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Barfly spreads its wings with expansion plans

Company hopes to double its number of bars — and revenue — by end of the year.

January 23, 2015
| By Pat Evans |
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Barfly Ventures entered 2014 with five bars.

By the end of 2015, Mark Sellers and his company will have doubled the number of bars — and its revenue, led by the world-renowned HopCat beer bar chain.

With so many craft breweries in the market and more planning to open every day, Sellers said this is not a great time to open a brewery. He said a better plan is to open beer bars to grow the places where craft beer is served.

Since starting the original HopCat on Ionia Avenue in 2008, Barfly founded Stella’s Lounge, took over ownership of McFadden’s Restaurant & Saloon and bought Grand Rapids Brewing Co., redeveloping and relocating the brewery downtown.

In 2013, HopCat East Lansing opened, thanks to Sellers’ connection to the city and Michigan State University. With a successful first couple of months in East Lansing, which saw HopCat outpace most of the other entities, Sellers said it was near the end of 2013 when he decided to expand the brand.

“We spent the entire year preparing for the expansion,” Sellers said of 2014. “We redid a lot of the internal workings. We hired a lot of new people in advance of the growth.”

Included in the new hiring were a managing partner, project manager, CFO and human resources director, and “beefing up” the graphics department.

“It was hiring those infrastructure people to build the company,” Sellers said.

Barfly also raised $4.5 million in equity from investors to prepare for the planned growth spurt.

By December, HopCat-Broad Ripple in Indianapolis and HopCat Detroit were opened, following capital investments of $2.8 million and $4.4 million, respectively. Despite just three months of business for Broad Ripple and approximately two weeks for HopCat Detroit, Barfly Ventures’ revenue was up 51 percent in 2014.

Sellers said revenue is expected to be up 100 percent by the end of 2015, which will include full years for both Detroit and Broad Ripple and several new openings. HopCat Ann Arbor is scheduled to open this month and HopCat Madison is slated for a May opening in Wisconsin.

Sellers said there’s at least one more HopCat in the works for 2015, likely slated for opening in August.

This year, Sellers said the company is expecting HopCat development to cost approximately $13 million, averaging just more than $3 million per project. The strategy for new HopCats hasn’t changed, either; he hopes to open between 12 and 15 locations throughout the Midwest in college-type cities.

All told, the company is expecting $41 million in sales this year, according to Sellers.

The rapid growth of the company has allowed Barfly to promote employees from within and relocate some to better positions at other locations. With the new locations, Barfly will have approximately 1,000 employees, according to Sellers.

“Our employees are really excited about it,” he said.

Sellers also will open The Shrunken Head, a tiki-themed barbeque restaurant at 59 Commerce Ave. next to Stella’s. The restaurant is essentially a pet project of Sellers.

The expected investment is approximately $1.5 million and likely will create 75 jobs.

Sellers hired “Bamboo Ben,” a famous tiki-bar designer from Huntington Beach, Calif., to design the bar’s interior.

“We’re going to have a lot of fun with this place,” said Sellers in September when the project was announced. “I’m a barbecue fanatic and have also visited many tiki bars all over the United States and elsewhere. I think it will be fun to marry the two concepts into one crazy place. There will be a lot of original artwork, a retro look and some other fun surprises for people.”

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