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Morning Briefing Strap Line
Thu 15th Aug 2013 - Convivial, Greene King, Hakkasan, Punch, and TGI Friday

Story of the day:

Gastro-operator lines up eighth site – first Punch pub: Whiting & Hammond, the gastro-operator led by Brian Whiting, is set to acquire its eighth pub, a Punch Taverns site in Kent that will see an estimated £700,000 co-investment. The company hopes to re-open The King’s Head in Bessels Green, Sevenoaks in early December after an extension to the pub and a refurbishment. Whiting, a former Brunning & Price director whose company is celebrating its tenth anniversary this weekend, said: “Punch has really pulled out the stops to recruit us to the estate. I don’t think Punch will get much change out of £500,000 and we’ll be spending around £200,000. It’s a beautiful site opposite the village green, right in our heartland.” Whiting & Hammond’s seven sites currently have a turnover of circa £8.8m. Whiting added: “July like-for-like sales were up 10% – summer has been great although we were coming out of the toughest winter in the ten years of the business.” The Punch site will be Whiting & Hammond’s first since it acquired Stanmer House in December 2011, a destination venue on the outskirts of Brighton that proved to be a considerable challenge. “Stanmer has been a test for us but I’ve always thought it had the potential to be a premier site for us because it has so much to offer,” said Whiting. The much-improved trading at Stanmer House means that Whiting & Hammond has an unbroken record of turning closed or bankrupt sites into top performing gastro-pubs. “I foresee our ninth site coming along a lot quicker than the eighth,” said Whiting. “We’re looking forward to the next ten years where we’d like to grow the company and establish ourselves as the premier food pub operator in the country.” Senior executives at Punch are hosting a networking evening for “ambitious and innovative” operators interested in future partnerships on Wednesday, 4 September at The Cock & Lion, 62 Wigmore Street, London starting at 5.30pm. E-mail Vicky Brown on to attend.

Industry news:

Simon French – food cost pressures are increasing: Panmure Gordon leisure analyst Simon French has warned that food inflation has stepped up. He said: “Yesterday’s inflation data showed a further acceleration in food cost inflation to 5.0% – it’s highest since January 2012 – and a moderation in menu price inflation to 2.6%, putting further pressure on gross margins. We estimate theoretical gross margins have fallen 14.3 percentage points in the last six and a half years.” David Read, chief executive of Prestige Purchasing, said that operators could see some relief from food cost inflation at the end of this year. He told Propel: “There is a long-term upward trend in food inflation, where we expect to see food pricing outstrip the rest of the economy, and in 2013 we are seeing the first real signs of this. We believe the current high level will continue, though the inflation number at the end of the year will appear to be softening, due to the huge jump in prices we experienced in the winter of 2012. It’s not all doom and gloom though. In our experience, many operators are sub-optimal on their food supply chains. The days of “three bids” buying are long gone, and the best businesses are now investing in clever strategies to maximise direct sourcing and distribution.” French added that consumer confidence reached a three-year high in July but household disposable income remains only broadly flat year-on-year. “We think the rise in consumer confidence is being underpinned by the rapid rise in house prices, which were +3.1% year-on-year in June, according to the Office of National Statistics,” he said.

Red Bull tells Redwell Brewery its name is too similar: Energy drink maker Red Bull has written to Redwell Brewing, based in Norwich, requesting it to withdraw its trademark application because its name is too similar and would confuse consumers. Red Bull’s brand enforcement manager Hansjorg Jeserznik told the brewer: “The term ‘well’ is merely descriptive and therefore of no distinctive character at all. Furthermore the term ‘bull’ and the term ‘well’ share the same ending and just differ in two letters. The ending ‘ll’ is identical and therefore the terms Red Bull and Redwell are confusingly similar from a visual as well from a phonetical point of view.” Redwell brewery director Benjamin Thompson said: “It’s quite scary that they could force us to change our name. We called ourselves Redwell after Redwell Street in Norwich. It was not just some random name we picked out of thin air.”

Entrepreneur becomes UK’s youngest nightclub owner aged 16: A 16 year-old entrepreneur, Alfie Best, has become the UK’s youngest nightclub owner buying Chelsea’s in Hoddesdon, Herts, after organising parties there for the travelling community. Best appeared in Big Fat Gypsy Fortune – he will rename the nightclub Alfie’s. His father is co-owner. Best said: “I’m not interested in having a good time myself, I just want to earn money. It will be my fault, no-one else’s, if it fails. There’s no such thing as a bad club, only bad promoters.”

