GLU Hospitality can’t stop, won’t stop opening new restaurants

Philadelphia’s restaurant scene has been climbing out of the pandemic, and the number of openings is beginning to rise again.

Even by current standards, few restaurateurs have been as bullish on Philadelphia lately than Derek Gibbons and Tim Lu of GLU Hospitality.

In less than three years, they have opened 40,000 square feet of space, including an Italian restaurant (Figo, in Northern Liberties); a Mexican restaurant (Añejo, in Northern Liberties); Vesper clubs in Center City and Northern Liberties; a Japanese restaurant and omakase room (Izakaya by Yanaga and Omakase by Yanaga, in Fishtown), and the growing Bagels & Co. chain. They also recently began operating 1225 Raw, an existing sushi restaurant in Washington Square West, which adjoins Leda, their lounge. (They briefly operated SET NoLibs, an Asian restaurant in Northern Liberties, but split with their initial partners.)

Gibbons and Lu plan to double their holdings in 2023, adding the vast Brewerytown Food Hall in Brewerytown; a sports bar called The Peabody, where the Draught Horse was on Temple University’s campus; a takeover of the former Center City building that housed Rooster Soup and Goldie; and at least four additional Bagels & Co. shops, in Center City, North Philadelphia, South Philadelphia, and Brewerytown.

They know the risks. And in a chat earlier this week, they conceded that this quick growth — which they said they are bootstrapping — makes them uneasy.

Yet, they said, it is necessary.

“In any business, or anything that you’re trying to grow at or get better, there’s always going to be a period of uncomfortability and fear,” Gibbons said. “We talk about this all the time. This uncomfortable position that we may be in now is the only way to get to that next step in business.”

“It’s as much a real estate strategy as it has been a operational strategy,” said Josh Weiss at MSC Retail, who oversees GLU’s leasing deals. “They’re very opportunistic on second-generation or turnkey spaces, and we have been able to find spaces where they have embedded the bagels concept into a larger full-service space.”

GLU also is smart about “realizing efficiencies and critical mass through clustering concepts,” Weiss said. “In Northern Liberties, clearly they have a big stakehold there. [Washington Square West] is going to be as well. When we are looking at space, the question is, ‘how can they operate efficiently with one, two, or three concepts either in the same building, adjacent or nearby?’”

GLU cycles employees through different concepts. One may do part of a shift at Bagels & Co. and the rest at Figo, for example. “I think it’s greatly helped with their employee retention at a time when that’s been so difficult for everyone,” Weiss said.

They also have veteran chef Hee “Chino” Chang on board to oversee the kitchens. “Whatever we want to do, he can do it,” Gibbons said. Sushi chef Kevin Yanaga handles the Fishtown restaurants.

As GLU grows, Lu said, he and Gibbons are encouraged to expand by employees who want to work hard. “We’re like, ‘I want to create a path for these people,’” he said.

Tim Lu, 41, who grew up in Havertown, came into the business after Penn State by investing in Red Zone, a club in Burlington, while managing at a Best Buy store. He said that when the commute from Havertown became unbearable and his partner in the club backed out, he left retail.

Lu opened restaurants and bars in Center City (Vesper) and Northern Liberties (Crabby Cafe at the Piazza). Bart Blatstein, who created the Piazza, leased him the bar/restaurant/swim club across the street, which in 2019 he renamed Vesper Dayclub.

Derek Gibbons, 34, grew up in North Jersey. One grandfather owned a seafood market, the other had liquor stores and wine shops. He said his first job was stocking the shelves at 10 years old. “My parents said go get a job if you want to make money and spend money,” he said.

Gibbons majored in hospitality management at the University of Central Florida, interned at Todd English, Starwood, and Marriott, managed bars and clubs in Miami, and then moved to New York. He spent seven years with the Butter Group, overseeing 1OAK and Up & Down.

The club life was “fun in my 20s,” Gibbons said. “As I got older and [got] engaged, I wanted to own my own thing and not have to answer to anyone, and have the ability to create new concepts.” On a trip to Philadelphia, he met Lu.

Gibbons said he viewed Philadelphia as “a blank slate. As I learned more, I realized that Philly is a really big restaurant city, people love to eat here.”

They formed their partnership in spring 2019, mashing the G in Gibbons with Lu’s surname. Their first GLU project, opening in January 2020, was Leda & the Swan, a lounge with private dining at 1224 Chestnut St. on the north side of the sushi restaurant 1225 Raw, whose entrance is on Sansom Street.

Less than two months later, the pandemic shut it down. For its recent reopening, Gibbons and Lu struck a deal with 1225 Raw owner Tony Rim to operate both spaces cohesively.

“Most businesses would love to get acquired or have the ability to get acquired one day,” Gibbons said. “I think that’s ultimately a goal of ours. But I think we’ll see where the next year, two years takes us. We would love to scale out the bagel shop. We’re opening in Florida, which is scary and different, but that’s the only way to get that concept to scale nationally, ultimately. I think the total endgame to be on the golf course more than I’m in the office.”

Lu laughed.

“I don’t play golf. I have to say the end goal is security,” he said. “The pandemic made it even more apparent how things are so easily changed. There are multiple times where we could just say, ‘All right, let’s not take on this next idea,’ and I think we could probably live fairly comfortably. But I’m more scared that if we don’t try it, then we don’t provide that security for not only ourselves but people that rely on us in our businesses.”

Gibbons nodded. “I would never want to look back and say that I wish we would have done what we’re doing now. Life is too short. I’ve always had that mind-set where I’m like, ‘Why not now?’”