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Morning Briefing for pub, restaurant and food wervice operators

Thu 21st Mar 2019 - Propel Thursday News Briefing

Story of the Day:

Junkyard Golf reviews its options: Crazy golf operator Junkyard Golf has appointed advisors to review options for its next stage of growth, which could include a sale of the five-strong business, Propel has learned. It is understood the company, which was initially launched by Chris Legh, Bart Murphy, Lyndon Higginson and Mat Lakes as a pop-up in Manchester in 2015, has appointed Clearwater International to aid in the process. It is thought Junkyard Golf is set to post full-year turnover of circa £12m to the end of March from its four mature sites. The four directors remain sole owners and have so far funded the growth themselves. It is thought Lakes plans to stay on with the business but the other three could sell the majority of their stakes, which would make the company attractive to private equity, especially in a part of the market – competitive socialising – that is currently in growth. Junkyard Golf operates five sites – in London (Old Truman Brewery, Brick Lane), Manchester (First Street), Oxford (Westgate Shopping Centre), Liverpool (Liverpool ONE) and Leeds (The Light). Its most recent opening was a 17,000 square foot site in Liverpool ONE, which features three nine-hole courses with unusual designs – Pablo, a “polluted paradise”; Gary, a “scrapyard disco”; and Bozo, a “dystopian fairground”. All courses include unusual props constructed from reclaimed and reworked items. The venue also has four bars dotted around the golf courses offering cocktails such as Post Melone and Hotline Ting. The main bunker offers fairground treats, including hotdogs and nachos. The company, which has previously spoken about launching three sites a year to have ten operating by the end of 2020, has lined up an opening at 88 Worship Street in the Broadgate Quarter development, Hackney. This will see the group move out of its Old Truman Brewery site into a unit with a longer-term lease. Rival competitive socialising concepts Swingers and Flight Club both recently secured private equity backing.

Industry News:

Propel insights editor Mark Wingett to look at what the future might hold for Tasty: Propel insights editor Mark Wingett will look at what the future might hold for Wildwood operator Tasty in his latest opinion piece, which will be sent to Propel Premium subscribers on Friday (22 March) at 5pm. On the same day, subscribers will also receive a 30-minute video in which JD Wetherspoon founder Tim Martin talks to Paul Charity about the eight business books that have shaped his business philosophy. Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, access to our database of 1,300 multi-site companies, discounts to attend Propel conferences and events, regular video recordings of key speakers from Propel events and conferences, and regular columns from Mark Wingett. An annual premium subscription costs £345 plus VAT for operators and £445 plus VAT for suppliers – plus £50 each for additional team members. Email

Nominations open for 2019 Operations Managers Awards: Nominations are now open for the 2019 Operations Managers Awards. The awards, now in their 24th year, recognise the skill, professionalism and flair the best operations managers bring to licensed retail businesses. Nominations are open to area managers working in managed outlets and business development managers working in leased or tenanted outlets. Awards founder Nick Bish said: “Operations managers are essential to the successful running of venues and they need to be dynamic, responsive and intuitive. The awards celebrate the valuable work they do and the unique role they play.” Nominations can be made at and close on Friday, 31 May. Up to 20 finalists will proceed to a three-day masterclass in July before panel interviews in October. The winners will be announced at a gala event later in the year.

Only A Pavement Away calls for sector support as it launches new campaigns at debut conference: Industry-led charity Only A Pavement Away (OAPA) has called for sector support for two new campaigns to help the homeless. Summer Sips will provide every rough sleeper with a bottle of water every night for 12 weeks during the summer. The bottles will carry the OAPA logo to raise awareness of the charity. For the other campaign, Winter Warmers, OAPA is asking companies to donate sleeping bags, blankets and good-quality coats that will be distributed to homeless charities around the country during winter. The campaigns were unveiled at the inaugural OAPA conference, which took place in Covent Garden’s H Club this week. More than 150 people attended representing charities and organisations associated with the homeless, vulnerable veterans, ex-offenders and disenfranchised youngsters, as well as hospitality businesses and leaders. Brewpub group Brewhouse & Kitchen; PubLove, the London-based pub company that houses backpacker hostels and serves its own “burger craft” food; and London pub retailer Young’s were among companies that described the success they have had recruiting employees though OAPA. The charity was founded by Greg Mangham last year to help the homeless, former offenders and ex-service personnel find employment in the hospitality industry.  

