!

      • Frederick Polgardy says:

        Nailed it, Craig! This is a dead-on response.

      • RS says:

        To be fair to the central bankers, bubbles have existed long before there were ever central banks. Bubbles, the cycle of boom and bust is simply a part of the way the world works. It’s driven by human psychology and economic feedback. You can go back in history as far as you want and you will find bubbles, boom and bust.

        • Craig says:

          Yes, but central banking inflates the boom and prolongs the bust. Certainly the world isn’t perfect, but the meddling makes it much worse.

          There was a recession just before the depression, but you never hear about it. Why? Because they didn’t try and spend their way out, and it was corrected quite quickly.

      • Lauren says:

        Couldn’t agree more. Well said!

      • paul says:

        “Politicians (on both sides of the crooked isle), don’t want a true free market”

        Yet one side wants to reduce spending and keep tax low. The other side wants to increase spending and raise taxes. A “free market” is where I keep my money and I decide where to spend it.

        Get over this idea that there is no difference between the 2 sides and thus everyone (no one) is to blame. Maybe the very essence of the problem is people like you implying both sides are the same side.

        Federal government annual spending is up $900 Billion since 2007. THAT is your source of massive federal deficits.

        Detail for the folks the inflationary effects of financing $600 Billion of deficit spending this year by printing money (not borrowing) via QE2!!! Here’s a clue: everything we buy has gone up in price, everything we own has gone down in value - including our wages.

    • Jeff says:

      You bet! The fact that Walmart took the entrance to Nick’s pizza is all Obama’s fault. The president has a lot to answer for here! Why I bet he has never even eaten at Nick’s. We should get the president to come eat at Nick’s. Try their peanuts and wonderful food. Then Maybe the president wouldn’t be hell bent on destroying elgin.

  2. westside says:

    I know I don’t contribute much to the conversations around here but to blame any national politician (past, present, or future) seems to be stretching a long ways. You are essentially trying to connect very vague dots to support a preconceived political bias.

    There are successful businesses, restaurants and otherwise, both within Elgin and beyond our borders. The simple equation is to offer good food at a good price with a friendly staff. I personally tried all three of the locations listed above and was not inspired to go back to any. I would rather to Douglas St or Public House (better food in my opinion) than Mad Maggies; I also like Villa Verone to Red Bar, and I much prefer Danny’s or Mel’s or CPA over Nick’s.

    If you like the place and want to save it, get in there and order some food.

    • Craig says:

      Westside, are you saying what national politicians do has no effect at the local level? If so, I think with the power they currently hold, very few would agree.

      The point I’m trying to make is that congress/the Fed’s economic policies lead to a wave of over-investment/malinvestment and that Nick’s was no exception. When the bubble popped (as blown by our (the politicians’) policies), businesses like Nick’s were left to face the repercussions while banks got bailed out.

      • westside says:

        Agree or not that is your choice. The point I made is that no politician, national, state or local, is causing Nicks to close. This is very simply, in the case of Nicks and Red Bar, if you followed their story, a byproduct of owners over extending themselves on loans that they took for expansion. It was a calculated risk on their part that did not pay out.

        Of course on the macro level, political policy can have an effect on the economy as a whole. But that is not the issue here. If you can not sell enough pizzas to cover the mortgage on a giant log cabin then that is not going to be fixed by political policy.

        Businesses come and go everyday with and without changing political policy or certain parties being in charge. There are thriving establishments in this and other economies. Nicks was simply not able to sell enough pizzas to pay the bills.

        As I said previously if you want the places to remain in business go by a pizza or glass of wine but to blame any politician, past, present or future, for such a micro economic event is insane.

        • Realist says:

          If your statement is true then many of us took a great “risk” when buying homes in the last 15 years. Funny, I thought I was living the “American Dream” and providing a safe and nurturing home for my family, not taking a risk. Nick was simply trying to do the same in securing a future for his family, shame on him. Never mind the horrible construction over the last year and a half that has taken place in front of his business all for the sake of growing a corporation. But people will shop at the Wal-Mart all the while trying to figure out how to get to Nick’s since they completely changed the entrance to his business. And FYI that wood is not a log cabin, its salvaged wood from old barns in the area. Shame on him again for trying to keep the integrity and livelihood of what this area USE to be! It’s another very unfortunate situation that one of our community members is suffering through and I hope many will support him and his business during this difficult time!

