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Mon 4th Mar 2013 - Drake & Morgan, Town & Country and Turtle Bay

Story of the day:

Industry sources suggest Drake & Morgan withdrawn from sale: Industry sources suggest Drake & Morgan, the London bar operator owned by Imbiba Partnership and led by Jillian MacLean, has been withdrawn from sale. The move is thought to be a result of price expectations for the business not being met. A sale process had been overseen by PricewaterhouseCoopers with a price tag on the business of around £20 million. London bar and restaurant operator Novus was one operator interested in buying the company but it is thought that the company withdrew after deciding to cap its offer at £17m. Private equity groups Bowmark and LDC were thought to have been the final bidders left in the process. Drake & Morgan owners are now expected to continue the steady expansion of the business with two new sites scheduled to open in the next few months – one in Holborn and Happenstance in St Paul’s. In its most recent accounts, Drake & Morgan reported it has “exceeded expectations” with a 44.6% increase in Ebitda to £2,071,511 for the year to 31 March, 2012. The company, founded in 2007, saw turnover jump to £16,400,298 from £11,362,509 the year before, which placed the company just outside the top 100 sector companies in turnover terms in the Propel Info Sector Turnover and Profits Blue Book. The company stated: “The directors are very pleased with the results for the year which included the successful opening of The Drift. Turnover and Ebitda increased by 44.3% and 44.6 % respectively, which exceeded expectations.” Imbiba declined to comment on the situation.

Industry news:

ALMR – time to lobby your MP on VAT: The Association of Licensed Multiple Retailer has urged its members to lobby their local MP on reducing VAT in the sector. It told members: “You need to encourage your MP to support the hospitality industry by asking them to sign a Parliamentary Early Day Motion 890 calling for this (reduction in VAT). If we attract over 100 signatures, then a political debate is likely to be held on this important measure. VAT reductions for the hospitality industry have been implemented in 13 EU countries, driving spend and generating jobs.”

USA Today hails Yummy Pub Company’s Gorringe Park pub: Influential newspaper USA Today has hailed Yummy Pub’s reinvention of the pub at its Gorringe Park venue, opened last year in partnership with Charles Wells. The newspaper stated: “At the Gorringe Park pub, on an otherwise unglamorous high street in Tooting in south London, new owners have completely refurbished a former dingy local to include a “boutique movie room” where they show feature films in the evenings and in the daytime for parents and children. There is also an upstairs restaurant and a private dining room, while the ground floor remains a pub in the more traditional sense.” General manager Ed Harper told the newspaper: “It’s what a local pub should be, relaxed and friendly, like a home away from home but able to respond to the ever changing needs of the market.”

Jack Straw – time to abandon the duty escalator: Jack Straw MP has written an opinion piece in his local newspaper in Lancashire in which he has argued for the abandonment of the beer duty escalator. He wrote: ”Whatever the arguments for the escalator back in 2008, they no longer hold today. The Budget in three weeks’ time is a good opportunity for the Chancellor to abandon the escalator – and not increase the duty. He may not even lose money by this, if it helps to stem the decline in pub sales of beer.”

Peach survey shows key priorities in 2013: Peach’s annual Business Leaders’ Survey has shown company bosses across the eating and drinking out sector will be focusing on the customer experience, developing their teams and improving value in the coming year. They see eating habits being driven by a growth in ‘casualisation’ and flexibility—with all-day concepts being the ones to watch and emulate. New openings will continue to drive expansion - with technology, and how to harness it effectively, a key operational challenge. When it comes to outside pressures, food costs are top of the list of concerns. Now in its fourth year, Peach’s Business Leaders’ Survey is the industry’s most accurate barometer of boardroom and entrepreneurial sentiment. Over 120 senior executives, mainly chief executives, from major corporations to small start-ups took part in the research conducted during January.