Company News:

YO! seeks to consolidate restaurant estate: YO! Sushi, the Mayfair Equity Partners-backed group, has placed a package of six UK sites on the market as it looks to consolidate its restaurant estate and further pivot towards becoming a multi-channel, multi-platform business. Propel has learned the Richard Hodgson-led group has appointed property advisor GCW to market its sites in Aberdeen Bon Accord, Bath, Chelmsford, Glasgow Fort, Oxford and in the Whiteley Shopping Centre, Hampshire. The company, which operates circa 70 sites in the UK, has already closed the sites in Aberdeen, Bath and Oxford. During the past 18 months the company has moved to diversify its business model by acquiring Bento Sushi, one of the largest sushi brands in North America, and leading wholesaler Taiko to meet growing demand for sushi via restaurants, kiosks and supermarkets. A YO! Sushi spokesman said: “As is normal with a large and established brand, we continually review our estate to make sure we have the best proposition in the right site and right location. In line with the wider company strategy to focus on building a multi-brand, multi-platform business, we have decided to consolidate parts of the current restaurant estate, including these six restaurants.” Late last year, YO! agreed a deal with Tesco to pilot YO! To Go counters at two UK stores. The first two trial sites are in the Sunbury Extra store in Surrey and the Bournemouth Extra store.

Ten Entertainment Group to improve F&B by tailoring offer, developing ‘department stores of entertainment’: Ten Entertainment Group chief executive Duncan Garrood has told Propel he is looking to improve his company’s food and beverage offer by tailoring it to each site’s location. Food and drink makes up more than one-quarter (26%) of the company’s sales and Garrood, who joined from Bill’s in December, wants to change the current “national” approach with a more “local feel” to resonate with customers. His plans include introducing products such as Tennent’s lager to its Scottish sites and a wider range of cider in the West Country. He added: “Our food and beverage offer is standardised and I’m looking to change that. We don’t have a proper range of Asian flavours, halal or vegan options so there are opportunities around that as well. We’re not trying to turn into a restaurant business – that’s not why people come to us – but they do expect an offer that’s good value for money.” The company is also trialling escape rooms at its Southampton sites and a technology-based darts game at its Star City site in Birmingham that features an automated scoring system. Garrood said it was part of a strategy to establish what he called “department stores of entertainment” but he said bowling and the associated food and beverage offer would remain anchor parts of the business. He added: “We have what I call a third space we can change according to trends and give people another reason to visit our centres. We’re excited about these trials and will continue to monitor their progress this year. Ten Entertainment Group has also launched a bowling format – Hyperbowl – at Star City, aimed at families. It is based around an interactive bumper system where lights on the bumpers create moving targets that players aim to hit or avoid before hitting the pins. The score is multiplied depending on the colour a bowler hits. It is designed on the principle it “plays like a video game on a bowling lane”. Garrood said: “There hasn’t really been innovation in bowling since Fred Flintstone went! I liken it to Twenty20 cricket in that it’s played on the same pitch with the same number of players but with different rules. Hyperbowl is great for families because the bumpers level out the skillset and I think it will attract a whole new audience to our centres.”

