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Fri 1st Mar 2019 - Propel Friday News Briefing

Story of the Day:

Grind returns to Crowdcube as it eyes £2.7m for next stage of expansion: Grind, the independent coffee and cocktail bar, is returning to crowdfunding platform Crowdcube to fund its next stage of expansion. Propel understands Grind is aiming to raise up to £2.7m to fund a series of openings. The 11-strong company is believed to have secured a number of central London locations for its pipeline, adding to its Liverpool Street Grind in Broadgate Circle, which will open in April, and its first franchised site, which will launch with transport hub foodservice specialist SSP at London Bridge. The campaign is set to launch on Friday, 8 March marking Grind’s third and final planned raise on the Crowdcube platform following the success of its £1.3m bond in 2015 and record-breaking £2.1m equity raise in 2017. Grind closed its last raise within five days of public launch having hit its initial £750,000 target in three hours. Founder and chief executive David Abrahamovitch said: “Since raising on Crowdcube in 2017 we’ve continued to expand across London opening our biggest site to date, Greenwich Grind, just a few months ago, which has been a huge success since we opened. We’ve got a huge amount lined up for the next 18 months and couldn’t be more excited to announce our return to the crowd.” Since opening in Shoreditch in 2011, Grind has “burned the candle at both ends to serve coffee, food and cocktails to a killer soundtrack”. Last year, the company debuted its Grind At Home collection – led by some of the UK’s first compostable coffee pods for Nespresso machines.

Industry News:

Social Strategy In A Day open for bookings: Social Strategy In A Day, an event aimed at allowing companies to develop and hone their social media strategy, has launched and is open for bookings. The event features all-new content and insights to allow companies to increase brand exposure, broaden their reach and ensure their digital marketing really delivers. Propel has partnered with digital marketing company Digital Blonde for the one-day advanced workshop, which will cover everything a marketing department should be thinking about when it comes to social strategy. The event takes place on Thursday, 4 April at One Moorgate Place in London. Insights will include how to drive business via social media; which social media activity works best for each generation; the key to successful storytelling; and the latest findings in consumer psychology and how they can benefit your social media communications. There will also be tips on how to improve your food and drink photography, alongside insights on key apps, how to make the most of Instagram and Facebook, and how to make your social spend count. Those who book tickets can submit questions ahead of the event for the Digital Blonde team to answer in a special “20 questions in 20 minutes” session. Tickets are £295 plus VAT for Propel Premium members and £345 plus VAT for non-members and can be booked by emailing

UK continues to lead European hotel transaction levels in 2018 as investor interest stays strong: The UK confirmed its leading role within Europe’s hotel sector, reaching transaction volumes of €6.2bn (£5.3bn) in 2018, up 14% on the previous year’s €5.5bn, according to the annual European Hotel Transactions report by global hotel consultancy HVS. London remains the leading European hotel transaction market with total volume of about €2.1bn, with Dublin second totalling €610m. Dublin saw the largest volume increase, with transactions rising 215% year-on-year. Total European hotel transaction volumes reached €18.6bn in 2018, a decrease of 14% on the previous year but still the fifth-highest level on record. A total of 655 properties changed hands in 2018 with the average price per key growing 8% year-on-year, reflecting the quality of hotels sold as well as a growth in values, the report stated. Single-asset transaction volumes fell 23% year-on-year to €9.5bn, representing more than half (51%) of total transaction volume. Sales included 271 individual hotels amounting to more than 45,000 rooms. Portfolio activity fell 3% year-on-year to €9bn, almost half (49%) of the total volume, with 58 transactions comprising more than 380 hotels. The main reason for the decrease was reduced activity from Asian and European buyers, with high-net-worth individuals in particular cutting their investment in hotels in 2018 to €116m, compared with €554m in 2017. Real estate investment trusts demonstrated an increased appetite for hotels, up 9% year-on-year to €1.7bn, while private equity firms provided the largest amount of capital by buyer type in 2018 (€3.9bn). HVS analyst Nicolas Auer said: “Continued revpar growth across most of Europe helped support transaction levels in 2018 and, despite uncertainty surrounding Brexit, interest from overseas investors in UK hotels has remained very strong, demonstrating confidence in the future of the UK hotel market.”