Beer duty freeze would save 5,000 jobs: The British Beer and Pub Association has argued that a freeze on beer duty would save 5,000 jobs and increase tax revenues by £5m. The figures are based on research by Oxford Economics. Chief executive Brigid Simmonds said: “A duty freeze would raise revenues, protect jobs and help one of our greatest national assets – our much-loved pubs.”

David Davis MP – minimum pricing is the wrong policy: David Davis MP has launched an attack on minimum pricing, calling it the ‘wrong policy at the wrong time’. Writing in The Sun, he states: “Binge-drinking will not be stopped with a one-size-fits-all, nanny state approach. Minimum pricing is the wrong policy at the wrong time. Seeing the warts-and-all media coverage of drunken nights, you could be forgiven for thinking that alcohol consumption in Britain is rocketing. In fact, the opposite is true. Men and women of every age group are drinking less. In 2010, the average British adult drank a fifth less than in 2005. That is a far bigger drop in drinking than the government expect will be caused by minimum pricing. In fact, they admit people will keep drinking less even without a minimum price. So what is the point of it? Official figures say alcohol-related harm continues to rise. We should not ignore that simply because overall we drink less than we used to. It suggests Britain has a “drinking divide”. On one side, there is the majority who drink sensibly. On the other there is the small minority who drink too heavily, too regularly. We must tackle that trend.”

The Daily Mail – minimum pricing is ‘dead’: Sources have told The Daily Mail that David Cameron’s plan for minimum pricing appear “dead in the water” because of opposition from both Conservative and Lib Dem ministers. Economists claimed that minimum pricing will cost the average family £100 a year. One minister told The Daily Mail: “It would be political suicide and will have to be abandoned.”

Raymond Blanc to back Boris Johnson’s apprenticeships scheme: Raymond Blanc is to back London Mayor Boris Johnson’s plan to create 250,000 new apprentices in London this week by pledging to recruit a cadre of young people, The Sunday Telegraph has reported. He said: “The food services industry is very important. In London it directly employs 300,000 people and has a direct income of £17bn a year. In the past, we got it wrong. We devalued service. We promoted academia and vocational work was undervalued and unimportant. But the days when the service industry was an outcast are changing. It’s now an industry that takes pride in itself.” 

Company news:

Young’s partners Meantime to install beer tanks: London pub retailer Young’s, which sold its brewing interests seven years ago, is to partner Greenwich-based Meantime to install tanks in three of its pubs to dispense “brewery fresh” beer, according to The Times. The three pubs chosen for the trial are The Plough and Windmill pubs in Clapham and The Grove in Balham – it apes the tankovna, or tank pubs of Prague. The Times reports that the three pubs will each have five hectolitre tanks filled with Meantime London Lager, which will be unpasteurised, unfiltered and naturally carbonated with yeast. The 4.5% abv beer does not come into contact with air from the moment it leaves the brewery ensuring is flavour its optimised. Young’s chief executive Stephen Goodyear said: “We already sell some of Meantime’s other beers and it’s nice to see something a little different. These tanks will be visible from the bar so it creates a bit of theatre. Not all our pubs will be suitable for this, but we’ll try it and if it works we’ll do some more.” Meantime, which is headed by former Miller UK boss Nick Miller, is funding the tanks. 

Harris + Hoole looking for six sites in the City of London: Coffee chain Harris + Hoole, which is 49% owned by Tesco, has hired property agent Morgan Williams to find six sites in the City of London. The first venue is set to open at 164 London Wall and Morgan Williams is searching for further sites. Harris + Hoole has 12 sites in the south east currently.