          • westside says:

            You can read into mine and other statements what you want. Instead of complaining that politicians, construction, or other outside forces besides bad business decisions caused the issue, go there and eat. Quit wasting time here and go pick up a pizza. Like I said repeatedly I did not enjoy the food at Nicks (not saying it was bad just not to my liking) and frequent other local eateries, including those that may or may not be in construction zones and may be in Red or Blue districts.

            If you have good quality food at a good price with a friendly staff and success will find you.

  3. LFG-A says:

    The key is to THINK local. That means vote, shop, dine, support, volunteer - focus LOCAL first to build a strong community. That momentum will only strengthen our county, state, country, world. Nick Sarillo has always thought LOCAL first since I first met him in the mid-90’s and he was opening the Crystal Lake location. His business (and others like In The Neighborhood Deli) SHOULD be supported over a franchise when possible.

    There are many other local places to dine, shop and support instead of going to Olive Garden, Barnes and Noble, Costco, etc… Every trip to Red Lobster in Dundee not only lines pockets of a large corporation out of state, those simple sales tax dollars and revenue we need for our community is given to another.

    So remember — Please shop, dine-out and support local businesses - ELGIN needs it more then ever! Set your priorities when making choices for yourself and your family - think LOCAL - it’s okay to splurge and indulge outside Elgin - but we want to DRAW the folks into Elgin and keep some pride, notoriety and also sales-tax dollars here too.

    • One Vote says:

      So, is Little Ceasar’s local?
      The dining choices along Summit and Waverly are worth a look.
      There’s that Babylon place. Lots of variety. Lots of eclectic choices. A bit pricey.
      Then there was the Hotdog Joynt next to Jewel. We felt the need to support their efforts. But they managed to serve cut fries that were cold on the inside and burned on the outside. And the brown paper napkins soaking up grease added to the presentation.
      We like the Mexican place at Dundee and Summit, next to McDonalds. But they never have the strawberry licuados.
      Do we blindly buy local? No.
      Nick’s has a legitimate beef here. I’ve been there a few times and enjoyed it. My daughter liked going there for the gluten-free pizza.
      The economy and the construction killed them.

      • LFG-A says:

        Feedback to our local businesses is KEY to help better services and quality. If the bagels you get at Big Apple Bagels are hard, tell them. It’s just a franchise operation and they need to take care of overhead, just like Quiznos struggled with downtown. The food at Babylon Kebob is really good and worth the price, but often here is there working by himself to keep down costs, thus a longer wait time for your food. My pals and I have given him that feedback and he’s doing much better as of late, hopefully profits are there to hire PPT help or a dishwasher to improve speed and pricing.

        • One Vote says:

          My point is that I give the local places a try and shop accordingly. You thought Babylon was reasonably priced; I did not. There’s no ambiance in ceiling tiles painted match the Formica. It was a fast food place. Cool to try something new. I might take out-of-town friends there just to show them different food.
          Sorry, I’ve got no loyalty to the place.
          The Hot Dog Joynt knew their fries sucked. They even put up window signs about a new cook. So what? That should have been obvious from the first order.
          On a tight budget I’m like Gordon Ramsay. I haven’t got money to waste on bad food.
          Al’s is my go to place.

          • Julia says:

            This shop, eat, do whatever local speeches drive me crazy. It’s great to support local business, but remember ALL these businesses are local — chain or otherwise. They employ local people and are often owned by local people — people who in turn plug that money back into the local economy.

      • Craig says:

        Good idea on the Babylon Kabob! I needed a lunch suggestion…and I called ahead to avoid the wait.

    • elginkevin says:

      Is there a local alternative to Red Lobster? I’m not being snarky, I just can’t think of a good local seafood restaurant. Maybe I missed one.

      I like the honesty in the letter. Hey, we’re hurting. Spend your money here this week so we can be here next week. I’m likely to respond positively to honest requests for help. And, I like the pizza.