Trade bodies call for ‘clear and flexible’ National Minimum Wage rules: Government measures to introduce more flexibility to National Minimum Wage regulations must be accompanied by “clearer” industry guidance to ensure “businesses remain compliant”, trade bodies have said. UKHospitality chief executive Kate Nicholls said: “We are fully supportive of National Minimum Wage regulations and efforts to ensure team members are rewarded fairly by all employers. Any businesses paying below the minimum wage should be punished and we fully support the recent crackdown on genuine underpayment. However, there needs to be additional clarity and flexibility around regulations. We have seen some of our members punished because HMRC compliance officers appear to be making up the rules as they go along. Businesses have ensured they comply with the rules and then the goalposts move again. This makes it increasingly difficult for businesses to keep on top of constantly changing rules and they find themselves caught out despite their best efforts. The government needs to work with industry to provide enhanced guidance as soon as possible.” British Beer & Pub Association chief executive Brigid Simmonds branded National Minimum Wage rules “confusing, outdated and inconsistent”. She added: “It’s not always easy to specify or record exact salaried working hours, making compliance with the current rules that set out annualised hours, rather than the weekly contracts often offered in pubs, difficult and means they don’t always benefit the workers they seek to protect. We are calling for an immediate and essential update of the rules to reflect modern work practices.”

BTC calls for post-Brexit transition period to train domestic workers for takeaway sector following EU net migration fall: The government must initiate a post-Brexit transition period to give the takeaway sector time to train domestic workers to plug a widening skills gap, the British Takeaway Campaign (BTC) has said. The call follows the latest quarterly migration figures, which show a drop in EU net migration. BTC chairman Ibrahim Dogus said: “With 68% of takeaways experiencing skills shortages, it is imperative the government adopts a joined-up approach to catering skills for the takeaway sector if it is to plug this staffing gap. Policymakers must recognise domestic and immigration policy needs to work in harmony to generate the best results for business, with a single, positive approach to skills across government. The drop in EU net migration will exacerbate these skills shortages, putting at risk the future of a sector worth £4.5bn each year. That’s why we are calling for urgent action including a transition period that gives sufficient time to train domestic workers. More must also be done to overcome the recruitment gap by welcoming chefs with skills that can only be sourced internationally. We have urged the Migration Advisory Committee to address the absurd Shortage Occupation List anomaly, which allows for recruitment of specialist chefs for restaurants but, bizarrely, not takeaways.”

BII extends Licensee of the Year Award entry deadline: The British Institute of Innkeeping (BII) has extended the entry deadline for the Licensee of the Year Award 2018 to Friday, 15 March. The competition is open to anyone holding a personal licence that has been operating a licensed hospitality business for at least two years. A rigorous four-month judging process ends in the announcement of the winner at the BII Summer Event on Tuesday, 4 June. The winner will receive a year’s free Sky Sports subscription as part of their prize. BII chief executive Mike Clist said: “The BII Licensee of the Year Award has been going for more than 30 years. This competition searches for the gold standard in our industry – a licensee who excels in all aspects of running their business.” Licensees can nominate themselves or be nominated by colleagues, customers or suppliers at or call 01276 684449.

Company News:

Ian Payne – Stonegate Pub Company spends £27.5m on security per year: Stonegate Pub Company spends £27.5m a year to keep its customers safe, chairman Ian Payne told delegates at the 16th National Pubwatch Conference, held in Chester. Payne revealed Stonegate, which operates 772 sites including 125 in its late-night division, employs more door staff than any other company in the sector. Payne also said Stonegate uses 38,000 hours of security a week across 600 sites and on average employs 3,000 Security Industry Authority-registered door staff every week. Of its pubs, 75% are members of Pubwatch schemes, while 6% of the company’s general managers chair their local Pubwatch and 28% sit on committees. In a survey of its managers, more than three-quarters (77%) said local Pubwatch schemes improved relationships with neighbours, while 89% said it improved relationships with police and local authorities and 55% said Pubwatch helped cut crime. Payne told delegates: “It is incredibly important to us our pubs are run safely and well. Nobody wants to go to badly run pubs. I fundamentally believe in what Pubwatch is doing. If you think about any high street, licensed premises are key to driving people into those high streets. This is why we think late-night levies and the Scottish government talking about introducing a tourist tax are misguided. What local authorities should be doing is encouraging operators of bars and restaurants to invest and develop in the high street so more people go back there.” The National Pubwatch Conference was held in association with the Security Industry Authority for the second year running.

