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Thu 10th Oct 2013 - Caprice Holdings, Enterprise, Nando’s, Punch and Wildwood

Story of the Day:

No Saints’ bid to re-open Birmingham Oceana blocked: A bid by No Saints, the company headed by nightclub veteran Stephen Thomas, to re-open the former Oceana in Birmingham as a Wonderland venue has failed. It is understood that No Saints had been approached by the venue’s landlord offering to invest in the site if it could be re-licensed – it saw an estimated £6m investment when it was originally opened. However, police raised fears over a history of violence, firearms offences and the death of a customer at the site. City centre licensing officer PC Abdool Rohoman said the venue had been a drain on police resources. A 21-year-old man died trying to climb a wall after being thrown out through a fire exit and trapped in the club’s car park in 2007. Oceana was fined £85,000 for breaches of health and safety. The club, which would accommodate up to 1,630 customers, had promised to install CCTV and operate crime reduction initiatives such as Drug Safe. Birmingham city council’s licensing sub-committee rejected the license in the light of the strong objections from police. Had No Saints been successful it would have been the third former Oceana venue run by the company – it also operates former Oceanas in Wolverhampton and Milton Keynes. Birmingham Oceana closed in February 2012. 

Industry News:

Luke Johnson – lawyers and accountants can feel like a burden on entrepreneurship: Sector investor Luke Johnson has argued that fees paid to lawyers and accountants can feel like a burden on entrepreneurship. In his Financial Times column, he wrote: “Between them, the giants of the professions make billions of dollars in fees, which seem to increase remorselessly. The various companies with which I am involved must spend more than £1m every year on anything from conveyancing to auditing to compliance. I suppose it is the price capitalists pay for the rule of law, good title to assets, relatively free markets and a supply of accurate financial information. But it often feels an expensive burden on entrepreneurship.”

Poor quality pub wine puts customers off: Marks and Spencer’s head on online wine Chris Murphy has argued that poor quality wine in pubs is putting customers off for ever. He argued that too many venues are selling inferior wine or not keeping it and serving it properly, squandering a chance to inspire more people to try wine. “Too often people will try wine in a pub and think ‘I don’t really like that’. I don’t think pubs go for the right wines and they don’t keep it right. And it affects people’s perception.”

Starbucks holds three-day pay-it-forward promotion: Starbucks in the US is holding a three-day “come together” promotion where it is rewarding community-minded customers who “pay it forward”. The company tells customers: “In times like these, small acts of civility like these make a big difference. With that, we are extending a gesture. If you come into Starbucks and buy someone else their favourite beverage, we’ll give you a free tall brewed coffee. We’re hoping this small motivation will encourage you to be the spark of connection that helps bring us all a little closer at a time when showing our unity is so important.” The offer takes place between 9 and 11 October at participating stores.

Company News:

Ivy operator Caprice sees like-for-likes and profit fall: Richard Caring’s Caprice Holdings, the operator of the Ivy and J Sheekey Oyster Bar, has reported like-for-like sales down 1.2% in 2012, largely because the Jubilee and the Olympics had a negative effect on the company’s West End and Mayfair sites during the summer. Outside of the summer months, like-for-likes were up on the previous year. Turnover rose 7.2% to £44.7m, thanks to a full year’s trading at the Mayfair restaurant 34. Adjusted Ebitda margin fell to 19.2% from 20.5%. Pre-tax profit was up 6.3% to £4.24m from £4.52m the year before. The company had £1.28m of re-organisation and redundancy costs in the year and £822,000 was paid to directors for loss of office.

