Longtime Lexington pizza spot closing ‘to stop the bleeding.’ There’s a plan for what’s next
A Lexington pizza restaurant that has been a campus-area mainstay for years is closing its doors after six months of devastating financial losses. The owner blamed fallout from the COVID pandemic.
“We just had to stop the bleeding,” said Ryan Miller, owner of Mellow Mushroom, 503 S. Upper St., known for its funky treehouse look and specialty pizzas like the “Kosmic Karma” and “Gourmet White.”
The popular pizza place, where University of Kentucky students often gathered to watch basketball games, was the first Lexington location of the chain, which originated in Atlanta in 1974.
And it is the last of what at one time was a group of three franchises in Lexington and Louisville. Then-owners Damon Coates and Jason Nase ran into financial difficulties and closed the St. Matthews and Lexington Green spots.
About five years ago, Miller, who had worked for the company for years, became the sole owner of the original location, which opened in 2004.
When is Mellow Mushroom closing?
Now he’s closing it down.
“Sunday will be the last day. We will close at 9 p.m.,” Miller said.
He announced the bad news on the restaurant’s Facebook page Tuesday night.
“It is with a heavy heart that we are announcing that due to the rising costs of labor, food and the dramatic decrease in sales since the Covid pandemic, we will be closing our doors. We will be here so you can get your fix until Sunday night at 9 pm,” the post said. “Thank you so much for the support that was shown through the years. Come see us one last time and as always, Stay Mellow.”
Customers swiftly reacted with sadness. “What the hell guys. Mellow Mushroom and especially the downtown location is like an institution to our family. I can’t put into words how bad this hurts,” one follower said.
Miller said it’s devastating for his family too. “This was our baby,” he said.
Why is the restaurant shutting down now?
It joins the ranks of restaurants that survived the original COVID shutdown only to wither recently under ongoing economic stresses of inflation, retaining employees and bringing customers back. Lexington bakery Gluten Free Miracles announced last week it was closing for similar reasons. Tilty Bob’s, a burger place that featured arcade games, closed in September after six months.
Miller said that they tried “everything we could” to keep Mellow Mushroom going.
“We kept pushing on .. for 20 years, summers were tough but the last week of August things would turn around and we would do good through April,” he said. But not this year: “It just didn’t come back. We’ve been hemorrhaging massively.”
He said that total costs, including increased pay for employees, were up 20% year over year.
“We’ve been losing money for the last six months. This week it was just enough to make payroll and I was scared to go on,” he said. “We’ve let everyone know and I hope they can find positions.”
What’s next for the spot
Miller said he’s hoping to open a new, local American-style restaurant in the location. Without franchise fees and royalties, he thinks the margins would work.
And, yes, there will be pizza on the menu.
“I just bought new pizza ovens a couple of years ago,” he said.
This story was originally published October 26, 2022 at 10:14 AM.
