San francisco restaurants

More San Francisco restaurants are mulling a drastic step this winter: closing for ‘hibernation’

It may soon be hibernation season for San Francisco restaurants.

With indoor dining once again banned and winter weather cutting into outdoor dining revenue, a growing number of restaurants in the city are, for the first time, considering the more drastic step of possibly closing for the next few months. Others are thinking about closing for the second time since the start of the pandemic due to a lack of business.

It’s a last-ditch effort known as “going into hibernation” in the industry, and it allows business owners to cut food, supplies and payroll costs for an extended period of time, with hopes of reopening.

Already, a number of the city’s most historic restaurants have made the leap. The 171-year-old Financial District establishment Tadich Grill decided not to reopen in November after San Francisco didn’t move to allowing 50% capacity for indoor dining. And this same situation is why Boulevard in San Francisco, chef Nancy Oakes’ Northern California stalwart that opened more than 20 years ago, went into hibernation on Nov. 22.

Then there’s a slew of other chefs and restaurateurs who are strongly considering the step despite complications such as working out deals with landlords, paying employees and the uncertainty of whether they’ll be able to reopen.

Mission District’s Guamanian restaurant Prubechu considered hibernation after the indoor dining ban was announced. In just one day, co-owners Shawn Camacho and Shawn Naputi noticed that 30 reservations for outdoor dining got canceled.

“Anytime we start getting momentum, it’s just like something else pops up and stops it,” Camacho said. “We haven’t made that decision to shut down for a while yet, but we’ve also never been as close to making that decision as we are right now.”

Brandon Jew, owner of the acclaimed Mister Jiu’s restaurant in Chinatown, hasn’t decided yet whether to go into hibernation, but as a survival strategy it’s been on his mind.

Nick Otto / Special to The Chronicle

E&O Kitchen and Bar in San Francisco, a pioneer in the city’s Asian fusion scene that opened 20 years ago, briefly went into hibernation in March to save money. While Sharon Nahm, the restaurant’s executive chef, said there are no immediate plans to return to a hibernation, “that decision could change next week or the week after.”

“It’s realistic to say that any restaurant right now is having to maintain the conversation about it,” Nahm said.

What gave the idea new energy recently is the spike in COVID-19 cases throughout the state, and how officials have scrambled to implement restrictions. Govt. Gavin Newsom forced most California counties into the most restrictive purple tier of his reopening plan, which triggered every Bay Area county to ban indoor dining. Newsom also implemented a curfew for counties struggling to control the spread of the virus.

Local restaurateurs are also worried about a possible outdoor dining ban, similar to what Los Angeles County is experiencing, which could further limit revenue streams for the industry. It’s all part of an increasingly bleak picture for the restaurant scene in San Francisco, said Laurie Thomas, the owner of Rose’s Café and Terzo. She saw how restrictions were hurting her business on a recent Tuesday, when her Mediterranean-inspired restaurant in San Francisco, Terzo, served around 14 customers, a number she said is “hard to survive with.”

“What people are trying to figure out right now is, do we hibernate in order to conserve cash? It’s a real choice to make at this point,” said Thomas, who also serves as the executive director of the Golden Gate Restaurant Association.

There are benefits to closing: Money can most obviously be saved on payroll, utilities and food ingredients. At Beit Rima, San Francisco’s trendy Arabic comfort restaurant, chef and owner Samir Mogannam said he’s thinking about a hibernation period because he could save tens of thousands of dollars. Earlier in the pandemic, he cut a check for $36,000 in health care fees for staffers — money that wasn’t being made up in sales.

“My staff is young and healthy, and paying that kind of thing while we’re not making money, it’s hard to deal with,” he said. “It’s just something else that has me thinking about closing down for a while. It’d be a big deal to be able to save a few thousand dollars when we really need it.”

When E&O temporarily closed earlier this year, Nahm was able to save $10,000 to $20,000 in payroll. Add utilities and food costs, the overall total was closer to $20,000 to $25,000 in savings. Umberto Gibin, the owner of upscale Financial District spot Perbacco, said by furloughing his employees alone, he saved between $10,000 and $20,000 per month when he closed his Italian restaurant in July and August. For rent, he worked with his landlord on delaying payments during the brief hibernation, though he declined to go into specifics.

“The conversation was very clear — we were closing temporarily to save money — and that’s what we told our landlord. There was nothing else to do and he agreed,” Gibin said. “Saving that money is what helped us up to this point.”

David Hanna, Tadich Grill general manager, takes an order over the phone as he works at the Tadich Grill in July.  The restaurant is closed for the foreseeable future.

David Hanna, Tadich Grill general manager, takes an order over the phone as he works at the Tadich Grill in July. The restaurant is closed for the foreseeable future.

Lea Suzuki / The Chronicle 2020

Hibernating is not easy, though. Gibin doesn’t plan on closing again because he’s wary of losing regulars. Before Perbacco closed in the summer, regular customers made bulk orders. When it reopened in September, those diners didn’t return in full force, he said.

“It’s a logical result,” he said. “When you remove yourself from the market, people will go somewhere else and do something different.”

Nahm was able to negotiate deals with her landlord and other companies, but as the pandemic continues, it’s become more difficult, she said. “If there were no city requirements that bill collectors be more lenient, then they will come to collect money,” she said.

Plus, the process of reopening is complicated. Restaurants must find and hire staff again, while being nimble enough to accommodate fluctuations in safety restrictions. Nahm described reopening a restaurant after a months-long closure as taking “twice as much work” as opening the business originally. She cited reasons like having to quickly re-establish payments with vendors, hiring new staff if those who were laid off already found other work and having to put into place operations for takeout and delivery services.

“It’s a tough position to be in once you’re trying to come out of hibernation,” she said.

Still, some restaurateurs are starting to think they may have no choice but to do it. As some businesses think about temporary closures, the Bay Area food scene has been rocked with permanent shutdowns since the start of the pandemic, with some industry experts expecting the local industry to lose at least half of its overall restaurants before the pandemic ends.

Brandon Jew, the owner of San Francisco’s Michelin-starred Mister Jiu’s, said that although he hasn’t decided to put his Chinatown restaurant into hibernation yet, the idea of ​​doing so is never far from his mind.

“There’s so much happening right now that you really just have to consider all of your options all of the time,” he said. “It’s just about making the best decision for your employees and your business, because you want there to still be a place for them after all of this is over.”

But a number of San Francisco chefs remain optimistic about the industry’s future, including Jew, even with the hibernation talk increasing. Jew said he’s hoping the Restaurants Act, which is a $120 billion fund that would provide small restaurants grants to pay for things like payroll, benefits, rent and personal protective equipment for workers, will soon be passed and serve as a lifeline for places like his . In the meantime, he thinks San Francisco’s food scene has a chance of becoming more intriguing.

He pointed to the proliferation of pop-ups in the Bay Area, businesses that don’t have to worry about high overhead costs, payroll costs or rent, like brick-and-mortar spots. He said these chefs have an opportunity to play a larger role in shaping dining in the city during the pandemic.

“Honestly, I’m a little excited to see these pop-ups grow and build their followings,” he said. “What you might get after a while is a food scene that’s a little grittier, and able to take more risks. It’s one of the few things we can be excited about.”

Justin Phillips is a San Francisco Chronicle staff writer. Email: Twitter: @JustMrPhillips