Next Stop Go

HOW 25-YEAR-OLD LUKE HOLDEN OPENED A LOBSTER RESTAURANT IN THE MIDDLE OF A RECESSION AND WHAT HE’S DOING TO KEEP HIS BUSINESS AFLOAT .

By Dean Stattmann

It’s 2 p.m. on a frigid October day in New York’s East Village, and beneath a grey sky, raindrops race down the windows of empty storefronts as the heavy rain pounds the vacant, glassy street.

But outside one restaurant on East 7^th St., a line has formed. At the end, teetering on the curb, a middle-aged woman stands on tip toes to see how long there is still to go. There are five people in front of her, and at least 10 more inside. Nearer the door, a young couple is chatting excitedly beneath one of many black umbrellas serving as shelter from the relentless downpour. They are waiting to sample the latest cuisine to lend itself to the street’s diverse catalog of boutique restaurants, Luke’s Lobster.

Inside, there is nowhere to move. The seating area – eight barstools and a narrow wooden bar hugging a corner of the 250-square-foot restaurant – is packed, and those without seats stand wherever they can, bumping elbows and clutching lobster rolls like hot dogs.

It’s been just over a month since the October 1 opening of Luke’s Lobster, the brainchild of 25-year-old Mainer Luke Holden, and despite a looming recession that has caused many to clamp down on spending, the line outside remains a near-permanent fixture.

Since the recession began taking form in December 2007 (a date released by the National Bureau of Economic Research), consumer confidence is down 44 percent, reports The Conference Board, a global market analysis organization. But when it came time to open his doors, Holden had other worries.  “I was concerned less about the economic side and more about the seasonal aspect of it,” he says. “Lobsters are a summer food usually, whether that is a function of people not being able to get them year-round or just not associating lobster with the colder months.”

But one glance out the window dispels that concern entirely, and a slew of positive reviews, including praise from The New York Times and Time Out New York, is fast displacing any doubts Holden may have had initially. Before wrapping up its first month of business, Luke’s Lobster was over 95 reviews deep on Yelp.com, a popular review website visited by 25 million people per month, with 34 five-star reviews and 95 percent of users awarding the lobster shack three stars or more. The restaurant was also recently listed among national food blog Eater’s “Top Ten Seafood Additions of 2009.”

Born and raised along the salty shores of Cape Elizabeth, ME, Holden was introduced to the art of lobstering as a young boy by his father, Jeff, a co-owner of Luke’s Lobster and president and founder of Maine-based seafood supplier Portland Shellfish. By the time he left home in 2003 to study finance and management at Georgetown University, Holden had established himself as a tenacious and gifted lobsterman, utilizing his time in high school shop class to build a functional 21-foot skiff that he used the following summer to haul in 200 lobster traps a day with his younger brother Mike.

Success seems to have followed Holden across state lines since leaving his native Maine for D.C., and eventually settling in New York in 2007, but as his business model will reveal, there’s a catch. “Portland Shellfish sells a lot of stuff to the city, but they go through a distributor, and that distributor holds on to the stuff for a day or two and then they ship it out to the restaurants,” explains Holden. “The stuff we’re serving today was literally picked yesterday morning, between 6 a.m. and 11 a.m..” By cutting out the middle man, Holden’s lobsters make their way from the Maine ocean floor to the East Village in just 24 hours, and with a much more palatable price tag.

“The average lobster roll in the city is packed with fillers, like mayonnaise and celery, and goes for anywhere from $25 to $30 a piece,” says Holden, who sells his rolls for $14 each. “We knew we could come here and offer the highest quality product at the best price.”

“They’re still making plenty of money off us, but there aren’t those guys in between,” says general manager Ben Conniff, a Yale graduate who Holden recruited through Craigslist. “It knocks a bunch of money off our costs, and it also gives us the traceability that other places don’t have.” At Luke’s, customers are told exactly where their meal came from, right down to the harbor and time of catch.
An investment banker by day, Holden attributes the remainder of his success to smart marketing, and has gained valuable exposure from using popular social networking sites like Facebook and Twitter to consolidate the restaurant’s positive press and advertise deals like a 25 percent discount for New York Marathon participants. “That’s all free marketing,” he says. “It allows you to give the consumer the keys and let them drive.” He’s also learning how to increase incentive among his steadily growing returning customer base. “We’ve got these cards called Lobster Mobster cards, where if you buy ten lobster rolls you get one free,” he explains. “We’re starting to see those cards fill up, so it’s a good measure.”

Also on the menu are shrimp rolls, crab claws and crab rolls, complemented by authentic Maine root drinks, and when Holden gets his liquor license this spring, he will also offer a selection of Maine microbrew beers.

Luke’s Lobster is located at 93 E 7^th St., between 1^st Ave. and Ave. A.