      • Realist says:

        Port Edwards in Algonquin!!!! Or Bob Chin’s in Wheeling. Great seafood places. Yes they cost a little more than Red Lobster but you’re not getting quality at Red Lobster either. There’s also a place called Two Tails in Woodstock. They have more fried seafood but nonetheless another great place for po’ boys! I’m getting hungry for scallops now! :)

      • One Vote says:

        There was Porter’s in Crystal Lake. Do you economists know why they closed?
        And Dover Straits on Golf Road in Hoffman Estates used to be good. It’s priced out of my league so I haven’t been there for years.

    • Craig says:

      While certainly an unfortunate news item, this whole story & thread has really gotten me (& others clearly) to be more cognizant of spending their dollars locally, which is awesome!

  4. b4real says:

    Elgin citizens and leaders should think local first and give every opportunity for entrapanuers to make it. Do not raise taxes lower them and cut spending, which allows for more disposable income. This is the way to support the local businesses that are doing the best job of retaining customers. I like Nicks and will continue to support his business. All politics is local first, then county, state and federal.

  5. The Great Karnack says:

    This is really a sad situation and has more to do with the construction over the past year for the Wal-Mart. My family and I have been going to Nick’s regularly as long as it has been there. Nick is a great guy, a hard worker and an excellent role model to his employees.

    A year ago, all of the tables would be packed and you would typically (and happily) wait 10 minutes for a table to open. Not a problem since the kids love to eat peanuts and through them on the floor. Recently, we have never had to wait and several table were open.

    Getting in and out of Nick’s became a huge hassle and on more than one occasion, we decided to go somewhere else because of the construction nightmare.

    Blame Wal-Mart, not Obama. Just wait to see how many more businesses head into the dumper after November 1st and I can’t wait to see the holiday traffic jams on Randall. We can blame Obama for traffic delays on the roads too!

    • paul says:

      “Blame Wal-Mart”

      Walmart is in the road construction business now?

      “we decided to go somewhere else”

      Nick’s struggles is your fault, then!!!

    • Craig says:

      I’m not blaming Obama specifically. I’m blaming every politician (Republican & Democrat) who either supported or was willfully ignorant to the corrupt and unfair economic policies of the last ~100 years, putting their own interests over those of the people who they are meant to represent.

      • Terry Gavin says:

        Good response Craig but what’s happened in the last 3 years is like driving a bus off of a cliff without even bothering to slow down both in Springfield & D.C.!

        A couple of months ago I was at a meeting & had a chance to speak with Senator Lauzen from Aurora & he mentioned how many thousands of jobs were leaving Illinois & relocating to neighboring states. Why you might ask? Because our one party state ruling class jacked up the corporate tax rate. Also not being reported is the # of productive/successful people who are moving out of state to escape the new higher state income taxes here.

        What I’d like to know is where can someone move to if our national politicians bankrupt America?

  6. Terry Gavin says:

    Hey Craig & most of the posters on here, I didn’t blame Barry Hussein Obama for Nick’s struggles, I simply made a rhetorical comment of a “another possible casualty” you guys took it much farther then that!

    So be snarky & negative the facts are that this president has employed “Keynesian economics” of spending vast amounts of taxpayer dollars to jump start the economy/private sector & as history has shown us it’s failed! Instead we’ve got horrible unemployment, a devalued currency & debt for generations to come with no recovery in site, just like FDR & depression.

    The conservative movement/Tea Party is simply asking for Constitutional sanity. Yes there’s corrupt politicians on both sides of the isle & Pres. “W” Bush spent to much & didn’t secure the border but compared to this administration he was a “piker”.

    So my real point, if you bother to read my original post was that the City of Elgin can’t raise our taxes anymore or we’ll see more of this kind of outcome, business’ closing & the local economy constricting even further. I’m very sensitive to small business’ failing since I’m a small businessman trying to make it through the worst economy in my life of 57 yrs.

    Craig, let me ask you a question is our current tax code fair? If not then do you support either a “fair tax” or a “flat tax” or would that put you out of business?

    • Craig says:

      Lol Terry, I get that question all the time. I would LOVE if the current tax code were abolished. Although a good portion of my job is navigating the endless mazes of government regulations and the resulting bureaucracies, accountants do a lot more than taxes, and I have no doubt I’d find something to fill the hours and pay the bills.

