Louise's Trattoria to expand again, may go public: owners consider initial public offering in 4th quarter.

The successful Italian restaurant chain Louise's Trattoria Inc. plans to expand into three other regions nationwide and may even go public at year-end.

Santa Monica-based Louise's, with 1993 revenues of about $20 million and 12 restaurants in Southern California, plans to open five additional outlets this year. The new eateries would be in Milwaukee; the Georgetown section of Washington, D.C.; Bethesda, Md.; Philadelphia and Pasadena, Calif.

Co-owners William Chait and Howard Weinberg, both 33, are also talking to investment banking firms Alex. Brown & Sons, based in Baltimore, and New York-based Wertheim Schroder & Co. about possibly taking Louise's public in the fourth quarter, Chait said.

"They've been setting themselves up (to go public) for the past several years," said Janet Lowder, president of Restaurant Management Services, a Rancho Palos Verdes-based restaurant consulting firm.

The chain started out small, with fewer than half a dozen outlets until 1990, and was able to expand in a recession-stricken market, Lowder said.

There is also a theory among restaurateurs that an eatery successful in Southern California can succeed anywhere, she said. Since Louise's has flourished here, a lot of investors should be interested in the company, she said.

Louise's is following in the footsteps of locally based Cheesecake Factory Inc. and California Pizza Kitchen, Lowder said.

Calabasas-based Cheesecake Factory succeeded in Southern California, went public in 1992 and is expanding to other regions of the country.

Westwood-based California Pizza Kitchen, meanwhile, also made a niche for itself locally and was preparing to go public when PepsiCo Inc. bought a substantial stake in the company in 1992. California Pizza Kitchen is also expanding nationwide.

In fact, Louise's plans to expand into markets in which Cheesecake Factory and California Pizza Kitchen have already proven to be successful, Lowder said. Cheesecake Factory and California Pizza Kitchen each have a restaurant in Washington, D.C., and California Pizza Kitchen has one in Chicago, which is close to Milwaukee.

The idea for Louise's was born after Chait graduated from UC Berkeley and he got a night job at Jacopos, as Italian restaurant in Beverly Hills.

He grew to like the business and, at the age of 25, with two other partners, brothers Steve and Allen Stern, bought Louise's Italian Kitchen on 26th Street in Santa Monica. Chait collateralized some property his family owned, the partners borrowed money from the bank and they paid $200,000 for the outlet in 1985.

At the time, the restaurant was pulling in revenues of about $500,000 a year, primarily served to-go food and was furnished inside with picnic tables. The new owners immediately replaced the tables with conventional dining room furniture, installed a dishwashing station and established sit-down dining service.

Chait and his partners also launched a direct mail campaign and expanded the delivery service. Within two years, the restaurant was making $1 million in annual revenues, Chait said.

Business at the original 1,500-square-foot Louise's Italian Kitchen soon "maxed out," and in October 1986, the partners opened a new Louise's Trattoria on Montana Avenue, also in Santa Monica.

Prior to 1985, Montana Avenue in the part of town where Louise's Trattoria was located had been dotted with gas stations, shoeshine shops and other neighborhood stores. Between 1985 and 1990, that street transformed into a quaint walking district with more foot traffic and Louise's Trattoria flourished, Chait said, adding that at that time, it was one of the few little neighborhood Italian restaurants around.

At the same time that Louise's Trattoria debuted, Chait and another investor, Bruce Saiber, bought the Starlight Cafe on Melrose Avenue in Los Angeles and turned that restaurant into the Angel City Grill. That eatery received raving culinary reviews and succeeded in its own right, Chait said.

The three restaurants the partners now owned -- Louise's Italian Kitchen, Louise's Trattoria and Angel City Grill -- each had a different menu.

During the next couple years, the partners opened the Beverly Restaurant & Market in Beverly Hills and Ruby B's, a diner on Pico Boulevard in West L.A.

They found the diner concept difficult to run. So the partners, deciding to stick with what they were good at, closed Ruby B's within a couple months and opened up a Louise's Trattoria there instead, Chait said.

The partners also converted their Beverly Restaurant & Market into a Louise's in 1988, and converted Angel City Grill into a Louise's in 1990.

In 1988, Chait's lifetime friend, Howard Weinberg, bought out the Sterns and became co-owner of the restaurants, along with Chait.

By 1990, there were six Louise's Trattorias, and the partners subsequently opened three more -- in Redondo Beach, Huntington Beach and Glendale.

Until 1992, the partners operated the restaurants under several corporations. But at the end of 1992, they rolled all the corporations into one, Louise's Trattoria Inc.

The chain has continued to open new eateries, including a 12,000-square-foot restaurant in Los Feliz, with the help of two private placements totaling $7 million by New York-based Bankers Trust, which received a 20-percent stake in the company.