Nottingham Cornerhouse opens indoor golf centre: Nottingham’s Cornerhouse complex has opened the first Lost City adventure golf centre in the East Midlands. The golf complex covers 16,000 square feet on the lower ground floor of The Cornerhouse. The Lost City features two 18-hole courses with interactive features such as talking Inca statues and musical landscaping. Suzanne Green, centre manager at The Cornerhouse, said: “We’re delighted to welcome The Lost City to our venue. It really adds something different to the fantastic mix of leisure activities we already have on offer here and we have already taken a lot of calls from customers interested in trying it out.”

PayPal partners IBS to introduce face payment system: Intelligent Business Systems (IBS) has partnered PayPal to integrate a mobile payments app into its EPOS-driven systems to enable bars and restaurants to offer their customers a quick and easy ‘face payment’ alternative to cash and credit/debit cards. The first integrated solution on the UK high street, users load the app on their smartphone, search and discover local hospitality and retail businesses. Users can then check in to a location by ‘dropping the pin’ on the outlet they want to visit to notify the operator they are on site. “PayPal selected us because of our prestigious client portfolio in the capital and our in-house development resources. We’re delighted to have integrated the app into our POSLink/StockLink offering as it gives our clients payment options to enhance the guest experience,” said IBS managing director Gareth Powell. 

Company news:

Brewhouse and Kitchen eyes two Convivial brewhouse pubs: Brewhouse & Kitchen, the EIS company that is headed by Kris Gumbrell and former Mitchells & Butlers executive Simon Bunn, would like to acquire the two London brewhouse pubs operated by sister company Convivial London Pubs, which has all six of its sites of the market for £16.9m. Convivial operates the Lamb Brewery, Chiswick and the Botanist in Kew Garden as brewhouses. Bunn, whose company has completed a £5m Enterprise Investment Scheme fund-raising and currently operates The White Swan in Portsmouth, told Propel: “We’re definitely in the game for them - those are the two we’re most interested in. They’re trading well and have further to go – we’ll have to see where it goes as the bids come in.” The Lamb Brewery is priced at £2.8m and the Botanist is priced at £2.5m. Agent Christie + Co is asking for indicative offers by 9 September.

Grand Union lines up two more sites: Grand Union, the London bar operator led by Adam Marshall and 50% owned by investor Luke Johnson, is lining up two more openings. The first will be a Star Pubs and Bars site in Chancery Lane called The Blue Anchor, which will be renamed Chancery Grand Union and re-opened on 12 September. A second site is in legals – a free-of-tie lease with a private landlord in Farringdon. Marshall told Propel: “We’re not spending a lot of money on the Chancery Lane site – it has lots of fixtures and fittings already and we’re not paying a premium. It’s more of a rebrand. It has a 2am licence every day of the week and the area is crying out for a decent cocktail bar – it’s an area with lots of boozers.” Marshall reported that trading currently is “amazing” with company like-for-likes up 16% in July – site Ebitda conversion rates since the start of the company’s new financial year in April have been 24%. The additional two sites will take the estate to nine venues.

Former Ponti’s director to open 24-hour Great British café: Former Ponti’s director Phillip Inzani is to open the ‘ultimate 24-hour Great British café’, called Polo Bar, at 176 Bishopsgate. Aiming to celebrate all that is best of British, Polo Bar serves everything from craft beers, brewed locally, to Chapel Down wine through to a good old English “cuppa”, all designed to accompany the traditional British menu. The menu features fry-ups, pies, home-made steak burgers and salt beef sandwiches. Tea is served daily with scones from 3pm.

Thorndycraft takes senior Drake & Morgan role: London bar operator Drake & Morgan has hired former Novus director Jason Thorndycraft as its new operations director. Thorndycraft is the former chief operations officer of Novus Leisure, where he worked with Drake & Morgan founder Jillian Maclean. He left Novus in February after 11 years, having worked his way up from general manager of a Tiger Tiger venue through various area and operations management roles. Thorndycraft started his new role on Monday (12 August).

Malmaison signs deal with Starbucks: Malmaison Newcastle, based on the City’s Quayside by the Millennium Bridge, became the first hotel in the chain to open a Starbucks yesterday. Starbucks opened in the previous site of Café Mal, taking up permanent residence in the boutique hotel. This opening is the first of multiple Malmaison and Starbucks collaborations, with future stores planned to open in Malmaison hotels in Reading, Birmingham and Manchester.

McDonald’s playing Mozart to calm yobs: McDonald’s is using classical music to combat anti-social behaviour in its restaurants. A Stockport restaurant, which has suffered from behaviour problems, plays pop music during the day but switches to a full range of classical pieces, from full orchestra to solo piano, after 8pm. A McDonald’s spokesman said the move had helped enormously in restaurants that had previously been subject to bad behaviour.

