ONE afternoon in February, Ahmass Fakahany, a financier by training, was contemplating the economics of forks.
Baguette forks, to be precise — two silver ones on a table at Osteria Morini, a redoubt of one of New York’s pasta gods, the chef Michael White.
To the untrained eye, the forks looked identical. “The difference,” Mr. Fakahany said, reaching for one, “is this one costs $4.50 less.”
It’s not what you might expect in this refuge of Emilia-Romagna, where the talk tends more toward lumache al verde and petroniana than to the price of flatware. But then, Mr. Fakahany isn’t what you might expect here, either.
After a lucrative — and quite controversial — career at Merrill Lynch, Mr. Fakahany, 53, is bringing a Wall Street sensibility to a business that can make investment banking seem easy by comparison: running restaurants. And, so far, he’s been very, very good at it.
In three years, he and Mr. White have a swiftly growing restaurant empire rivaling those of the celebrity chefs Mario Batali and Daniel Boulud. Mr. Fakahany and Mr. White now run acclaimed Manhattan restaurants like Marea, on Central Park South, and Ai Fiori, tucked away on the second floor of the luxurious Setai Fifth Avenue hotel. They have expanded to Hong Kong, and there is talk of Istanbul, too. This year, they hope to open at least five more restaurants, in locations as varied as the East Village of Manhattan and the Las Vegas Strip.
What is so remarkable about their success is that, in the restaurant game, failure is as common as kitchen burns. Nationwide, most new restaurants close within their first year — industry experts put the failure rate at anywhere from 60 to 80 percent.
How have these guys done it? It helps that Mr. White is widely considered to be one of New York’s hottest chefs. But it also reflects what Mr. Fakahany, the money man in this operation, is doing outside the kitchen.
Consider those forks. By switching to the cheaper ones, Mr. Fakahany said, Osteria Morini, in SoHo, would save thousands of dollars.
But that’s not all. He has hired back-office staff from places like Goldman Sachs and Bain Capital to help him watch expenses. Some general managers and sommeliers receive deferred cash bonuses, à la Wall Street, in order to reduce turnover. To hold down bills for cabs, black cars and couriers, Mr. Fakahany hired his former driver at Merrill Lynch to shuttle around most everything, from clients to crates of wine.
And, because he knows that a blowout on the expense account can irk corporate bean counters, he’s willing to cut executives a bit of slack. In Wall Street fashion, he is sometimes willing to do a trade — his food and wine in exchange for something other than cash or credit. For instance, he recently turned a $4,500 dinner bill from a group of British Airways executives into nine plane tickets. He used those tickets to reward his staff at the Altamarea Group, the restaurant company that he and Mr. White run out of a SoHo loft.
Altamarea is growing so fast that some industry insiders even wonder whether it will turn out to be the Merrill Lynch of the city’s restaurant scene — a company that, like Merrill, ends up overreaching, with disastrous results.
Mr. Fakahany says that’s nonsense. Since 2008, he says, Altamarea’s revenue has surged roughly 250 percent a year. In 2011, the company, which is privately held, had revenue of almost $50 million, up from just $3 million in 2008, he says. Marea, its flagship, generates $50,000 to $60,000 in revenue a day, and Ai Fiori isn’t far behind. As for profit, Mr. Fakahany says the company has double-digit margins, but he wouldn’t elaborate.
After starting with high-end restaurants, the company is adding more mid-range restaurants, like Nicoletta, a pizzeria in the East Village that is expected to open in May.
“I am believer in what we are doing,” he says. “We are developing distinct brands where we can open multiple restaurants, lowering costs as we go.”
IT’S been quite a journey for Mr. Fakahany, who saw the financial crisis up close at Merrill. He was a top deputy to E. Stanley O’Neal, who was in charge during the firm’s disastrous push into mortgage investments.
“I have a lot of regrets, and there are things I wish we would have done,” Mr. Fakahany says. “There are no heroes in the Merrill story.”
Still, Mr. Fakahany did well for himself at Merrill, where his posts included chief financial officer and co-president. Last year, he won a $1.2 million arbitration award against the firm, which is now part of Bank of America, over his compensation. Since 2004, he has sold shares in Merrill that are valued at $13.1 million, according to Insider Score, which tracks stock sales of corporate insiders.