Chilango steps up site hunt as Burrito Bond 2 passes £3m milestone: Mexican brand Chilango has said it will step up its hunt for new sites after its Burrito Bond 2 offer passed the £3m milestone. The brand, which was founded in 2007 by Eric Partaker and Dan Houghton, operates ten restaurants across London and one in Manchester. A 12th restaurant is due to open in Birmingham in mid-2019. Last year, Chilango’s restaurants generated more than £10m in sales and £1.7m in Ebitda, with all 11 restaurants profitable. Chilango has identified a number of areas in high-footfall central London locations for its target audience of students and young professionals. It is ideally seeking ground-floor accommodation ranging from 500 to 2,500 square feet with sites in or near residential, office, retail and leisure areas, as well as universities, hospitals and transport hubs. Burrito Bond 2 has already exceeded the £2.1m that Chilango raised in 2014 through a mini-bond on crowdfunding platform Crowdcube. Richard Brown, of RAB Retail, who is Chilango’s property adviser, said: “This is an exciting brand with ambitious plans. With 11 established restaurants, we are now looking to help Chilango build on its success. Its novel way of raising capital means it’s in an excellent position with a strong covenant to expand its portfolio and we are looking to secure additional restaurant sites on its behalf in the next year.” In December, Partaker told Propel the success of Burrito Bond 2 showed the company had “come of age”.

Debut Costa Coffee site brought to market: The debut Costa Coffee site, which brothers Sergio and Bruno Costa launched at 324 Vauxhall Bridge Road, Victoria, in 1978, has been brought to market. The 182 square foot site is being offered as a lease assignment through agent Restaurant Property. The small site was the catalyst for the Costa Coffee brand to grow into the giant it has become, with 3,401 stores across 31 countries. Whitbread sold the brand to Coca-Cola for £3.9bn in early January. Danielle Agami, of Restaurant Property, said: “41 years on from the launch of a modest coffee shop, this is a unique opportunity to acquire the first home for the most prolific and largest coffee chain in the UK today and will hopefully become the new home for the next biggest brand.”

Primark to open its biggest store featuring three dining experiences: Primark is to open its biggest store, in Birmingham next month, which will feature three restaurants. The new branch in High Street will be the 187th Primark. As well as the normal fashion, home and beauty ranges, the store will feature a nail and eyebrow bar, a barber’s and three dining experiences. There will also be “other surprises” at the Birmingham branch, which won’t be revealed until the grand opening on Thursday, 11 April. A Primark spokesman told Birmingham Live: “This store will have many new features, including three unique and amazing dining experiences.”

BrewDog launches Local Tap initiative, reopens Soho site following biggest refurbishment so far: BrewDog has launched Local Tap, an initiative that sees the Scottish brewer and retailer dedicate two taps in each of its 43 UK bars to beer exclusively brewed by local breweries. The tie-up will see BrewDog work with brewers local to each bar site. BrewDog co-founder James Watt said: “The UK is home to some of the most distinctive, daring independent breweries in the world and we’re proud to give them a platform. The best way to topple the stranglehold mega-breweries have on British beer culture is by championing the amazing beers being created by independent breweries in towns and cities across the country.” Meanwhile, BrewDog has reopened its Soho bar after it underwent the brand’s “biggest refurbishment so far”. The company wrote on its blog: “Having closed the bar for nearly three weeks we gave it a facelift – and then some. We ripped out the old bar and added a new one in a different location, giving a much larger space upstairs. We also moved the staircase, added stadium seating and increased the number of booths on both levels. However, the biggest update took place behind the scenes. We have added four individually temperature-controlled draught lines to the bar complete with direct draw to the kegs underneath. With individual fridges for that quartet of kegs, we now control the temperature of every part of the journey beer makes from keg to glass.” The company said the next new-look bar to open would be BrewDog Barcelona on Thursday, 14 March, while it was also looking to rework its sites in Reading, Brussels, Oslo and Glasgow Merchant City. 

