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Wed 26th Jun 2019 - Propel Wednesday News Briefing

Story of the Day:

Bridgepoint makes ‘significant investment’ in Market Halls: Bridgepoint Growth has confirmed making a “significant investment” in food hall operator Market Halls. Last month it was reported Market Halls, which operates venues in Fulham and Victoria, was close to agreeing a £20m funding deal with private equity firm Bridgepoint to accelerate its growth plans. The new funding will support the company’s plans to roll out sites in metropolitan and shopping centre locations nationwide. This year Market Halls will open a flagship location in London’s Oxford Street and its first out-of-town concept, The Hall, at Intu Lakeside’s new leisure development in Essex. The company plans to roll out the experience to other out-of-town shopping centres across the UK and has identified 15 opportunities similar to the Intu Lakeside deal. The company, which is led by chief executive Andy Lewis-Pratt, has also signed for a 20,000 square foot food hall at Cargo in Canary Wharf. Regarding Market Halls’ concept, Bridgepoint said: “They cater to a broad demographic and have quickly become popular with consumers who view the concept as an exciting alternative to traditional casual dining options. The food hall model is well proven in other major international markets but the UK is underpenetrated and therefore offers significant growth potential. Single-site, multi-vendor dining is a fast-emerging category globally. The popularity of multi-vendor dining is being driven by consumers seeking new dining concepts and greater choice. Bridgepoint envisages the roll-out of additional sites in London as well as a number of operational initiatives to support growth.” Lewis-Pratt said: “This is an important step in fulfilling our long-term growth ambitions.”

Industry News:

Sam Roberts to feature in next video for Propel Premium subscribers: Sam Roberts, chief executive of all-day casual dining cafe Boston Tea Party, will feature in the next 30-minute video for Propel Premium subscribers, which will be sent out on Friday (28 June). Roberts shares his learnings from the company’s ban on disposable cups and how he is prepared to stand by his principles for the good of the planet. Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, discounts to attend Propel conferences and events, regular video recordings of key speakers from Propel events and conferences, and regular columns from insights editor Mark Wingett. They also receive access to our database of multi-site companies, which has now grown to 1,400 businesses. An annual premium subscription costs £345 plus VAT for operators and £445 plus VAT for suppliers – plus £50 each for additional team members. Email anne.steele@propelinfo.com

CAMRA surveys licensees to investigate Pubs Code effectiveness: The Campaign for Real Ale (CAMRA) is surveying tenants tied to large pub-owning companies to determine whether the Pubs Code is working for them. The Pubs Code came into force in 2016 to govern the relationship between tenants and pub companies. The move followed a decade of campaigning from tenants, CAMRA and other industry groups. Since coming into force, CAMRA said it had heard a number of complaints about the effectiveness of the code. To ensure the views of affected tenants are heard, the trade body has launched the survey to coincide with the government’s review of the code, which ends in July. While targeted at tied tenants, anyone with an interest in the code can anonymously provide comments as part of the survey, which closes on Wednesday, 17 July. CAMRA national chairman Nik Antona said: “The Pubs Code Adjudicator has told us a number of times his office struggles to contact tenants directly and relies on pub companies to act as a conduit. This is clearly not an effective way to get the honest views of tenants, which is why we are going straight to the source to find out if the code is really working as intended. We’ll submit the survey results to the government. I expect the results will show what we have suspected for a long time – the Pubs Code needs some serious reform to make it fit for purpose.” To access the survey, click here

Investor appetite for UK hotels stays strong with London particularly attractive: Investor appetite in the UK hotel sector remains strong with a range of capital sources chasing a limited supply, particularly in and around London and major UK cities, according to agent Christie & Co’s half-year review of the market. The company said London assets remained particularly attractive as the city had performed better than expected since 2018 but the regions had seen negative performance in 2019 so far. Transaction values this year have been led by portfolio deals and Christie & Co forecasts enhanced activity in the second half of 2019. Despite Brexit, Christie & Co noted investors still appeared keen on the UK hotel market, with a variety of capital from international sources and private equity funds. While some deals are taking longer, overseas demand doesn’t seem to have dampened, with Israeli investors particularly active in 2019. Christie & Co said the hotel sector was becoming more innovative with operators minimising costs via automated processes such as mobile check-in and cutting staff by offering self-service breakfasts. Other operators, meanwhile, were adding to their services to justify higher rates. While costs continue to be a concern and are taking a toll on operators’ bottom lines, Christie & Co said the few hotel casualties to date didn’t appear to have been down to financial performance. Barrie Williams, managing director – hospitality at Christie & Co, said: “While the market is undoubtedly more difficult, there remains widespread investor interest and debt availability for the right hotels in desirable locations across the UK.”