    • Dave says:

      What about bush,clinton ,you act like obama effed up the world,did you jyst wake up,the usa was screwed before and after obama ,its only gonna get worst ,the depression is coming ,if you want to talk politics what about thee repubs spending 60000 ayr on muffins and coffee or the high priced hookers and cars or better yet they also get wardorobe exp and alot more bogus acts in are congress

  7. The McEvil One says:

    1. Stop with all the Barack Obama/George Bush bashing…the economy has sucked for a long time. Crying about the past doesn’t solve the present & won’t help the future.

    2. The construction has really screwed Nick’s. The new entrance on Shasta Daisy Drive (who came up with that name!?!?!?) is a pain in the @$$ to get to.

    3. Nick’s has really helped local charities over the years between both his Elgin & Crystal Lake locations. Just yesterday, they sponsored a Lock-In for MDA @ Elgin…even though they are struggling financially. It’s time to repay the favor!

    4. Shasta Daisy Drive??? Really???

    • Craig says:

      1. I think there is something to be learned from what happened to the past. What’s that saying about those who ignore history?

    • LFG-A says:

      Sadly, Google maps still shows the OLD entrance to Nicks with Shasta Daisy Drive still set-up in configuration to showcase the original model homes and showroom. http://g.co/maps/xugzm (BTW, Shasta Daisy is a natural prairie planting type flower/weed/bush)

      Wonder how people living in those houses feel about loosing their large trees along Bowes Rd and all the increased traffic past their short driveways?

      • The McEvil One says:

        The owner closest to the expansion was in the Courier right after the project started cause she claimed that the city never contacted her that several of her trees were going to be removed or die from their roots being damaged from the construction crews.

        The city’s response: “We did communicate, but we may have not explained the detail of what would happen.”

  8. JP says:

    If anyone does choose to visit this establishment over the next few weeks please, pay cash. This guy is trying to save his business, he doesn’t need to be shelling out 3% of his sales to the banks due to Credit Card swipe fees.

    • Terry Gavin says:

      Great suggestion JP! As a concerned citizen of Elgin I really hope Nick’s can pull through this crisis, it’s a nice place to dine at.

  9. Dave says:

    The main reason alot of businesses dont stay open is because the owners and managment only cater to one crowd ,u wont make ir any business catering to one race.if you dont somethibg for everyone then u dont have nothing at all,as for the president ,how can yoy blame him,if you do blame him then blame all inclyding allof congress as well

  10. Terry Gavin says:

    Another student of excellence from U-46? We should all be proud for paying for this kind of education. Very nice job of typing/spelling there Dave…

  11. baptiste says:

    Nick’s pizza is in trouble and yet the owner, Nick sarillo, is busy giving speeches at the Elgin small business summit. What is that about????? No wonder the downtown Elgin model is failing. Please.

  12. Terry Gavin says:

    I drove by Nick’s last night on the way to a sales appointment around 6pm & the parking lot was nearly full on a Monday night! It was a great to see that.

  13. MS says:

    Forgive me for being jaded, but will four weeks of a full parking lot stave off bankruptcy? He indicated sales are off 40% since 2007. Sorry, it sounds like a final gasp before the end.

  14. RS says:

    http://couriernews.suntimes.com/news/8342755-418/small-businesses-find-focus-resource-s-at-elgin-summit.html

    Of course, sales at Nick’s Pizza & Pub, in both Elgin and Crystal Lake, have increased 50 percent some days, 100 percent others since Sarillo sent an email to 16,000 people in the restaurant’s frequent-customer database last month. That’s brought in 60 percent of its immediate goal to bring the business back into the black, he said.

  15. Chris Man says:

    I enjoyed reading all the comments about Nick’s Pizza’s problems and solutions from the various commentators. We will be there this week-end for Pizza. We are from Bloomingdale, IL and our daughter lives in Elgin. We are planning on a Sunday Pizza day, and I will pay cash.

    GOOD LUCK NICK—I HOPE YOU STAY OPEN BECAUSE YOUR PIZZA IS GREAT.