Nando’s lines up five openings in Scotland: Restaurant chain Nando’s is to open five new restaurants across Scotland. The chain, which opened the first new restaurant of the planned expansion in Hamilton yesterday, will open further branches at Sauchiehall Street, Glasgow; Braehead Shopping Centre; Palace Towers Retail Park in Hamilton; Central Retail Park in Falkirk and the OMNi Centre in Edinburgh. Nando’s, which also opened a new restaurant in St Andrews in March this year, is also currently looking at “a number of other sites” across Scotland. The new Hamilton restaurant has opened in the former Birthdays store unit in Palace Towers Retail Park, which Nando’s has taken on a 20-year lease on rent of £95,000 a year. The new Glasgow restaurant, due to open in January 2014, will be in the former Moben Kitchen showroom. Nando’s has agreed a 20-year lease on the ground and basement floor units at £63,500 a year. The Braehead restaurant, which will open in December, is on a lower level unit in the shopping centre alongside Prezzo, the Handmade Burger Company and The Filling Station. Nando’s has taken a 20-year lease on the unit at a rent of £113,500 a year. A new Nando’s will open in November at the Central Retail Park in Falkirk, where the chain has agreed a 15-year lease on a unit at a rent of £53,000 a year. The chain will also open a new restaurant at the OMNI Centre in Edinburgh in February, having agreed a 20-year lease on a unit at a rent of £120,000 a year. Isla Monteith at Cushman & Wakefield, who handled the acquisitions on behalf of Nando’s, said: “Nando’s are currently looking at a number of further sites in Scotland, so it looks like it is going to be an exciting time ahead for the company.”

Marston’s finance director – no increase in competition for new-build sites: Marston’s finance director, Andrew Andrea has told Propel that there has been no significant increase in competition for freehold, stand-alone sites. Andrea said the company currently has 100 or so sites under review and it looks to step up its new-build programme. He said: “There’s been no significant increase in competition compared to previous years. We’re not across Greene King competing for sites any more than we have historically.” Andrea said Marston’s Project Revere premium pub scheme, which has opened six sites so far, is “still in its infancy” although “early signs at the top line level have been encouraging”. 

Marco Pierre White to re-open site next week: Chef Marco Pierre White is to open his latest acquisition, The Rudloe Arms, Corsham, near Bath, Wiltshire, next Friday (18 October) after a major refurbishment under the Wheelers of St James brand. The site was previously called The Rudlow Hall Hotel. White also operates The Pear Tree Inn and The Horse and Groom in Wiltshire as part of a porfolio of ten sites carrying the brand name.

Wayne Brown – no turning point in site at Greggs: Canaccord Genuity leisure analyst Wayne Brown has argued that there is no turning point in site at Greggs. He said trading for the 13 weeks to 28 September “is better than we had expected with like-for-likes sales declining 0.5% following the first half decline by 2.9%. Management state that much of this improvement is due to the more favourable weather patterns in August and September following the heatwave in July. We would also remind investors that the comparative period (14 weeks to 6 Oct) saw like-for-like sales fall 2.6% but due to the positive impact of last years adventure into wholesaling, total sales growth of 3.6% lags that of the rise of 5.9% last year. Whilst the improvement in Q3 trading is a net positive, the investment case remains unchanged. Profits will continue to come under pressure over the next two to three years as the group invests in refurbishments and strategically reposition the business towards a ‘food-on-the-go’ model. This does not come without execution risk alongside the shift of the model into a sub-sector that is probably one of the most competitive in the UK retail landscape.”

London bakery owner – “I invented the duffin”: The owner of a small London bakery chain has complained after Starbucks UK trademarked the name of one of her most popular products – the duffin. Bea Vo, who owns Bea’s of Bloomsbury, says that she invented the duffin - a cross between a muffin and a doughnut – more than two years ago with its recipe included in a cookbook published in September 2011. She told The Independent: “Starbucks maintains its original account that its invention is a unique invention and that it did an extensive online search for the word duffin and found nothing and as a result their supplier trademarked that name. I think that’s rubbish.” Ian Cranna, Starbucks vice-president for marketing and category, said: “Since launching, we have discovered there are other duffins out there in the UK, including at Bea’s of Bloomsbury. However we’d like to make it clear that neither Starbucks nor Rich’s Products has suggested to Bea’s of Bloomsbury that they will attempt to stop them selling their own duffins.”