European hotel industry reports strong performance in May: The European hotel industry saw growth in all three key performance metrics during May, according to data from STR. Revpar increased 4.3% year-on-year to €87.22 (£76.93), while average daily rate rose 2.9% to €116.38. Occupancy increased 1.4% to 74.9%. Data focused on two cities – Berlin and Bratislava. Berlin hotels posted record occupancy and average daily rate levels for May and have also seen 12 consecutive months of year-on-year growth in demand. Revpar climbed 15.6% to €90.37, while average daily rate was up 8.2% to €108.14. Occupancy increased 6.9% to 83.6%. STR analysts noted multiple events helped Berlin push performance levels, including the Raw Materials Summit and the 16th World Congress of the European Association For Palliative Care. In Bratislava, average daily rate jumped 83.3% to €132.15 – a record for the month of May. Revpar soared 95.9% to €102.95, while occupancy was up 6.9% to 77.9%. STR analysts attributed the market’s performance to the IIHF Ice Hockey World Championship semi-final and championship round games, which led to double-digit increases in each of the three key performance metrics.

Job of the week: COREcruitment is seeking an HR vice-president with a background in hospitality on behalf of a global retail company. The position will involve providing support and guidance to more than 20 countries across two major geographical regions, leading a team of HR directors and heads of country HR to exceed company targets, and leading a productive people function. The company concerned is reviewing policies, working practices and use of technology across the business. The position is UK-based and offers a salary of circa £180,000 to £200,000. Click here or more information or email hollie@corecruitment.com for a confidential chat.

Company News:

McDonald’s to cut Happy Meal plastic toys by 60% as it apologises for treatment of young petitioners: McDonald’s has said it will cut the number of plastic toys involved in its Happy Meal promotions by almost 60% as it issued an apology to two sisters for the way it treated their petition. Ella and Caitlin McEwan, aged nine and seven, appeared on BBC One programme War On Plastic to discuss an online petition they launched urging McDonald’s and Burger King to “think of the environment” and stop providing plastic toys. The petition on Change.org garnered more than 180,000 signatures. The sisters said they received an “automated response” when they presented it to McDonald’s, whereas Burger King told them their comments had been passed on to its management team with hopes to “make some changes in the future”. McDonald’s stated: “We would like to apologise unreservedly to Ella and Caitlin. When they wrote to us expressing their concerns about our Happy Meal plastic toys our normal process wasn’t followed. We endeavour to respond to every contact individually and personally. They should have received a proper response to their letter and petition. The way they were treated when they came to our offices was unacceptable. We are committed to listening to our customers but we failed Ella and Caitlin at every point and for that we would like to say sorry. We agree with Ella and Caitlin in recognising the reduction and use of plastics is an important issue and we are committed to reducing plastic across our business, including Happy Meal toys. The joy many families get from our Happy Meal toys isn’t something we can ignore and any changes have to be planned carefully. However, we are evolving what we offer. In the UK over the next six months our Happy Meal promotions will include a mixture of board games, books and soft toys – which will see an almost 60% reduction in the number of hard plastic toys given away in comparison with the first half of the year.”

Giggling Squid secures Jamie’s Italian in Cambridge: Giggling Squid, the 32-strong Thai restaurant brand founded by Andy and Pranee Laurillard that was placed on the market earlier this year, has further strengthened its pipeline by securing a site in Cambridge. The business has exchanged on the Jamie’s Italian site in Wheeler Street, Propel has learned. In the 12 months to April 2019, the group opened eight restaurants, including in Bishop’s Stortford, Cheltenham, Chichester, Harpenden, Kingston-upon-Thames and Windsor. In April, the company opened restaurants in Oxford and Chislehurst, with both sites trading well and to expectations. The pipeline for sites into 2019/20 is strong as Giggling Squid looks to open six to ten restaurants a year as well as embarking on a refurbishment programme of its more mature restaurants. Giggling Squid has signed for the former CAU site in Leamington Spa, which is due to open in the autumn subject to planning permission. Propel also understands Giggling Squid is close to securing a site in Weybridge. First-round bids for the BGF-backed Thai chain are due at the start of July, with CBPE, which acquired Cote for circa £100m in September 2013 before selling it in July 2015 to BC Partners for circa £250m, believed to among a group of private equity firms to have expressed an interest in investing in the business. Other names linked to the process include Piper (current backers of Turtle Bay, Hickory’s and Flat Iron), LDC (D&D London), TriSpan (Rosa’s Thai Cafe), True Capital and Active Partners (Honest Burgers, Caravan, Leon and Chick ‘n’ Sours/Chik’n). It is understood Giggling Squid, which the Laurillards founded in Hove in 2009, is valued at circa £50m. AG&G is understood to have acted on the Cambridge deal. The leasehold interests of 20 sites formerly operated by Jamie Oliver – 18 Jamie’s plus Barbecoa Piccadilly and Fifteen London – are being marketed by Christie & Co at a combined price tag of about £2.15m.