Whitbread begins Premier Inn expansion in Germany with Hamburg launch: Whitbread-owned Premier Inn has opened its second hotel in Germany, in Hamburg. The company has opened the new-build 182-bedroom site in Willy-Brandt Strasse in the city centre. It marks the start of its expansion in Germany, where it plans to operate about 20 hotels by the end of 2020, including sites in all its top ten target cities across the country such as Berlin, Cologne, Dusseldorf and Stuttgart. Premier Inn made its German debut in 2016 with a 210-bedroom hotel in Frankfurt. The Hamburg site will be followed by two hotels in Munich later this year and at least 15 openings in 2020, including rebranding of the 13 trading hotels acquired from Foremost Hospitality Group. The proposition has also been developed to specifically cater to the needs of the local market. A continental breakfast including cold cuts, a selection of baked goods and cheese is available alongside Premier Inn’s cooked breakfast, adapted to German preferences. Mark Anderson, managing director property and international, said: “We are pleased to say guten tag to Hamburg and this opening is a further step towards achieving our ambitious German expansion plans. Hamburg is an incredibly vibrant destination and we hope Premier Inn will set the city’s new standard for value accommodation.” At its capital markets day earlier this month, Whitbread chief executive Alison Brittain said the company would accelerate its expansion to at least 60,000 rooms in Germany through organic growth and further bolt-on acquisitions. The company is also targeting more than 110,000 rooms in the UK.

London-based coffee concept Over Under to ‘flip’ Earl’s Court store into cocktail bar for evening offering: London-based coffee concept Over Under is to expand the offering at its Earl’s Court store into the evening. It will be business as usual during the day, serving coffee, breakfast and lunch, but the venue will “flip” into neighbourhood cocktail bar Over By Day Under By Night after the coffee shop closes. Working with BCI Studio, the “flip” has been designed to alter every element of space and furniture from day to night. Table tops will turn over to showcase a different material on the underside, while the bar cabinet will become a stage, displaying spirits on an illuminated backing. The coffee machine will disappear behind curtains. Walls that display local artwork by day will be covered by a hidden door that will reveal an “eclipse light feature accentuating the emotion of going into the night”. Opening in the summer, the bar will also host “cafe sessions showcasing emerging creatives”. Over Under founder Ed Barry said: “By utilising our space in the evenings, we’ll have the opportunity to provide well-priced and creative drinks to the same loyal customers we have in the day, extending those good vibes through the evening.” Barry launched Over Under in 2017. Its other site is in West Brompton, while it also offers “tailored pop-ups”.

Camden’s Koko to undergo £40m transformation into multi-media venue combining music, food and entertainment: Independent music venue Koko, based in Camden, north London, is to undergo a £40m transformation into a “360-degree experience”. Redevelopment of the site in Camden High Street will include the acquisition of two adjacent buildings and renovation of the rooftop area, adding more than 20,000 square feet of space. Koko is set to reopen in spring 2020 as a multi-media venue combining music, food and entertainment. The new-look venue will comprise six live performance areas, a radio station and broadcast studio, three restaurants, a rooftop conservatory and terrace, an “immersive retail experience” and a penthouse rehearsal and recording studio. Launched in 2004, Koko has hosted album launches by Coldplay and live performances by Prince and Amy Winehouse. In its previous incarnation as the Camden Hippodrome, the venue hosted shows by The Rolling Stones, The Clash and Madonna’s debut UK show. In an earlier iteration, the BBC used the building to film The Goon Show. Koko owner Olly Bengough said: “We can see our audience wants a 360-degree experience and it’s our duty to deliver that. This isn’t just about offering a music venue. In the Camden spirit of independence and eccentricity, we want to offer an unrivalled experience. London is a forward-facing city – where we lead, the world follows. Why don’t we show the world we can have the most exciting music and hospitality brand in the city?” Koko will hold a closing party on Tuesday (5 March).