Bem Brasil opens first ‘non-city centre’ site: Bem Brasil, the north west of England-based Brazilian barbecue chain, has opened its first “non-city centre” site, in Altrincham, Cheshire. The operator’s three restaurants in Deansgate and the Northern Quarter, Manchester and Hanover Street in the centre of Liverpool are said to be popular with Premier League football’s South American players looking for the taste of home. The 130-cover outlet on Altrincham high street, which has seen £130,000 spent on it, is decorated in a “rustic contemporary” Brazilian style with specialist decor, knives and cutlery imported from Brazil. The barbecued meat is carved at the table by the waiters, and the all-inclusive price includes unlimited trips to the banquet style buffet for authentic Brazilian side dishes. Kleber Magalhaes, the founder of Bem Brasil, said: “During difficult economic times, people’s dining-out habit becomes a search for great value along with great quality, and that’s how I believe we’ve gone from strength to strength, doubling in size over the last four years; by giving our customers great food, entertainment and value for money. The £70m investment planned to regenerate Altrincham will bring people back into the town so there’s real potential and opportunity in the area. Many years ago I worked there as a waiter, so it’s good to be investing and helping to revive the local economy while bringing something a bit different to restaurant-goers. With Brazil hosting the World Cup next year and the Olympics in 2016, we anticipate even greater interest in the best of all things Brazilian, which is what we can offer.”

Douglas Jack issues Buy note on Marston’s shares: Numis Securities leisure analyst Douglas Jack has issued a buy note on Marston’s shares, with a price target of 185p, after yesterday’s trading update. He said: “Full-year trading is in line, with profits up strongly in Premium & Destination, up in Brewing, flat in Leased and down in Taverns. We are holding our forecasts, but medium-long term growth prospects should be improved by Marston’s decision to accelerate the pace of tenanted pub disposals and new-build expansion. Marston’s earnings quality is improving: 130 tail-end pubs were sold for circa £50m in 2013E, with circa £70m of proceeds likely in 2014E. These proceeds are being recycled into higher return, more sustainable new-build pub restaurants, of which we now expect the addition of 27 sites in 2014E and 33 in 2015E. With all the other divisions (ex-tenanted) now trading positively, we believe this strategy should underpin attractive medium-term growth in both earnings and dividends (2014E yield: 4.6%).”

JD Wetherspoon partners pharmacy group to offer in-pub health checks: The award-winning pharmacy group Mayberry has teamed up with JD Wetherspoon to run a unique programme offering health checks in the chain’s pubs in south Wales. For any pub regulars wishing to take part, the checks come in the form of a blood pressure test and a consultation with pharmacist which will take in issues such as weight loss, giving up smoking, and adopting a healthy lifestyle. The programme, which will run on selected days through the rest of October, and into November and December, is focusing on high blood pressure. Mayberry Pharmacy, set up in Pontypool in the mid-1990s, was Wales’s community pharmacy of the year in 2010. Richard Bond, area manager for Wetherspoon, said the company was delighted to support the campaign. “The health and wellbeing of our customers is very important to us and this campaign provides us with the opportunity of giving them the chance to learn about their health,” he said.

Wildwood one of three new restaurants for Salisbury: Wildwood, the restaurant chain run by the Tasty group, is looking to open in a former Thomas Cook travel agency in Queen Street, Salisbury. It is seeking permission to develop the ground and first floors of the Grade II building. The application from Wildwood, which currently has 21 outlets, including four Wildwood Kitchens, is one of three bids for new restaurants in Salisbury. Another involves a “well-established family high street restaurant operator”, currently unnamed, looking to move into what is currently a clothing store on the corner of Milford Street and Queen Street, for which planning permission has already been given. The third involves an application before Salisbury Council for the conversion of The Old George, a former inn in Rollestone Street, by local businessmen into a “high-quality” Indian restaurant.

Joule’s negotiates £4m debt facility: Joule’s Brewery has negotiated a new £4m facility with Nat West that will allow the Market Drayton, Shropshire company to continue to expand both its pub estate and launch new beers in the emerging craft beer market. The new arrangement delivers £1.2m of additional funds that will be free for investment. The new debt comes after the appointment of former 3i partner Mark Heappey as company chairman. He said: “I was delighted to have been invited to chair this dynamic business that is committed to quality in its pubs and of course the beer. The craft beer sector is an exciting place to be as the pub business starts to move to a cycle of greater specialism – Joules looks to be to be a likely winner in this.”

Greencliffe Taverns to re-open Enterprise Inns site: Greencliffe Taverns is to re-open The Brownlee Arms, formerly known as the Grey Horse on Long Row in Horsforth, near Leeds, an Enterprise Inns site, this Saturday (12 October) after a six-figure investment. Greencliffe Taverns, owned by twin brothers Chris and Nick Green, has operated a number of award-winning pubs in Yorkshire, including The Stansfield Arms in Apperly Bridge and The Chevin Inn in Menston. The Brownlee Arms is named in honour of local triathletes and Olympic medallists Alistair and Jonny Brownlee. Chris Green said: “We’ve always thought the pub had lots of potential and our plans for The Brownlee Arms are markedly different from the pub’s previous offer. The Brownlee Arms will offer a quality dining and drinking experience with an emphasis on locally sourced food and drink wherever possible.”