JD Wetherspoon gets go ahead in Diss, Norfolk; withdraws hotel plan in Pwllheli: JD Wetherspoon has had plans to build a new site in Diss, Norfok, (population: 6,742) given unanimous approval by the planning committee. South Norfolk Council’s planning committee praised the “excellent design” and “spectacular site” overlooking the Mere, describing it as a “huge asset” to the town. Joe Darrell, landowner of King’s Head Yard off Mere Street, where the site will be built, secured planning permission for the site in 2008, but resubmitted plans for a slightly bigger development including a mezzanine floor. Meanwhile, Wetherspoon has decided against developing a hotel at a site in Pwllheli, the main market town of the Llyn Peninsula and the birthplace of Plaid Cymru in Wales (population: 3,861). In November, JD Wetherspoon lodged a planning application that would transform the vacant Bon Marche building on Station Square, Pwllheli, into a pub, restaurant and 14 bedroom hotel. At the time, the proposals included an eating and drinking establishment to occupy the basement, ground and first floors, with the upper floors transformed into the new rooms. A spokesman said: “The company did put in planning to develop the above floors into a hotel, but has now decided to concentrate on the pub and not continue with the hotel plan.”

Greene King invests £1m premiumising Old English Inns site: Greene King has invested £1m on premiumising The Saracen’s Head in Towcester. The hotel has enjoyed a complete renovation “from top to bottom” improving all the bedrooms, the reception area, function rooms and the bar. The changes mean every bedroom is different and a feature room includes chandeliers. The hotel is famed for featuring in Charles Dickens’ first novel The Pickwick Papers, which he is also thought to have penned some of during his stay.

Town & Country Inns opens new “farm to fork” concept: Town & Country Inns, the operator of Apres, opened its new “farm to fork” concept Fleet Street Kitchen in Birmingham’s Summerow development on Friday. The concept features a Barbacoa-style open-fire grill and offers 120 covers. Town & Country Inns chairman Keith Williams said the company had put a lot of research into the new brand and ‘hoped it could travel’. The company is considering a second opening for Fleet Street Kitchen in a development in Cheltenham where it already operates an Apres venue.

Harvester launches £10 for two takeaways offer: Harvester, the 205-strong brand owned by Mitchells & Butlers, has launched a two takeaways for £10 offer throughout March. The offer is available every day until Sunday 31 March and entitles the purchase of up to six takeaway meals. Selected menu items, such as the full rack of barbecue ribs, are subject to a £2.50 supplement. 

Prezzo opens first Northern Ireland site: Restaurant group Prezzo opens its first restaurant in Northern Ireland last Friday. The restaurant is within the restaurant quarter of Victoria Square Shopping Centre in Belfast and Prezzo has invested more than £550,000 developing the restaurant on the site of a former La Tasca outlet The restaurant has seating for 140 diners - 80 in the main restaurant and an additional 60 in the mall seating area. Prezzo chief executive Jonathan Kaye, said: “We are delighted to be opening our first restaurant in Northern Ireland. We are confident that it will prove popular and be an asset to the social scene in Belfast.”

Turtle Bay to open fourth site in Bristol in April: Caribbean restaurant concept Turtle Bay is opening its fourth restaurant in Bristol’s Broad Quay in April. The brand – which has three existing branches in Nottingham, Milton Keynes and Southampton – was co-founded by Ajith Jaya-Wickrema, one of the pair behind chain Las Iguanas and a non-executive director of both Tampopo and Aqua Italia. The first branch was the Milton Keynes restaurant, which opened at the end of 2010.

De Giorgis takes pizza restaurant to the next level: Restaurateurs Aldo, Joseph and Cristina De Giorgi have invested £100,000 in the installation of a new open kitchen at Pasqualino’s Bar Pizzeria on Market Street, to celebrate its first anniversary. They have introduced a key feature to the new Pasqualino’s kitchen - a Woodstone oven, which weighs four tonnes and reaches a temperature of 900˚f , which they claim will produce ‘the best pizzas in Newcastle’. This high temperature allows the intense blast cooking that locks in aroma and moisture, giving a soft but crisp easily digested pizza crust. The De Giorgi siblings are well-known in the Newcastle dining scene after creating some of the city’s most popular bars and restaurants including Paradiso, Popolo, Intermezzo, Alvinos, Secco, Don Vito’s and 9Bar Coffee.

