2 Leo's Mexican Restaurants closed in El Paso, a sign of changing restaurant industry

Mike Mitchell, front, and Willie Terrazas, Jr., stood in the Leo's Mexican Restaurant at 1921 Zaragoza in October 2012, about six months after Mitchell bought it and another Leo's at 9420 Montana from a group of El Paso investors. Mitchell had a licensing agreement with Terrazas to operate the restaurants as Leo's. Mitchell closed the restaurants in June because they were losing money. Delicias del Mar, part of a Las Cruces-based chain, moved into the Zaragoza location. (El Paso Times File Photos)

El Paso's 68-year-old Leo's Mexican Restaurant chain, which only a year ago had six locations, is down to three after two affiliated restaurants closed during the summer.

The closings are among the many restaurants that fail each year in El Paso, and among thousands of restaurants that close each year across the country. But these are notable because of Leo's long run, and because they were owned and operated by long-time garment manufacturing executive Mike Mitchell.

He spent about eight years as president of Farah Inc., the iconic El Paso garment manufacturer and its successor company, Savane International. He worked almost 30 years in the garment manufacturing industry, most of those as a top executive, before jumping into the restaurant business by buying the two licensed Leo's locations in March 2012.

"It's very difficult to make money in the restaurant business. I was working seven days a week, and always there," Mitchell, 61, said in a recent interview. "I learned a lot about the restaurant business. I was never in business by myself" before the restaurant ventures.

"I am not sorry I picked the restaurant business. I am sorry I was not able to make it work, especially with Leo's name on it," Mitchell said.

Christin Fernandez, a spokeswoman for the National Restaurant Association in Washington, D.C., said in a typical year, about 50,000 restaurants will close nationwide, but at the same time, about 60,000 restaurants will open.

"These closings aren't all failures, as some are just the owners shutting one location down to open another," Fernandez said. "But it does illustrate the churn in the industry on a regular basis."

The company Mitchell formed to operate the restaurants filed for Chapter 7 liquidation bankruptcy at the end of July. Court documents show that Mitchell's two Leo's locations, 1921 Zaragoza and 9420 Montana, had annual sales of $1.36 million in 2013 and $1.24 million in 2012. But those sales were not enough to offset costs, Mitchell said.

Mitchell blamed the failure of the Leo's at Zaragoza and Joe Battle on the far East Side on the two-year construction of two overpasses near the restaurant, which, he said in a recent interview, made it difficult for customers to get there.

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2 Leo's Mexican Restaurants closed in El Paso, a sign of changing restaurant industry