One of Fort Street Galley’s most exciting new restaurants is set to close its doors in downtown Detroit. Chef Mike Han is preparing to close his Korean raw seafood spot Pursue permanently at the food hall on Wednesday, May 1, after less than a year at the property. The food hall operator Galley Group terminated Pursue’s one-year contract due to low sales. “They were unhappy with the volume that we were doing,” Han tells Eater.
Pursue opened alongside three other local food stalls inside Fort Street Galley in December serving a dishes made with sustainable raw fish such as Korean-style sushi bowls. Han says that his restaurant missed its projected sales goals from the beginning as it struggled to find a niche among downtown workers during lunch hours. “I think for people who are trying to grab a nice lunch or a relatively affordable lunch that sometimes our stuff is a little bit challenging for that. Our price point is a little bit high.” Han adds that Pursue also relied on customers who were “a little bit more adventurous.”
One month ago, Pursue was informed that the restaurant was being placed in a 30-day “remediation period” and the restaurant was informed that its sales for April would need to come within 10 percent of the average for other restaurants at the property or the contract would end. Galley also gave the restaurant recommendations like offering more “approachable” sushi items such as California Rolls to try and boost sales. Han chose not to adjust the menu, because the suggestions didn’t fit his vision for the business. “I feel like this was an opportunity for me to do something that I cared about and I wanted to go out in that same way, being proud of what we had done,” he says.
Benjamin Mantica, who co-founded the Galley Group with partner Tyler Benson, confirms that this is the second time in the company’s four years of operations that it has cancelled a contract early with a business. “Mike is an incredibly talented guy and unfortunately, whether it be the city or the sort of the nature of the food hall, his concept just wasn’t really catching on.” Mantica adds that Fort Street Galley, like any restaurant business, has slowly picked up momentum in terms of sales, but Pursue wasn’t showing signs of improvement. “His performance stayed stagnant, while the other three concepts have steadily improved,” Mantica says.
Still, Han believes that Pursue and other businesses at Fort Street Galley faced an uphill battle from the start. “We opened during winter and [it was] kind of just a race to get the doors open,” the chef says, characterizing the experience as “very chaotic.” The business marketing, handled by Galley Group’s team, suffered from the beginning and the marketing director was fired three months into the opening, according to Han. “The sales are just not what they expected for any of us,” he says.
While Han admits that the sales were not where he had anticipated, he feels that closing Pursue right as the weather and foot traffic in downtown is beginning to improve is premature, especially for a company like Galley Group that bills itself as a restaurant incubator. “I got terminated because it was low sales, but at the same time we were supposed to be incubated,” he says. “This was a restaurant incubator, accelerator. That’s what we were sold on. That we could come here and test these new ideas and make food that inspires us. That’s what I left a great job in Miami for to come here and make what I want and what I care about.”
Instead, Han says he found that the cost of running the business was more than triple Galley Group’s estimated $10,000 in capital required to cover inventory and labor costs. Much of Han’s initial capital was used up within a month of the food hall’s opening. At the same time, the food stalls were encouraged to shrink menus to make them more efficient and reduce labor costs. Over the following months, every bit of Pursue’s revenue as well as Han’s own savings was poured back into the restaurant. “I lost a lot of money. I lost way more than I thought it was going to,” he says.
Mantica believes that Galley Group’s profit-sharing format — in which food stalls are charged a roughly 30 percent of sales in place of rent — is still a better option to test a restaurant’s viability. As opposed to opening a restaurant independently, operators at Galley Group properties don’t foot the bill for costly restaurant build-outs. “Had Pursue opened in Detroit in their own brick and mortar and had a similar outcome, it would have been a much deeper hole for Mike to climb out of,” he says.
Mantica admits that Galley Group initially struggled with marketing and communicating to guests about the restaurant. “I think it’s important with these big concepts to have a pretty solid level of approachability and I don’t know if we necessarily achieved that right off the bat,” he says. But Galley Group is “bullish” on their Detroit food hall. “The four managers and also the bar staff are extremely talented and honestly from an execution standpoint, I think they’re doing a fantastic job,” he says. The company is in the process of selecting a business to fill the vacancy left by Pursue and will finalize a decision within the next several weeks.
With the closure of Pursue, Han plans to once again leave Detroit. He recently accepted a position as chef de cuisine for Bamboo Sushi, the world’s first sustainable sushi restaurant group, located in Denver. “I’m excited to do it because I’ve always wanted to work with them, but also I think I need to take a more responsible step forward and have a paying job,” he says.