TGI Friday’s tops strong hospitality sector showing in The Sunday Times Best Companies to work for list: TGI Friday’s is celebrating a double win in the ‘Sunday Times Best Places to Work’ 2013 awards. The company, which had already received an ‘extraordinary’ rating from Best Companies Accreditation 2013 , has placed third overall in the annual listings. This has made it the top-ranking restaurant brand in the UK, and Friday’s also topped the table in the ‘Best Role Models’ rankings. In the voting process, employees ranked Friday’s especially high for My Team (85%), My Manager (82%) and for Leadership (83%). The scores in My Team and My Manager were beaten by just one other firm. Unusually for the restaurant industry, staff feel their jobs are secure at Friday’s, giving the company an 86% positive score on this point, beating every other firm on The Sunday Times Best Companies to Work For 2013 list. Workers also say they feel a strong sense of “family” in their teams (87%), and that working with their colleagues gives them a real “buzz” (84%). Both of these scores are again beaten by just one other company. Other companies to feature in The Sunday Times list were Hawksmoor (5th), Living Ventures (9th), Inventive Leisure (25th), Busaba Eathai (54th), Botanic Inns (78th), Las Iguanas (79th) and Byron (92nd). In the Top 25 Big Companies list were: McDonald’s (6th) and Whitbread (10th).

Inc Group fined £20,000 after serious food hygiene breaches: Inc Group, the nine-strong Greenwich pub and restaurant operator led by Frank Dowling, has been fined a total of almost £20,000 after inspectors found mouse droppings in the kitchen and raw sewage in sinks at one of its sites. Environmental health officers for Greenwich Council spotted the “serious breaches of food hygiene” at the Trafalgar Tavern during a routine visit on February 16, 2012. At a hearing at Greenwich Magistrates Court last month, Greenwich Inc Limited was ordered to pay £19,190.52, comprising of a £10,500 fine, £8,675.52 in costs and a £15 victim surcharge. The council team discovered a serious mouse infestation, including droppings in the main kitchen, shelves and in a store room, as well as raw sewage in sinks that had been covered by cling film. Hot water and hand washing facilities could not be accessed. A temporary closure order was imposed, and the kitchen re-opened on February 20, 2012, following a deep-clean.

Harry Ramsden’s to expand Bournemouth restaurant: The Harry Ramsden site in Bournemouth is to be expanded. Mike Glancy, operations director, said: “We are due to embark upon phase two of a massive investment in the restaurant within the next couple of months, which will further increase capacity from 230 to 350 covers. With that in mind, we want to ensure that our service standards remain as high as ever. In order to achieve this, the recruitment of 25% more staff is absolutely vital.”

Vegan café operator raises £250,000 through crowd funding to launch organic crisps: Dominik Schnell and Bella Willink, who operate a vegan café near Camden market, has raised £250,000 through a crowd funding website Crowdcube to develop a range of organic crisps. Their business, Inspiral, makes organic crisps from kale.

Luminar launches new training programme: Nightclub operator Luminar has shaken up its training offer with the launch of its new ‘Train the Trainer’ programme, designed to serve up a first class experience for customers. Developed in partnership with Diageo, the training programme which is currently being rolled out across the estate will focus on strengthening a wide range of bartender skills from the perfect serve to cocktail making. Each of Luminar’s 56 nightclubs will nominate a Bar Trainer for the first round of training, which will then be repeated every quarter. The next topic will focus on upselling with a regular programme in place to ensure standards are maintained. Phil Cooke, head of procurement for Luminar, said: “Luminar has already embraced the growing trend of e-learning which is a fantastic tool, but there’s no substitute for hands on training for bar staff, conducted in a real life bar in one of our venues.”