Luminar to re-open flagship site after £1.5m investment – with queue-jumping option: Nightclub company Luminar will re-open its flagship Lincoln nightclub today after a £1.5m investment. The Ritzy will be called Moka and Shack. Moka and Shack general manager Paul Oloo said: “The transformation is the first the club has had in 15 years and has provided new dance floors, extra seating, raised VIP booths and Moka our stylish bar.” Sophie Hough sales and events manager said: “The booth booking is £70 and this includes queue jump, entry, use of the booth and personal waitress service.”

JD Wetherspoon invests £1m in 23 year-old pub: JD Wetherspoon has invested £1m in one of the oldest pubs in its estate. The Railway Bell in New Barnet was re-opened by chairman Tim Martin after the refurbishment. A spokesman said: “It opened in 1990 and needed investment so we looked at what we could to increase size internally and externally and ended up doing what we would do in a new pub. Other current areas of big investment are bringing our hotel rooms up to scratch as some of these are 10-14 years old – it is really no different to what hotel groups do as part of their seven to ten year upgrades.”

Unsecured creditors of Scotch Steak Houses currently £1.5m out-of-pocket: Unsecured creditors of London restaurant company Scotch Steak Houses are owed £1,482,000, a new report by administrator Wilson Field has revealed. Any dividend is dependent on realisations of company assets. The company sold its leasehold interest in two sites in Queensway and Shaftebury Avenue to a new company called New Scotch Steak Houses with the same director, Mr Salih. The administrator has told creditors that a report on the conduct of the company’s director has been submitted to the Insolvency Service. The administrator added: “However, I am unable to comment on the content of the report.” 

Bar Sport adds franchised site in Bromley – two more lined up: A franchised Bar Sport has opened in Bromley after an investment of £500,000 in a move that has created 30 new jobs. The franchise will be run by businesswoman Jenn Healy and her partner Hylton Shaer. “I have been a businesswoman for much of my adult life and when we discovered about the Bar Sport franchise we thought it would be a perfect opportunity to run a business with a huge emphasis on sport as we both love it,” said Healy. The Bromley venue follows recent openings in Maidenhead, Croydon and Wilmslow, while venues at Newbury, Watford and Livingston in Scotland are set to open in the autumn. Bar Sport was originally established in Cannock in 1998 by former top amateur boxing champion Scott Murray.

Greene King opens new Old English Inns site: Greene King has added The Fox in Eastgate Street, Bury St Edmunds to its old English Inns estate – it has re-opened after a refurbishment. New managers are Bob Hackett and Tracy Harrison. Said Hackett: “We are very proud to be running The Fox which is a great example of an Old English Inn - a wonderful pub with bucket loads of character and charm.” It will close briefly in the autumn for further refurbishment.

Restaurant consultant forecasts Hakkasan will convert Chrysan site to Yauatcha: Restaurant consultant Adam Hyman has forecast that Hakkasan Group will convert its failed Chrysan restaurant to a Yauatcha. Hakkasan, founded in London by Alan Yau and owned by Abu Dhabi-based Tasameem since 2007, plunged to a loss of £4,048,000 on turnover of £28,129,000 in the year to May 2012. The company made a small pre-tax profit of £58,000 on turnover of £20,933,000 the year before. The company is likely to have also seen losses in its most recent financial year after expenses incurred in opening its Chrysan Japanese restaurant site in September 2012 and then closing it in April this year.

Wickwar Brewing Company adds third Bristol pub site: Wickwar Brewing Company has acquired its third Bristol pub, Cotham Porter Stores, which was acquire for around £250,000 from the Enterprise Inns estate through agent Christie + Co. Wickwar Brewing Co is owned and run by chairman Mike Watts, previously chief executive of Morland Brewery (brewers of Old Speckled Hen), Mike Flavin, previously operations director at Avebury Taverns and Ian Frost previously commercial director also at Avebury Taverns. The new owners are currently upgrading the existing facilities at the pub and plan to open on 22 August. They are already planning a second phase investment which is expected to take place next year. Nicholas Calfe, of Christie + Co’s Bristol Office, said: “Cotham Porter Stores attracted many offers from several interested parties indicating growing demand for quality freehouses in and around Bristol city centre.”

Young’s re-opens Weybridge pub with Masterchef contestant menu: London operator Young’s has re-opened its Hand & Spear pub in Weybridge, Surrey with new food offering from ‘Masterchef the Professionals’ semi-finalist Karl Byron. Byron has crafted a menu of British classics that demonstrates his passion for locally sourced and foraged ingredients.

Hungry Guest bakery doubles up: The Hungry Guest bakery business, headed by Danish-born master baker Troels Bendix and based in Petworth, West Sussex, has acquired Mackenzies, a cafe bar in West Malling, Kent for a second site. Mackenzies is located close to the adjoining residential and commercial area of Kings Hill, purported to have one of the highest average household incomes in the UK. Mackenzies came to the market through agent Christie & Co with an asking price of £775,000 and attracted many offers.

