Chef and Owner Russell Brown created a quiet romantic atmosphere where lovebirds and longtime clients could dine on upscale cuisine away from the bustle of downtown.

Those days have come to an end.

Mr. Brown announced this week he will close Northwoods in less than two weeks after seeing a sharp decline in sales over the past six months. He said fewer customers dined at his restaurant in the weakening economy. Higher food and utility prices also cut into profits, he said.

"Our numbers are down some days 40, 50 percent over last year," said Mr. Brown, looking weary in his empty white tablecloth restaurant on a recent afternoon, a large reservation book spread out before him.

Opened in 1985, the independent restaurant, located in a renovated cedar wood house at the corner of Ridgely and Melvin avenues where servers wore black bow ties, will close its doors for good Aug. 16. Mr. Brown notified his 15-member staff in an "emotional" meeting last week, he said.

"I didn't want to just lock the doors and walk away," he said. "It's like a family. There's a lot of people who have been here for 10-plus years."

The restaurant building has been up for sale for five months, he said.

Mr. Brown is taking his final reservations now.

Northwoods is closing at a time when several local businesses are pinched by the weakening economy and shutting down as a result.

A Starbucks at the $250 million Park Place development and Merritt Athletic Club in Annapolis are slated to close under the shadow of mounting losses.

Boscov's, a department store that opened with fanfare at the Marley Station mall in 2006, will close as the company reorganizes through Chapter 11 bankruptcy.

Meanwhile, increasing competition from new restaurants in town also hurt profits, Mr. Brown said.

The Annapolis mall also is adding to its restaurant mix and the new Annapolis Towne Centre at Parole complex set to open this fall will bring several new chain names to the area, including the Chop House and P.F. Chang's.

The closing is devastating to longtime customers like Dorothy Fedorka, who with her husband David Scuccimarra have been dining at the Northwoods restaurant every other Friday since they became newlyweds in the early 1980s.

The couple, who sponsor Midshipmen and introduced them to fine dining at Northwoods, found out about the closing on Friday.

"I couldn't eat my dinner that night," Ms. Fedorka said. "Both my husband and I sat their speechless for a long time."

Christopher Nelson, the president of St. John's College, has been dining at Northwoods for 17 years. He called the closing a "terrible disappointment" that came as a surprise.

Northwoods is a "place with impeccable understated service, high-quality food, long-term people who cared greatly about Russell and the restaurant," he said.

For Mr. Nelson, Northwoods was a neighborhood restaurant he often walked to for favorite dishes of salmon a la grecque, gazpacho, shrimp appetizer, pork tenderloin and Northwoods' famed Beef Wellington.

"We go there and it's like entering another world where they are going to take care of you," he said.

A former executive chef for the Maryland Inn and 1978 graduate of the Culinary Institute of America in Hyde Park, N.Y., Mr. Brown and former business partner Gonzalo Fernandez opened Northwoods as a niche restaurant serving Mediterranean, Italian and American cuisine.

About nine months after its opening, Mr. Brown's restaurant began offering its highly popular fixed price dinner special that comes with an appetizer, soup or salad along with an entree and dessert.

In the beginning, Northwoods' fixed price dinner menu was $17.95 and only available on Fridays and Saturdays, he said. Eventually, the menu, now priced at $38.95, became an everyday offering.

Mr. Brown said the goal was to offer dinner specials that were appealing and cost-effective. The specials also cut into profits, but Mr. Brown said he would rather serve someone a nice piece of fish than the more costly filet mignon.

Marty Katz, Maryland editor of the Zagat Survey, which gave Northwoods a high 23 score for food in its 2009 edition, said Northwoods was an upscale restaurant that provided fine, carefully prepared classic food, although some thought it was a bit heavy.

The restaurant was part of what made Annapolis a "real city and not just a collection of bars," he said. Annapolis is home to plenty of "breezy youthful" places to eat, but Northwoods was one of the few restaurants that served as a "grown-up serious date night place," he said.

Despite this, some assumed the restaurant was very expensive without knowing its prices were more affordable than other fine dining restaurants in Annapolis, he said.

"The focus was on food and not calling attention on themselves," Mr. Katz said, adding that many restaurants do the opposite.

Mr. Brown also said the restaurant's out-of-the-way location also hurt his ability to attract new customers.

Despite several positive reviews and awards over the past year and opening for lunch at the request of customers, Northwoods continued to see fewer customers coming through the door.

"It was never this bad," he said referring to the weaker economy. "I think even the wealthy people are spending less."

To help save the business, Mr. Brown said he began taking on more hours to cut back on employee costs, shopped at Sam's Club and made sure to turn off the burner to save energy. Mr. Brown said his family has been helping him stay afloat for the past two years, but it got to the point where they couldn't continue supporting him.

He added that his painful and expensive divorce also hurt his ability to finance the business. News of the closing has kept Mr. Brown busy answering constant phone calls and e-mail messages from customers wanting reservations from as far as New Jersey.

On a recent Tuesday afternoon, a woman called Mr. Brown to ask about the restaurant's offerings.

"It's our full menu," Mr. Brown said to the woman. "We'll have our specials as always."

He hopes to find a job at another restaurant in the area.