LEAD — In April, Lead began to experience a Main Street business boom. Now it appears to be a bust. With at least three business closures announced on Main Street and the Homestake Chop House restaurant closing Sunday, Nov. 13, Lead will once again begin the off-season struggle, indefinitely.
Homestake Chop House owner Christopher Renaud confirmed the closure Friday and said his ownership group, in operating the business, was essentially testing the following business premise.
“If we turned the Homestake Chop House into the leading quality restaurant in the Black Hills, would enough area residents drive to Lead to eat out during the non-tourist months to minimize losses in the slow months so that the profits from the summer season and winter holiday season would be enough to offset the losses during slow months,” Renaud explained. “Given the high costs to run and operate such a large building as well, particularly the utility costs, and the fact the we paid our people wages in excess of the typical casino restaurant in order to have a high quality team, this meant we needed people to visit in the non-tourist months from Spearfish frequently, Rapid City occasionally and a number of customers being willing to drive past the casinos in Deadwood.”
Even though the Chop House became the No. 1 rated restaurant on Trip Advisor for the Black Hills, this proved not to be the case.
“Though trends were somewhat promising from spring 2016 to July of 2016, the business plateaued at a revenue level not sufficient to cover the operating costs and wages of the restaurant and so we decided that we were not going to continue to subsidize the operations,” Renaud said. “The quality was there based on our reputation, Trip Advisor ratings, word of mouth, etc., but apparently the quality was not something people were willing to drive for, or at least, drive past the casinos for, and that is very unfortunate in our view. My spouse and I invested many hundreds of thousands of dollars to see if such a high end restaurant could survive in the Hills outside of Deadwood, as we really wanted to see the restaurant at least break even, but it was not to be the case, and we needed to make the tough decision to reallocate our investments to other areas that generate a return and do not require constant subsidies for the sake of our family.”
When asked if the Chop House would reopen for the summer, Renaud said it depends on whether another potential operator steps in and decides to try again with the restaurant.
“Perhaps with a different and lower-cost business model,” he added. “We will be happy to pass along the intellectual property associated with the business to anyone who would want to try a different approach, though the Trip Advisor rating would not pass along to a new ownership group.”
At the time of the closure, the Homestake Chop House had 13 employees on payroll.
“That number would have been slightly higher in the summer when we hired students for front of house operations and cook interns,” Renaud said.
Closing on Lead’s Main Street are Café 808, High Mountain Outfitters and Mohr Art Gallery.
“Yes it is true that Cafe 808 is closing,” owner Cindy Gaffney said. “Our last day of business is Dec. 17. My husband lost his job four months ago, and was able to find work out of state in Kansas City. I've been here alone running the cafe for three months now, which is OK since I am actually the owner, not my husband. But I miss him so with my lease ending and this railing taking away customers, it is not worth it for me to stay and fight it.”
Repeated attempts to contact the owner of High Mountain Outfitters were unsuccessful, although the store front in Lead is empty and a sign in the window directs the public to the business’s new store at 79 Sherman Street in Deadwood.
Gaffney said Mohr Art Gallery, located near the other two business closures, is closing on Nov. 20 and moving to Spearfish. Attempts to contact a principal for this business were unsuccessful, as well.
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