Welwyn Garden City shopping parade which houses Zizzi restaurant on market for £5.6m: A mixed-use parade in Welwyn Garden City, Hertfordshire, which is let to eight tenants including a restaurant operated by Azzurri Group-owned Zizzi, has gone on the market for offers in excess of £5.6m. The parade in Howardsgate, which also contains four residential apartments, is being marketed through agent Allsop and produces an annual rental income of £406,450. The weighted average unexpired lease term is 8.2 years to expiry, and 5.9 years to break. The price reflects a net initial yield of 7.36% after purchaser’s costs of 6.61%.

GG Hospitality closes standalone Cafe Football site at Westfield Stratford as it focuses on hotel chain: GG Hospitality, which is co-owned by former Manchester United stars Gary Neville and Ryan Giggs, has closed its standalone Cafe Football site at Westfield Stratford as it focuses on its hotel chain, Hotel Football. Giggs and Neville opened the venue in December 2013 but the restaurant, which screened live matches and offered football-themed food, has now closed. GG Hospitality chief executive Winston Zahra told the Newham Recorder: “Cafe Football in Westfield Stratford has closed in line with our strategy of not operating standalone cafes and focusing on the growth of our hotel business. Cafe Football in future will form an integral part of the Hotel Football food and beverage offering.” Earlier this week, Hotel Football signed a partnership agreement with Marriott International’s independent hotel brand Tribute Portfolio. The deal gives Hotel Football access to Marriott Bonvoy members and enables it to use Tribute Portfolio’s booking tools.

Health and fitness delivery brand Gym Food extends £350,000 fund-raise but ‘close to deal outside Crowdcube platform’: London-based health and fitness delivery brand Gym Food has extended its £350,000 fund-raise on crowdfunding platform Crowdcube to open three dark kitchens but has said it is “close to a deal” outside the platform that could cause it to “close the fund early”. The company, founded by managing director George L Streatfield, is offering 16.67% equity in return for investment, giving the company a pre-money valuation of £1.75m. So far, 132 investors have pledged £230,920 with 28 days remaining following the extension. The company operates a dark kitchen in Bethnal Green that is averaging sales of £23,000 a week. The company said it saw 278% organic growth from November 2017 to November 2018. Streatfield said: “Our campaign got off to a difficult start. We launched at the beginning of January, a slow time for investment on the platform, experienced delays in EIS Advanced Assurance and a few of our core investors came in later than expected. That being said, after a difficult start we’ve now begun to gather some real momentum and are very excited about the coming weeks. We are still in talks with a number of investors, which could see us reach our target. We are also close to a deal outside the Crowdcube platform, which may cause us to close the fund early.”

Wrapchic franchisee eyes three more sites as second outlet opens: MKC Enterprise has opened its second franchise of fusion fast food business Wrapchic and is eyeing three more outlets. MKC Enterprise, which is owned by Gitesh Adeshara, Tripti Rao and Komal Patel, has opened the site in Redditch, Worcestershire. The partners, who opened their first Wrapchic at Resorts World Birmingham in December, have drawn on a five-figure finance facility to transform each premises. They hope to expand their franchising business by opening three Wrapchic restaurants in the Midlands in the next two years. Adeshara told Insider Media: “We are excited about the future of our franchising business. Wrapchic has a great business model and, thanks to the support of HSBC, we can start to look forward and develop our portfolio of Wrapchic franchises.”

Domino’s Pizza Poland shareholders approve £5.3m fund-raise: Shareholders at Domino’s Pizza Poland have approved the company’s proposed share placing to raise £5.3m to support sales and marketing activity and its store roll-out. As a result, shareholders have granted the company’s directors authority to allot and issue 96,666,666 new ordinary shares of 0.5 pence each in the capital of the company for cash on a non-pre-emptive basis. Following admission, the issued share capital of the company will comprise 249,488,797 ordinary shares. Domino’s Pizza Poland currently operates 64 sites. Chief executive Peter Shaw, who has led the business since 2010 shortly after it secured the master franchise agreement for Domino’s Pizza in Poland, will step down in June. Pending a further appointment reflecting the group’s priorities in this area, Nick Donaldson, non-executive chairman, and Rob Morrish, non-executive director, will take a more active role in running the business.