Administrators bring Authentic Alehouses portfolio to market: Leeds-based Authentic Alehouses, which entered administration earlier this month, has brought its portfolio of seven freehold pubs to market. The pubs, located across north east and north west England, have been put up for sale by joint administrators Simon Bonney and Michael Kielyon, of Quantuma. The pubs are The Albert Hotel in Hull, the Countess of Rosse in Shipley, the Crown Inn in Addingham, The Fountain Inn in Barnoldswick, The Ponty Tavern in Pontefract, The Red Lion in Driffield, and The Wakey Tavern in Wakefield. The Red Lion, The Wakey Tavern and the Crown are currently closed for refurbishment, while the others are trading. Neil Morgan, managing director – pubs and restaurants at Christie & Co, which is handling the sale, said: “We expect to receive strong interest from a range of buyers, including regional operators looking to strengthen their portfolio or investors looking to create a presence in the north.” Offers are invited for the freehold interest of the portfolio, with offers for sub-groups or individual pubs also considered. The deadline for all bids is midday on Monday, 15 April. The Allan Harper-led pub group entered administration despite raising £6.4m in peer-to-peer loans via Crowdstacker. Harper also led Burning Night Group, which went into administration in October after raising £7.5m on the same platform. On Christmas Eve, Burning Night Group was bought out of administration by a special purpose vehicle created by turnaround specialist Access Commercial Finance, which was a secured creditor of Burning Night Group. The deal saved more than 300 jobs.

Starbucks picks London as part of recyclable cup trial, investing $100m in retail startups: Starbucks has chosen London to trial new cups that can be recycled or composted as part of a pilot in several global markets. The move was announced at Starbucks’ annual general meeting in which chief executive Kevin Johnson set out his vision to build an “enduring company”. Starbucks customers in New York, San Francisco, Seattle, Vancouver and London will test a number of cups, both recyclable and compostable, which will be produced by the NextGen Cup Challenge winners announced earlier this month. As well as the greener cups, Starbucks will roll out recyclable strawless lids in the US and Canada. Starbucks has also unveiled a feature for its app that shows its coffee’s journey from bean to cup. Johnson said: “We are reimagining the future for Starbucks, and the more than 30,000 communities we serve each day, with a great sense of responsibility for a more sustainable planet.” Johnson also announced the company would invest $100m in Valor Siren Ventures, a new venture fund led by private equity firm Valor Equity Partners. The fund will serve as an incubator for the next generation of food and retail technology startups, while Starbucks will seek to raise an additional $300m from other investors and key partners in the coming months. This is the first time Starbucks has made this type of investment as it aims to support new ideas in food technology and retail products and explores commercial partnerships with retail startup companies.

Mosaic to launch darts concept: Mosaic Pub and Dining is to launch a darts bar in Birmingham’s Jewellery Quarter. The Mosaic companies, led by James Watson and Peter McDonald, will open 180 Club in St Paul’s Square next month. It will house six oches, including a private room, and be able to host 14 players per oche. The launch follows the group’s acquisition of The Rectory last September alongside two other Birmingham pubs for a total of £1.3m. Aiming to attract a new demographic to darts, 180 Club will also offer sharer cocktails and New York-style snacks. McDonald told The Business Desk: “This is a new concept for Birmingham as well as Mosaic Pub and Dining but we know this underground darts experience will work and we’re proud Birmingham is going to be our pioneer city. Since our acquisition of three pubs last summer we now have six sites in the city, all of them thriving, so it was a no-brainer to choose Birmingham as the location for the first 180 Club. The concept is simple. We’re making darts cool, bringing the fast-paced competitive nature of the sport into the 21st century and giving consumers a great experience. The experiential bar scene is becoming increasingly important and this is the next step in our dedication to giving Mosaic Pub and Dining venues a point of difference.” The Rectory adds to Mosaic Pub and Dining’s other venues in the city – The Button Factory, The Distillery, Frederick Street Townhouse, Queens Arms, and The Florence. Last month, Mosaic Pub and Dining added three London sites to its portfolio, taking its total to 24.

Brunning & Price builds pipeline, secures Kew Bridge Cafe Rouge site: Brunning & Price, The Restaurant Group (TRG)-owned pub business, has secured three sites for its 2019 openings pipeline, including the former Cafe Rouge near Kew Bridge. The company, which opened 21 sites in 2018 including the acquisition of Ribble Valley Inns and Food & Fuel, will open the Plough & Harrow in the Malvern Hills and The Roe Deer near Kidderminster this summer. At the same time, the business is understood to have acquired the former Cafe Rouge at Strand-On-The-Green, Chiswick. It is thought this site might eventually come under the Food & Fuel banner. At its full-year trading update last week, TRG said its six single-site Brunning & Price acquisitions were trading well and it expects at least seven openings for 2019. It stated: “We have now refurbished three of the Ribble Valley sites and these are delivering a sales uplift in excess of 30% post refurbishment. The Food & Fuel sites are trading in line with expectations and plans are in place to further develop these propositions through 2019.” The company’s pubs business has a freehold asset base in excess of £90m.