Taco Bell tests positive for horse meat: Restaurant chain Taco Bell, which has three sites in the UK, has confirmed that some samples of its ground beef have tested positive for horse meat. The finding was revealed by the Food Standards Agency (FSA) following a third round of testing of beef products across the country, amid fears of horse meat contamination. In a statement on its website, Taco Bell, which has sites in Lakeside shopping centre in Essex, Eastgate shopping centre in Essex, and Manchester’s Arndale centre said: “Food quality is our highest priority, and when the news of mislabelled beef products surfaced we voluntarily carried out tests on the ground beef supplied to our three Taco Bell restaurants in the UK. Based on that testing, we were very disappointed to learn that some batches of ground beef supplied to us from one supplier in Europe tested positive for horse meat.”

Patisserie Valerie opens seven transport hub sites in a day; looks at opening concessions in 2013: Patisserie Valerie, which has expanded by more than 50% in the past two years, opened seven sites in a single day on Friday as part of a major push into transport hub locations. The brand opened in former Paul sites at a host of London train stations – Marylebone, Waterloo, Victoria, Euston, Paddington and two sites at St Pancras. These latest openings follow success at the company’s first train station site at King’s Cross. Chief executive Paul May has told Propel: “Considering (King’s Cross) is a small area, just 354 square foot, it’s producing a level of sales equivalent to a 1,500 square foot site. That’s because we’re doing a lot of takeaway, although there is some external seating available. Transport hubs have been something we’ve wanted to get into for some time. Our operations director came from a coffee chain and had good connections, which helped us get into Network Rail. (Jon Hassall joined Patisserie Valerie last October from AMT Coffee). Network Rail is challenging. Commercial specifications and negotiations are long-winded and it’s hard to get a decent length of term, but commercially we are happy and Network Rail is delighted with our performance at King’s Cross.” May has also stated that the company will explore opening concessions this year. He told Propel: “A lot of retailers are looking at their space and thinking how they can make it generate income, and we’ve been talking to some fairly large companies about the possibility of opening concessions in their stores.” While May wouldn’t be drawn into naming names or style of operator, he added: “We’re talking substantial stores with hundreds of units.” Patisserie Holdings, operator of the Patisserie Valerie, Druckers and Baker & Spice chains, has opened new sites in Southend, Portsmouth and Colchester over the past two months. There is a planned opening in Derby Westfield this month, which will add to an estate than has now passed the one hundred mark. Patisserie Valerie was acquired by private equity firm Risk Capital Partners, led by Luke Johnson, in 2006 when it had eight sites in central London, for £6m. The company had been founded in 1926 and had “very consistent and very high” turnover on acquisition, May has reported. May further stated that there was a “great opportunity to build a roll-out” of the brand across London and into the provinces. The company subsequently acquired Druckers Vienna Patisserie in 2007 and Baker & Spice in 2009 as it moved towards the goal of becoming the UK’s leading chain of café bakeries. Baker & Spice was bought out of administration and, reports May, produced virtually full return on capital invested in the first year of ownership. In its most recent financial year to September 2012, the Patisserie Holdings saw turnover increase 22% to £49.5m while pre-tax profits rose 28% to £5.9m in the same period. Patisserie Valerie is planning to add more than 20 branches this year. May has stated: “Everybody likes to indulge in a treat, which is essentially what Patisserie Valerie is all about, along with the excellent service we offer with all of the products we provide.” Luke Johnson and Risk Capital Partners own 83% of the business with management owning the remaining 17%. When he bought Patisserie Valerie in 2006, Johnson said: “We have significant experience of rolling out successful food and drink concepts, including PizzaExpress, Strada and Giraffe. Patisserie Valerie is a much-loved institution with tremendous heritage. We are confident there are many upscale locations across Britain’s cities that would love the authentic pastries, cakes and savouries supplied by Patisserie Valerie.” The company is now eyeing an estate of more than 200 sites across the UK and is also considering the development of an evening offer at Patisserie Valerie.

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