SA Brain to open coffee shop brand in Leominster on Friday: SA Brain is to open its latest Coffee#1 site in Leominster tomorrow (16 August). The company stated: “We’ve taken on the stunning grade 2 listed building formerly known as The Three Horseshoes which was trading as a pub on Corn Square. We’ll be turning it into a wonderfully cosy coffee house, with rustic reclaimed furniture, lovely leather armchairs with plenty of character and cheer. The interior will be designed to be warm and vibrant for rainy days too. It will have a living room feel, with carefully chosen artwork, shelves packed with vintage books and a log-stocked fireplace.”

TGI Friday’s loses Edinburgh site to fire: TGI Friday’s has been forced to close in Edinburgh site in Castle Street to a major fire that caused a partial collapse of the building’s roof. Around 50 firefighters attended the blaze, using ten appliances. Customers are being redirected to the next nearest site in Glasgow. It is not known when the company will be able to re-open the venue.

Texas barbecue restaurant to open on ground floor of Brewdog Shoreditch: A Texas BBQ restaurant is to open in the basement of Brewdog’s London Shoreditch site serving beef jerky and other smoked, Texas-inspired meats. Co-founder Joe Walters will appear BBC’s Dragon Den this Sunday pitching his beef jerky. The restaurant will be called Texas Joe’s Slow Smoked Meats – or Texas Joe’s for short. It is as a semi-permanent “pop-up”. The Shoreditch site will create small batches of beef jerky on site, and work as a test kitchen to develop new flavours and processes.

Gatecrasher goes through pre-pack administration eight months after Christmas site closure: The four-strong Gatecrasher nightclub business has undergone a pre-pack administration eight months after it was forced to close a key site over Christmas. The company lost £1.1m between 1 June 2012 and 31 March 2013, according to a report by Duff & Phelps. Gatecrasher, which is headed by Simon Raine, failed in an attempt to re-open its flagship site in Watford open for Christmas. Licensing authorities ordered the closure of its troubled Area nightclub for two months and a rebranding for when it re-opened. Gatecrasher lawyers attempted to appeal the length of the closure order to allow Area to re-open as Cameo for Christmas. The legal challenge failed and Cameo was allowed to open on 6 January 2013, missing the crucial Christmas and New Year trading period. Suspension of the Watford premises licence was the second time in three years that Gatecrasher had a nightclub licence suspended. The company filed annual accounts that reported turnover dropped by 13% to £9,373,067 in the year to 29 May 2011 after the licence of its Leeds club was suspended. The company reported pre-tax losses of £985,038 after exceptional items.

Greene King lines up two more Realpubs conversions: Greene King is planning two more conversions of London pubs to its premium Realpubs format -The Salt House in St Johns Wood and The Wilmington Arms in Clerkenwell. The Greene King annual report, issued at the start of this month, stated that it had achieved in excess of a 33% Return on Investment on the seven sites it had converted so far but that returns were expected to reduce over time.

Bunnychow takes permanent Shoreditch site: Bunnychow, the South African street food vendor, has secured investment from Shanti Hospitality to open its first permanent site in one of Boxpark Shoreditch’s sought-after shipping containers. Bunnychow is a hollowed out, filled loaf said to have originated in Durban, South Africa in the 1940s. The 270 square foot Boxpark site can seat up to 12 customers indoors, and up to 50 outside. The company stated: “The industrial look with chipboard tables and hanging pendant lights is perfectly in tune with the stripped back style of menu.” Bunnychow will open in September.

Chipotle Mexican Grill – we’re facing a shortage of “responsibly raised” meat: Chipotle Mexican Grill has admitted it is facing a shortage of “responsibly raised,” beef in the US this year. The company insists, however, it is not changing its standards for what constitutes the kind of meat befitting its “Food With Integrity” positioning. The statement was released in part as a response to reports published Tuesday that said the brand might change its standards to use meat treated with antibiotics in cases of livestock illness.

West Cornwall Pasty Company launches The Special One to mark Mourinho’s return to Chelsea: West Cornwall Pasty Company has created The Special One, a commemorative piri-piri chicken pasty, to celebrate the return of Portuguese football coach, Jose Mourinho, to Chelsea. A campaign on traditional poster sites and digital screens around the Chelsea stadium will promote the limited edition pasty during Chelsea’s first Premier League match against Hull on Saturday.

KFC like-for-likes down 16% in July in China: Yum! Brands has reported its China division saw a 16% decline for its KFC brand in July and a 3% gain at Pizza Hut Casual Dining. Like-for-likes in June had grown 6% at Pizza Hut in June KFC’s decrease had narrowed to 13%, which was KFC’s best result since April. In a filing with the Securities and Exchange Commission, Yum said that “KFC sales were negatively impacted by the residual effects of adverse publicity surrounding the December poultry supply incident”.

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