Cambscuisine to launch sandwich shop and bar concept: Pub and restaurant operator Cambscuisine, led by Oliver Thain and Max Freeman, is launching a concept that operates as a sandwich shop during the day and a bar in the evening, Propel has learned. The company will open the venture in a former hairdresser’s next to its Smokeworks site in Bene’t Street. Cambscuisine is investing £300,000 in the vacant unit. The basement will be converted into additional restaurant space that will be accessed via the existing premises, adding an additional 20 covers. The ground floor will house the new concept, which will launch next month. It will have 24 covers and serve wraps and coffee during the day before turning into a bar offering beer and cocktails. Thain told Propel: “The existing restaurant is very busy and we were turning people away so we decided to add some extra space – but then we had this empty area above and decided to develop it into a sandwich shop and bar. It’s a new concept for us and will allow us to take advantage of the lunchtime trade. Bene’t Street is one of the key thoroughfares so it should be busy. We think it could add an extra £550,000 net to the business without needing to add a general manager or kitchen. We’ll further improve our coffee, cocktails and keg beer to bring some other skills and products into the business.” Thain said if the wraps prove a success he would look to add them as a menu item at other sites. Cambscuisine’s portfolio consists of two Smokeworks, two Chop Houses, modern brasserie Millworks and four country pub restaurants. Last year, the company raised £750,000 on online investing website SyndicateRoom for expansion. 

Villandry creditors awaiting outcome of lease assignment negotiations to see if they will receive distribution: Creditors of Villandry, the restaurant chain run by former Le Pain Quotidien director Philippe Le Roux that went into administration last year, are awaiting the outcome of “ongoing negotiations” on the assignment of one of the company’s leases to find out if they will receive a distribution. A progress report by administrators Martha Thompson and Sarah Rayment, of BDO, filed at Companies House, said progress was being made but further information would be provided in the next update so as not to prejudice discussions. The administrators added they “continued to explore” whether there was any interest in the company’s brand and other intellectual property assets. As previously reported, secured creditor Santander is owed £1.1m and the administrators predict there would be a “significant shortfall”. The latest report showed £7,013,243 of unsecured creditors’ claims have been received to date, which exclude employee claims. It is thought there will be insufficient asset realisations to enable a distribution. Preferential creditor claims are estimated at £100,000, with the total received to date £15,709. Villandry went into administration after Le Roux was unable to secure investment and had accumulated losses of £7.3m. Le Roux acquired Villandry in 2011 with backing from big City of London names including Finsbury PR chief Roland Rudd, BAE Systems chairman Sir Roger Carr and former Standard Chartered chairman Lord Davies.

BrewBroker to launch in US: BrewBroker, an online market place for the global brewing industry, is set to launch its platform in the US. BrewBroker, which currently works with 400-plus traders in Britain and Europe, will begin rolling out its transatlantic platform from April. Kicking off the launch at the Craft Brewers Conference in Denver, BrewBroker will become one of the first of its kind to provide solutions to the US and UK brewing markets on such a large scale. The business will also look to provide in-country solutions for the US brewing industry in the coming months. BrewBroker’s aim is to enable businesses to search, sell and buy brewing services from each other. The company is set to invest more than £400,000 in the platform’s functionality, with the addition of multiple languages, new currencies and even tax calculations. Co-founder and chief executive Daniel Rowntree said: “We are so excited to launch in America and can’t wait to show people how powerful our platform is. We have aspired to be able to facilitate transatlantic brewing and our most recent investment is a bold step towards making that dream a reality. America is widely considered the home of craft beer so it’s great to be taking our platform to the roots of our sector.” Ben Morgan-Smith, chief technical officer and co-founder, added: “From inception, BrewBroker has always aimed to make its platform international. We are keen to further support our global buyers and suppliers with functionality designed around their needs.”