Kurobuta secures pop-up site: Kurobuta, the mid-market contemporary Japanese concept run by Scott Hallsworth, ex-head chef at Wabi and Nobu, and his business partner Andrew Stafford, formerly of Nobu and The Ritz, has secured a pop-up site through agent Shelley Sandzer. The site is at 251 King’s Road, Chelsea and has 45 covers. Kurobuta started trading last Saturday for the London Restaurant Festival and will remain in operation until the end of the year. Kurobuta is an izakaya – a Japanese style pub – that offers cocktails and beers as well as sake and sochu. An eclectic range of small dishes will be served, suitable for sharing or single consumption. Guests will also be able to construct their own customised meals, or choose from the many bento boxes on the menu, at “very reasonable” prices. Joshua Rose, of Shelley Sandzer, said: “Pop-ups continue to be popular all over London. This site provides a platform for Kurobuta to help establish their brand in London to a young fashionable crowd whilst they work towards their permanent site.” Hallsworth and Stafford have secured their first permanent site in Connaught Village, north of Hyde Park in Central London, which is expected to open later this year.

Work to start on Harrogate Jamie’s: Construction work starts this month on the £9m Harrogate House restaurant scheme in Parliament Street, Harrogate that will provide a home for a Jamie’s Italian outlet. The developer, Harrogate-based Lateral Property Group, has appointed the Leeds-based company GMI Construction as contractor for the development. Lateral’s retail development director, Marcus Briggs, said: “We are delighted to be commencing another project with GMI. When complete, this will deliver a stunning scheme in the heart of Harrogate with an enviable restaurant line-up anchored by Jamie’s Italian in time for the Tour de France coming past their front doors on July 5 2014.” The company said the four new units in the development would consolidate Parliament Street’s position as one of the prime restaurant and leisure pitches in the North of England Lateral also developed Jamie’s restaurant at Lendal Cellars in York, which opened in July 2012.

Punch Taverns reports more than 50% of PDMs now hold industry qualification: Over half of Punch Taverns’ partnership development managers (PDMs), who oversee dozens of pubs across dedicated areas, have achieved an industry-recognised qualification in hospitality management. The findings of the BISC report in 2010 identified a need for area managers across the industry to demonstrate that they had the key business skills to provide partners with sound and profitable business advice. Punch led the way in 2011 by trialing this new qualification with the BIIAB and a pilot group of PDMs. Now the qualification is an integral part of the Punch induction programme and all new PDMs joining Punch will qualify.

YO! Sushi stocks Zeo: YO! Sushi will stock Zeo at all 65 of YO! Sushi’s UK restaurants from this week. Katie Crossfield, marketing manager at YO! Sushi, said: “Since 1997, YO! Sushi has been at the forefront of introducing new tastes and flavours for the British palate to enjoy. From the fantastically fun way our food is served on our iconic ‘kaiten’ conveyor belt to the innovative dishes we offer on our menu, we’re pleased to be able to offer yet another tasty innovation with Zeo.”

Great Northern Inns trials craft beer concept: Great Northern Inns the Nottingham pub company, has opened a new venue in its home city called the Ned Ludd to trial a craft beer concept. The bar, in Friar Lane, was originally a bank and most recently a venue called the Stop Bar. It now has four cask ale handpulls flanked by more than a dozen keg craft beer dispensers. Dave Willans, Great Northern Inns’ founder, told the Nottingham Post: “There will be some weird and wonderful stuff on the bar. Nottingham’s a bit of a craft beer desert at the moment.” Willans said Great Northern, which owns six other venues in and around Nottingham, had been bought in initially to advise the landlord of the building on the running of the Stop Bar: “He just wanted an opinion on why it wasn’t working. We’d been looking around for six to eight months for someplace small where we could trial a craft beer concept.” Willans said he had been inspired by visiting craft beer bars in London and the US. In New York, he said, he saw beer cellars where they were going through “just a bit of Budweiser and massive amounts of small-batch craft beer”. He wanted, he said, to bring that experience – minus the Bud – to Nottingham: “You have got to look at trends and think, ‘is this something Nottingham could do?’ Hence, the craft beer. It’s very good beer and it’s brewed in the correct manner. It might not be the cheapest, but I believe people will seek it out.” The Ned Ludd, which was revamped by Great Northern at a cost of £150,000, will open for breakfast, and the lunch and evening menu will feature locally sourced “artisan food” and “contemporary English sharing plates” – not tapas “per se”, but borrowing from that idea, Willans said. The menu, and the bar’s staff, will also offer suggestions on beer/food flavour pairings. General manager Adam Andrew Hayes said: “It’s about expanding people’s tastes away from the mainstream. I’ve said to all the staff, there’s no rules, there’s no right or wrong, there’s no pretension.”

