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Morning Briefing for pub, restaurant and food wervice operators

Tue 26th Apr 2016 - Luke Johnson sells flagship Red Hot site to new buffet operator
Luke Johnson sells flagship Red Hot site to new buffet operator: Red Hot World Buffet, the buffet business owned by Luke Johnson’s Risk Capital Partners, has sold its flagship 24,000 square foot Nottingham site to a new vehicle called Framemill today (Tuesday, 26 April) for circa £350,000. Framemill will change the name of the site to World Cuisine Buffet within four weeks. The deal is the first of the company’s six sites to be sold. The eventual sale of the portfolio will represent a rare sector reversal for Johnson whose original investment valued the company at circa £20m. The most recent full year accounts to the end of January 2015 show Red Hot’s parent Buffet Restaurants had a turnover of £21.5m, Ebitda of £1.26m but operating losses of £1.4m. The Nottingham site’s buyer Framemill is owned by the Kayani family, which previously operated the French brasserie concept Cafe de Amis in Covent Garden. The sale is the first from the group of six sites placed on the market through agent CDG Leisure with an overall portfolio value of £5.5m. The Nottingham site had turnover of circa £150,000 a week in its heyday – it is believed to be turning over in the region of £65,000 to £70,000 a week gross at the moment. James Horler, who has overseen the operational side of the business, told Propel: “Nottingham is the first site to be sold although we assigned the Milton Keynes site quite a while ago.” The past year has seen the opening of rival buffet restaurant Cosmo in Nottingham and it is understood that the Nottingham Red Hot World Buffet is currently loss-making. “A lot of other restaurants have opened in Nottingham in recent years,” added Horler. Nasim Kayani told Propel: “We will be investing very heavily in the site and adding new and exciting world cuisines with new live cooking stations. We believe this is a great opportunity to reinvigorate a brand that was unloved within a large venture capital group (structure).” Specialist sector lender First Merchant has provided Framemill with finance to acquire the site.

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