‘We couldn’t allow it to fail’: How the restaurant ‘flip’ became one of the biggest trends in dining

Just when you thought Neil Perry had finished rearranging his Double Bay restaurants, he goes and opens another one.

In the past year, the restaurateur has relaunched Asian-influenced Song Bird as Italian-focused Gran Torino, lunch-to-dinner bar Next Door as Cafe Margaret, and Bobbie’s jazz den as Bar Torino. Then, last week, Perry announced the Bar Torino basement site would flip again – reopening as Pizzeria Sotto, a relaxed Roman-style pizzeria, on June 3.

“Bar Torino hasn’t found the rhythm we hoped for,” Perry said in a statement. “Rather than hold onto something that isn’t quite landing, now feels like the right time to reset.”

Perry’s track record for reinvention stretches back to 1997, when he launched Star Bar & Grill in Darling Harbour – a pub and nightclub which he later called a “massive, massive mistake” – converting it into pan-Asian diner Wockpool just eight months later. The Bridge Street address that once housed his iconic Rockpool restaurant went through several lives – Rockpool Est 1989, Eleven Bridge and Jade Temple – before closing for good. “So yeah, I’ve done this before,” says Perry. “Changing venues, and evolving them.”

Perry may be the most visible example of the pivot – reopening a venue in the same space under a new name, concept or cuisine – but he is far from the only one.

In the past 12 months, Australian nostalgia-themed bar Baptist Street Rec Club in Redfern has reopened as Italian restaurant Vitelli’s Upstairs; bakery Sol Bread & Wine in North Sydney has become bistro Cafe Loulou and upscale restaurant The Dining Room in The Rocks has relaunched as Sahtein (Lebanese) and Ananas (French).

Restaurants are pivoting because the alternative – closing – is happening at a record rate. According to CreditorWatch, 10.4 per cent of food service businesses closed over the past year, which marked the highest rate of any industry.

Australian restaurants are currently experiencing huge financial strain, which is coming from multiple sources. Lightspeed’s 2026 State of the Hospitality Industry Report found 52 per cent of operators identified rising food and supply costs as a significant challenge, up from 47 per cent the previous year, while half cited increased rent or property costs, up from 38 per cent.

Rising labour costs and energy bills have compounded the pressure further, squeezing restaurant margins so thin that many restaurants have become unsustainable to operate.

“It’s very hard to start a restaurant these days,” says Elvis Abrahanowicz, chef and co-owner of Paisano & Daughters, a Newtown restaurant hub which includes Continental Deli, Mister Grotto, Osteria Mucca and Joe’s Tavern.

“And it’s not just the opening, it’s the running costs. I wish more people knew what it actually took.”

Abrahanowicz knows firsthand. The group’s plant-based diner Flora lasted seven months before relaunching as New York-inspired restaurant Joe’s Tavern last year.

For struggling businesses, operators face a choice: close the doors or change the concept. Increasingly, they are choosing the latter, and doing it sooner than ever before.

Justin Newton, director of House Made Hospitality has navigated that decision more than once. The group’s Promenade restaurant in Bondi reopened as Etheus in 2025, while Baptist Street Rec Club in Redfern relaunched as Vitelli’s Upstairs in February.

In both cases, the decision was made early. The search for a replacement concept for Rec Club started just nine months after it opened, says Newton. “Unfortunately in this day and age, there’s not as much time to let a concept ride,” he says. “We need something to fire pretty quickly.”

Like many operators who have secured sites in competitive dining areas like the Sydney CBD, House Made had signed a long-term lease. “We couldn’t allow it to fail because we’d just go under,” he says.

Perry arrived at the same conclusion with Song Bird. The Cantonese restaurant opened in Double Bay in 2024, earning a Sydney Morning Herald Good Food Guide hat in the first three months of opening. Within a year, it was gone, relaunching as Italian diner Gran Torino. “I made the call pretty quickly. It’s important not to run out of money before you can afford to do these things.”

Reinvention, as it turns out, does not come cheap. Turning Rec Club into Vitelli’s cost House Made Hospitality a six-figure sum.

“It’s no small number,” says Newton. “Even though it’s just paint and a new menu on the surface – there’s a new website, testing, crockery, training, recruitment, new wines, curtains, wallpaper. It all adds up. And you’re doing it from the perspective of a business that’s not performing.”

The financial reality of pivoting means it tends to be the preserve of hospitality groups who have the capital to fund a renovation, and the infrastructure to pull it off quickly. “I do feel quite lucky that we could rummage up the capital from our other businesses that are doing better,” says Newton. “But it’s still not a nice place to be in.”

And yet, even the best-resourced pivot comes with no guarantees. Nothing’s a sure thing, says Perry. “It’s not like oh, if I change, everything’s going to be all right,” he says. “I suspect that 60 or 70 per cent of those that flip are going to end up dying on the vine, in any case.”

For their second act, many operators are gravitating towards what they perceive as safer ground – Italian, Greek and French. But there is no safe choice, says Adam Petta chief executive of Etymon Projects, the group behind The Charles Brasserie in the CBD and North Sydney’s Poetica.

The group has recently flipped several venues, turning luxury live-music bar Tiva into Luna Osteria underneath The Charles, and Sol Bread & Wine into Cafe Loulou in North Sydney. “Popular cuisines might seem safe, but then you risk oversaturation,” he says.

The deeper consequence is a dining scene that is starting to look, feel and taste the same.

“If everyone goes after the same safety net, there’ll be no experimental restaurants,” says Newton. “There’ll be no fine dining.”

Abrahanowicz shares the concern. “I think everyone’s always forgetting about the little guys, like Bar Vincent [in Darlinghurst] – that was a very special restaurant,” he says. “If there’s no support, then we won’t be seeing stuff like that any more and that’s kind of sad.”

Many operators are trying to get ahead of the crisis, getting more involved in the business side of the operations, and watching their numbers closer than ever before.

“In the past, you wouldn’t necessarily be too concerned about the figures, you’d just keep pushing forward,” says Abrahanowicz. “But that’s changing. Now, we’ve got our finger on the pulse a little bit more. This is a passion for us, but it’s also a business.”

Perry agrees that it’s a long-overdue shift. “There’s just a lot more savvy business people in the industry, and the industry is run more and more by a business plan, which it always should have been.”

The perception of pivoting a business is also changing. For a long time, shifting your concept was perceived as a failure.

“Perhaps in the past, there was this sense of just hanging onto an idea or concept,” says Petta. “But now we’re seeing [pivots] happen more often, we’re becoming more comfortable with the idea that it’s okay that something’s not working. It’s not necessarily a failure.”

When Perry flipped from Song Bird to Gran Torino, not a single person lost their job, he says. “It’s actually one of the things I’m most proud of.”

Whatever ends up happening with Pizzeria Sotto, you can be sure of one thing: Perry will have a Plan D.