Wendy’s sells 26 sites to franchisee: The Wendy’s Company has sold all its 24 company-operated restaurants, along with two future locations, in the Seattle area to Cedar Enterprises, a long-time Wendy’s franchisee. The sale makes Cedar, based in Columbus, Ohio, Wendy’s third largest franchisee, operating 170 restaurants in five states, including 47 in Washington. Wendy’s chief executive, Emil Brolick said the sale was an important part of the company’s brand transformation, including new restaurant development, a new Wendy’s logo, new products and new packaging, as well as concentrating its ownership geographically through the sale of 425 company-operated restaurants in 13 US markets to franchise operators.
Micropub revives old inn 95 years after closure: Councillors in Sussex have approved the opening of a micropub in premises that closed as an inn nearly 100 years ago. The Old Star Inn at the corner of Church Street and High Street, Shoreham, the first micropub in the town, will occupy part of the site of the original Star Inn, which shut soon after the First World War. The two men behind the venture, Marc Kent and Hugh Robinson, both 52, plan to sell cask ale, cask cider, perry, soft drinks such as dandelion and burdock and a small selection of wines, and limit the seating to 30. They intend to open from mid-morning until about 9pm. Adur Council’s planning committee approved their application after principal planning officer Jo Morin said: “The micro pub would serve a niche market. It involves a particular concept. The proposed use would contribute to the vitality of Shoreham town centre.” Kent told The West Sussex Gazette: “Everything will be from Sussex. We will serve simple cold food such as farmhouse cheese and chutneys and pork pies. Inside will be wooden, with ale jugs along the tables, an oak bar, snug tables, a big picture of the former pub as it was and old-style frosted windows.”

Eddy Passey to join Red Hot World Buffet as board director: Eddy Passey, group operations director at the pan-European hostel provider Beds and Bars, is to leave the company to become a board director at Red Hot World Buffet, the buffet chain that saw investment from Luke Johnson’s Risk Capital earlier this year. It is understood that Passey is likely to join Red Hot World Buffet full-time before Christmas. James Horler, who is interim chief executive at Red Hot World Buffet, told Propel: “We are strengthening the management team to get ready for expansion – Eddy will be joining Red Hot World Buffet as a board director.” Passey, who has worked at Beds and Bars for 11 years, said: “I’m very excited by the opportunity to work with James and Risk Capital.” It is understood that Passey will oversee operations at the company, reporting to Horler. Luke Johnson told Propel in August that Risk Capital had invested in Red Hot World Buffet because it was attractive for a number of key reasons: it has a low single digit rent to turnover ratio, holds a leadership role within the buffet segment in terms of quality, and the offer had broad appeal within the family market. He also argued that the size of Red Hot’s restaurants offers major economies of scale that can be maximised still further. Johnson said: “I think children and families like the ‘help yourself’ and fixed price meal aspects of Red Hot World Buffet. It also has a very attractive rent roll – as low as any restaurant group of a similar size.” Johnson said that the focus in the first year would be on opening a site in the Midlands and retro-fitting three or four of the existing sites to apply some of the lessons from the latest opening in Nottingham Cornerhouse to earlier sites like Milton Keynes. Sites taking an average of £4m per year are subject to a “lot of wear and tear”, Johnson said. The medium-term plan will be to add one new site per year for the next three years. “We’d like to open at least one site per year - they’re not cheap to open at upwards of £1.5m per site. This is one of the areas – property – where we feel we might be able to help,” he said.

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