Indo-Chinese concept Fatt Pundit to launch in Soho: Indo-Chinese concept Fatt Pundit is to launch in Berwick Street, Soho, this spring. The name is a combination of common Chinese surname Fatt and Indian word “pundit”, which means scholar. The 60-cover restaurant will feature exposed concrete walls, street signs and murals. Indo-Chinese cuisine was created when Hakka people migrated to India from the Chinese province of Canton, combining traditional Chinese cooking techniques with the spices of India. Fatt Pundit’s signature dish is momos (Tibetan spicy dumplings with added meat and vegetarian fillings accompanied by chutney). The restaurant will feature a momo station at the front, while other signature dishes will include shredded chilli venison, and stir-fried cod and bream curry. The drinks list will focus on cocktails inspired by Indian fruit vendors.

JD Wetherspoon publishes biggest edition of company magazine: JD Wetherspoon has published the biggest issue of its company magazine, Wetherspoon News. The spring edition has 116 pages of news and features. The magazine, which started as an eight-pager in 1991, is distributed to all Wetherspoon pubs and has a readership of two million. It has been written and edited by Eddie Gershon from its inception. Wetherspoon News is published four times a year. In addition, a standalone Ireland edition for its pubs in Northern Ireland and the Republic of Ireland is published four times a year and a Scottish edition and Welsh edition are published in alternate years.

Channel 4 to cover hotelier’s transformation of North Wales country house: Jagel Enterprises director Jane Harris has reopened Plas Maenan Country House in Conwy Valley, North Wales. The Edwardian hotel offers views of Conwy Valley and Snowdonia. Refurbishment work has included restoring parquet flooring, while a gin, fizz and cocktail bar will open in the spring. The bedroom count will also be increased from seven to 12 to cater for a weddings offer by September. As a newcomer to the industry, Harris’ journey on operating a hotel for the first time is being filmed for a Channel 4 documentary. She said: “I have been busy sourcing local suppliers, farms and bakeries for our food and afternoon tea offer, all of which is being documented for Channel 4.” Lesley Watmough, of Fleurets, who brokered the sale, added: “The hotel has wonderful views as well as superb grounds and I was aware Jane was looking for a stunning location where she could develop a business.”

Diageo launches partial tender offer as it looks to increase stake in Chinese baiju-maker: Diageo has launched a partial tender offer as it bids to increase its stake in Chinese baiju-maker Sichuan Shujingfang Company to 70%. Diageo currently has a 60% stake in Sichuan Shujingfang Company. The partial tender offer has been priced at 45.00 Chinese yuan a share ($6.73) and will run from Tuesday (5 March) to Wednesday, 3 April. The maximum number of shares subject to the offer is 48.6 million, Diageo said. Earlier this week, Diageo said it had approached the Chinese company with a proposal to increase its stake. Baiju literally translates as “white alcohol” or liquor.

Boxpark appoints Zonal as technology partner: Boxpark has appointed hospitality management solutions company Zonal as its technology partner. Its latest venture at Wembley Park, which spans 50,000 square feet of street food and leisure space and attracts up to 10,000 people a day, will be the first of its three sites to install Zonal’s Aztec EPOS system. Boxpark’s sites in Shoreditch and Croydon will follow later in the year. With plans to open another 12 locations across the UK, Boxpark said it was looking for a technology provider that could “flex and grow with the business” while providing a “stable and secure solution that could cope with high levels of footfall”. Boxpark operations manager Ben McLaughlin said: “We are already serving more people at a faster rate as we only accept card and contactless payments, helping us build sales and customer satisfaction levels without having to increase our 50-strong staff.” Zonal sales director Tim Chapman added: “It has been exciting for the Zonal project team to work with such an innovative pop-up concept.”

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