Tortilla secures Southwark site for ‘Baby’ concept: Tortilla, the Quilvest-backed restaurant group, has secured a site in Southwark for its “Baby” concept. The company will open the venue in The Cut, opposite Southwark tube station. The unit spans 1,100 square feet across basement and ground floor, with space for 32 covers. The first Baby venue opened in Putney in November 2017. Tortilla, which has 36 sites and is led by Richard Morris, recently reported record sales in 2018, with like-for-likes up 6%. Property director Rob Lucy said: “2018 was a good year for Tortilla and we are excited to continue this momentum with a number of openings in 2019.” Tortilla has started planning its next stage of growth by appointing advisors to help set a roadmap for the business in the next 12 to 18 months, which could lead to a sale. The company, which Quilvest has backed since 2012, has started working with advisors at Spayne Lindsay to determine the best strategy for its long-term future. It is understood discussions on those options are at an early stage and talk of an imminent sales process are wide of the mark. The company expects to open six sites in 2019. Shelley Sandzer acted for Tortilla on the latest Southwark deal and recently concluded rent reviews for Tortilla at its sites in Westfield Stratford, Islington, Bankside, Brighton and Canary Wharf. It is also instructed at various locations across the capital, including Clapham, Camden and Market Place.

Crate Brewery passes halfway mark in £500,000 crowdfunding campaign to incorporate Silo in London: London-based Crate Brewery has passed the halfway mark in its £500,000 campaign on crowdfunding platform Crowdcube to fund a major refurbishment of its Hackney Wick home that would also see zero-waste Brighton restaurant Silo brought to the capital. Crate’s founders, brothers Tom and Jess Seaton and Neil Hinchley, are offering 4.0% equity in return for investment giving the company a pre-money valuation of £12m. So far, 485 investors have pledged £253,120 with 15 days remaining. Part of the refurbishment of The White Building would see the team develop a restaurant space with Silo founder Doug McMaster, who would also host workshops in a new space next to the restaurant alongside talks on food, beer, art and culture. The pitch states: “We started life in July 2012 with a dream of creating the ultimate craft beer and food experience. We opened Crate, a micro-brewery and pizzeria. We now have the chance to turn our space into a mecca for craft beer fans and a hub for creativity. Your investment will allow us to add a brewery for experimentation and innovation; open a restaurant with dishes inspired by new culinary thinking; open an events space and launch a year-round programme of cultural events; transform our taproom from 4,000 to 8,000 square feet; and build 1,000 square feet of affordable workspace to act as an incubator for talent. Crate achieved £3.95m turnover in FY2018 with an Ebitda of £88,000. We recently invested in sales and marketing heads and extended the lease on our venue, the White Building, to set the foundations for growth.”

Warrington-based multi-site operator takes on third Star Pubs & Bars venue: Warrington-based multi-site operator Mark Condliffe has taken on his third venue with Heineken-owned Star Pubs & Bars. Condliffe has acquired The Red Lion in Moore. Star Pubs & Bars is investing £240,000 with Condliffe and his business partner Neil Roughshedge in a major upgrade of the pub. Condliffe’s other Star Pubs & Bars sites are The Farmer’s Arms in Fearnhead and the Hatton Arms in Hatton. The Red Lion will undergo a five-week refurbishment, with unused barns and a south-facing courtyard transformed into a 70-cover, all-weather dining area with fire pit and outdoor grill. Inside, two dining areas will be created to bring internal covers to 70. Condliffe said: “The Red Lion is the only pub in the village. It needed investment to bring it up to date and make it more inviting.” David Pritchard, regional operations director for Star Pubs & Bars added: “The investment will take The Red Lion to a new level and make it stand out from other pubs in the area. We’ve worked with Mark and Neil for many years and we’re delighted they are taking on The Red Lion.”

