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Headington Companies Lays Off Hundreds of Employees Across Its Dallas Operations

In shuttering more than a dozen concepts, billionaire Tim Headington’s company reduces its staff, from fitness instructors at Vital to bartenders at Midnight Rambler.

Last weekend, before Dallas banned dining inside of restaurants and drinking at bars, it was business as usual at the Midnight Rambler. The subterranean craft cocktail salon at Tim Headington’s Joule Hotel downtown was open until it wasn’t, which left its staff wondering about next steps. Sources tell D Magazine that leadership left employees mostly in the dark with little communication.

It is one of more than 15 concepts owned and operated by Headington Cos. that will be permanently or temporarily closed as Dallas enacts public health measures aimed at slowing the spread of coronavirus. According to multiple sources, as many as 400 employees have been laid off or furloughed. The news was first reported last week by Central Track.

Employees like Jose Gonzales, the lead bartender at Midnight Rambler, suspected something like this may have been on the horizon. “It would have helped a lot as far as having a little more clear view of what was going on,” he says. “Until somebody tells us anything we still act like everything’s normal and that was the case, they just didn’t budge…they acted like everything was normal which is definitely very ominous. … You kind of start kind of realizing it’s getting closer.”

It is all the more startling considering the years that Headington spent making downtown his own cultural playground, first by turning 1927’s Dallas National Bank Building into the Joule Hotel. From there came restaurants and upscale retail department stores, most notably Forty Five Ten, which Headington purchased in 2015. He extended his reach into the Design District, commissioning a sculpture from artist Daniel Arsham to link the Italian restaurant Sassetta and the upscale sports bar Wheelhouse. He demolished a century old building across from the Joule during a Cowboys game and replaced it with a giant eyeball designed by the Chicago artist Tony Tasset. Every year, the Dallas Art Fair is bookended by a highly programmed bash in the courtyard in front of that sculpture.

Headington was an early bettor on a post-Recession downtown Dallas that had not yet seen an influx of new residents, remodeled hotels, and pricy bars. You could love or hate it, but Headington had a vision for the city. That vision is now gone in a flash. 

The path down to Midnight Rambler. (Photo by Bret Redman)

Headington is hardly alone in its decision. New York–based Union Square Hospitality Group laid off 2,000 workers, or 80 percent of its staff. Farmers Restaurant Group in Washington, D.C. temporarily laid off all of 1,100 hourly workers. The National Restaurant Association estimates that a three-month shutdown of the restaurant industry would result in an loss of 5 million to 7 million jobs. In Texas, 1.4 million jobs are at risk. Of those, an estimated 250,000 jobs are in Dallas County. With companies laying off employees by the hundreds, we’re inching toward that number every day.

Gonzales is one of approximately 20 bar staff—nearly everyone at Midnight Rambler—and is one among the roughly 400 employees who were notified via email that they no longer had jobs.

The email states that the mandatory closures due to the pandemic have put the company “in an unprecedented situation” in which business operations were reduced or closed and therefore they “have no choice but to lay off a significant portion of our workforce.”

The email Headington Companies sent its employees to inform them that they were being laid off as of March 19, 2020.

Commissary is still doing takeout and delivery. The others appear to no longer be operating. The Joule suspended operations Monday morning, multiple sources say. Headington Cos. has not responded to specific questions from D Magazine.

One of the concepts that was shuttered outright was Vital Fitness, the sleek exercise studio that lived below clothing retailer Traffic Los Angeles. The studio announced its closure after 3.5 years in an Instagram post.

“The shutdown in response to COVID-19 has had a greater impact on our small business than we anticipated,” said the studio. “Unfortunately, VITAL Fitness Studio will not re-open after the ban is lifted.”

The Joule’s subterranean fitness studio hosted a wide range of class formats each week–HIIT, boxing, cycling, TRX conditioning, yoga, and more. The studio also frequently hosted outdoor fitness events next to The Eye Ball, the iconic sculpture on the lawn of The Joule.

“Along with retail and dining, downtown Dallas was missing quality wellness options,” former VITAL manager Caitlin Costa once told Yoga Digest. “The Spa [at The Joule] and VITAL filled that wellness void.”

Guests of The Joule were welcome to visit VITAL, but the studio’s loyal clientele was largely Dallas-based young professionals. VITAL employed 13 trainers; all were terminated by Headington. Some, like instructor Bobby Candelas, teach at other fitness studios in Dallas. (Candelas is an instructor at Equinox and MINDBODY.)

“The trainers and staff here are truly good, kind, supportive people,” said one VITAL member on Instagram.

“Thank you for pushing me to be stronger than I believed I was,” said another member, tagging several VITAL instructors in his comment.

The fissures at the company started earlier this year.

Employees at CBD Provisions say the professional environment had been going downhill for months. “The writing had been on the wall for a while,” says a former CBD worker who didn’t want to be named. The restaurant was often low of silverware and glassware. The employee says there was little priority to replenish stocks.

Insurance benefits had shifted to a less-generous policy and the paid time off rules made it “effectively impossible” to use, this individual said. The company reconfigured its PTO policy to allow fewer hours and required more hours of work to earn that time off.

Sam Kumpe, who was a bartender at CBD until March 19, says she used fewer than 30 hours over the three years she’s been with the company. She met her husband at work and their manager married the two. ”I think I’m in shock. It’s not that I just lost my job but I lost my industry,” says Kumpe.

She recently wrote a letter to Tim Headington expressing how staff was told there’s no money for insurance or for hiring new managers while the company was opening a new restaurant. Kumpe was formally reprimanded for that letter and had to “sign a document saying I was disrespectful.”

Despite formal complaints from CBD employees, a manager continued to come into work with a heavy cough; he worked with a woman who is eight months pregnant and refused to take a sick day, they say. Employees also say recent Joule guests inside the restaurant were visiting medical professionals who came to Dallas to help with the outbreak. The employees who spoke to D Magazine say they’re all nervous and have been isolated at home since the layoffs.

Meanwhile, Gonzales and his coworkers did have other projects and gigs, but, he says, “We definitely depended on tips and we depended on the checks. I know about three out of the 10 that I have talked to have applied for unemployment through Texas Workforce Commission. I haven’t yet but the one time I tried the TWC [website] shut down.”

Across the street, the future of luxury retailer Forty Five Ten isn’t looking promising, either.

The brand was established in 2000 by merchandiser Brian Bolke in the tony Highland Park Village shopping center. The iconic downtown Dallas flagship location was built in 2014 after Headington bought the company. The 37,000-square-foot store is known for its distinct editorial vision, helmed by President and Chief Creative Officer Kristen Cole, and its eclectic inventory of established lines, lesser-known brands, and local designers.

Earlier this week, Headington Group emailed 38 employees at Dallas’ Forty Five Ten locations to let them know they’d been terminated.

An individual at Forty Five Ten who wished to remain anonymous for fear of reprisal said the 38 terminations included a variety of roles: sales associates, buyers, managers, loss prevention officers, and more. This accounts for roughly half of all Dallas employees, estimates the source.

Forty Five Ten’s staff wasn’t blindsided by the news–only by the swift and impersonal delivery via email. “Corporate has made it clear that Forty Five Ten has never been profitable,” says the source. The brand made a big splash late last year by opening a new location in New York City’s Hudson Yards development.

The termination email did not offer any guidance other than contact information for the state’s unemployment division. “They could have offered guidance, an explanation, any potential future opportunities… and of course, a severance package,” says the source. “It would have been nice to have received some transparency [from Headington], especially during these unprecedented times.”

According to the source, Forty Five Ten finally closed its downtown storefront last week in response to Texas’ developing quarantine guidelines. Remaining sales associates were told they would receive furlough, but weren’t told how long furlough will last, and won’t receive any payment or stipend in the interim. It’s unclear whether the downtown location will reopen.

“[It’s] disheartening overall to company culture [for remaining employees] because it’s still unknown if Forty Five Ten will succeed in the future,” says the source.

It is also unclear how Forty Five Ten’s other locations–Aspen, Napa, and New York City–will be affected. For now, the store’s online platform is up and running.

Forty Five Ten has not responded to questions from D Magazine. Considering the scale of his operation, Headington’s abrupt exit from downtown Dallas will be felt. According to Forbes, the oilman is worth $1.2 billion.

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