Linda Lee brings On The Bab to Soho: Restaurateur Linda Lee has brought her Korean brand On The Bab to Soho following its relocation from Marylebone. On The Bab Soho has replaced Lee’s Mee Market in Archer Street. It is substantially larger than the Marylebone site and offers eat-in and takeaway options. The site also offers a new dish, Dooboo Bab, which is tofu cooked in spicy gochujang sauce with Asian vegetables. Lee said: “The lease was up on our little site in Marylebone Lane and relocating On The Bab to my larger premises in Soho means we continue to have a presence in W1.” On The Bab’s other locations are in Covent Garden, Shoreditch and St Paul’s. On The Bab will open in Rue Thérèse, Paris, in May as Lee’s debut overseas restaurant. She also owns fine-dining Korean barbecue restaurant Koba in Fitzrovia.

Adil Group to open second Taco Bell site in Glasgow next month: Franchisee The Adil Group is to continue its expansion of Mexican restaurant brand Taco Bell in Scotland by opening its second restaurant in Glasgow, next month. The 85-cover venue will launch in Argyle Street on Saturday, 6 April and offer a takeaway service. The Adil Group plans to open more than ten restaurants in Scotland by 2023, with some sites already acquired. It will be the 38th Taco Bell restaurant in the UK. Taco Bell UK brand manager Lucy Dee said: “Following the success of the first Glasgow opening in December 2017, we’re pleased to be opening another restaurant in the area. Argyle Street has high footfall with people looking for entertainment and, of course, a bite to eat, providing us with the perfect spot to expand our portfolio.” The Adil Group submitted plans last month to open a Taco Bell drive-thru in Greenock for its third Scottish site. Launched in the US, there are more than 425 Taco Bell outlets across 27 markets outside its home market, with the company aiming to expand the brand’s international presence to 9,000 restaurants by 2022.

Staycity to open its first resort-style property, near Paris in August: Aparthotel operator Staycity will open its first resort-style property, in August. Staycity Aparthotels Paris, Marne-la-Vallée will comprise 284 apartments, 22 holiday villas, an outdoor swimming pool, cafe, restaurant and gardens. The new-build property will offer studio and one-bed apartments as well as 12 four-bed villas and ten five-bed villas. The venue, the company’s second in the Paris area, is a ten-minute drive from Disneyland Paris and will offer a free shuttle bus to the attraction. Staycity chief executive and co-founder Tom Walsh said: “Marne-la-Vallée will particularly appeal to leisure guests and the villas will be popular with families or groups of friends, although our guest profile is still expected to be 20% to 30% corporate business.” Staycity, which has 7,000 apartments operational and in the pipeline across Europe, will open properties in Berlin, Venice, Edinburgh and Manchester this year. Staycity operates under the Staycity Aparthotels brand and its premium Wilde Aparthotels by Staycity brand. The group’s growth target is to reach 15,000 apartments by the end of 2023.

Canterbury-based hotel operator puts two sites on market: Canterbury-based hotel operator Lynda Desmarais has put her two sites in the city on the market. The Canterbury and Castle House hotels are available to buy on a joint or individual basis through agent Colliers International. The Canterbury Hotel is thought to be one of the oldest of its kind in the city. It has 15 bedrooms with offers in the region of £1.55m sought. The Castle Hotel dates to the 1730s and also has 15 bedrooms. Offers of £1.75m are being sought. Desmarais told Insider Media: “It has been a difficult decision to sell, particularly Castle House as it was my first hotel. Alongside our hard-working teams we have thoroughly enjoyed establishing the Castle House and Canterbury as two of the finest hotels in Canterbury.”

Stratford-upon-Avon-based distillery expands after relocating: Stratford-upon-Avon-based distillery Shakespeare has expanded after relocating to a new base. The company has moved to its new home in Drayton Manor Drive, which is larger than its predecessor on Alscot Estate. It has also expanded production after installing a new still, while tours will be offered alongside a gin school. Director Peter Monks told Insider Media: “As the popularity of gin continues to rise, we’ll look to keep at the front of the trend with our distillery tours and experiences.”

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