Heidi Bakery acquires coffee shop operator Caracoli: Windsor-based Heidi Bakery has acquired coffee shop operator Caracoli following a company share sale. The deal sees Heidi Bakery acquire Caracoli’s two stores – in Alresford, Hampshire, and Haslemere, Surrey. Both coffee shops will continue to trade as Caracoli. Heidi operates two stores, in Windsor and Farnham. Heidi Bakery director Rory Shanks said: “Caracoli is a natural fit. Acquiring the business allows us to get our made-from-scratch food into more markets while adding a solid brand to our portfolio. Through the acquisition we’ve also picked up two beautiful buildings in Alresford and Haslemere, great towns to add to Windsor and Farnham.” Chris Bickle, director in the licensed leisure team at Savills, who brokered the deal, said: “Both businesses were built independently and have grown organically. Under the new management, Caracoli will continue to trade as normal. We are pleased to have been involved in ushering in this new era.” Heidi Bakery made headlines recently by launching Harry’s Roly Polys in partnership with former Portsmouth manager and I’m A Celebrity winner Harry Redknapp. Gail Nichols founded Caracoli in 2005.

Damian Wawrzyniak to launch Polish kiosk concept in central London: Chef restaurateur Damian Wawrzyniak is set to launch a Polish kiosk concept in central London this year. Wawrzyniak, who operates Cambridgeshire restaurant House Of Feasts, will launch Pierogi Kiosk offering comfort food from his home country. He said two Pierogi Kiosk franchises had already been sold, while talks were ongoing with other interested parties. Wawrzyniak expects to launch Pierogi Kiosk at UK shopping centres, railway stations and markets, with the first franchises to launch in London by the end of 2019. The concept is named after a filled dumpling popular in central and eastern Europe. Pierogi can be boiled for a soft texture or pan-fried for a crispier taste. All Pierogi Kiosk dumplings will be produced by the House Of Feasts team. The concept will also offer alternative menu items such as sourdough salt beef and pastrami sandwiches. Wawrzyniak said: “Pierogi Kiosk aims to combine the convenience of fast food with authentically different cuisine that tickles the taste buds. For me, it’s always about introducing diners to Polish dishes with a British twist.” Wawrzyniak has owned modern-European restaurant House Of Feasts for more than a decade.

Papa John’s franchisees to open two Liverpool sites, acquire five further stores: Papa John’s franchisees Sukhbir Gill and Lakhwinder Singh are adding to their portfolio in the north west by opening two stores in Liverpool while they have acquired five further sites in the region. Gill and Singh have added five existing Papa John’s sites to their estate – two in Liverpool as well as in Bebington, St Helens and Warrington. Meanwhile, they are opening two stores at undisclosed locations in Liverpool. Gill said: “Our plan is to build a cluster of Papa John’s. From an operational point of view this makes complete sense. It will help focus our local marketing campaigns and means staff recruitment and training is more straightforward. We now have six stores within 30 minutes of each other. Our two new outlets have been built using Papa John’s new in-store look. The existing stores we’ve taken over will also undergo a complete refresh soon. We can also look at opening more stores locally in the near future.” Papa John’s has more than 400 sites across the UK.

Ping Pong to shutter Wembley site on Sunday: Ping Pong, the London-based dim sum chain, is to close its site at Wembley Designer Outlet Village on Sunday (30 June), Propel has learned. A company spokeswoman said: “Despite our best efforts in these uncertain trading times and with increased operating costs, it is time to say goodbye to Wembley.” Last month Ping Pong, which is led by chief executive Art Sagiryan, instructed agent Davis Coffer Lyons to market the leasehold interest in its Wembley site and another in Westfield London as the company looked to “consolidate its estate”. At the time, Davis Coffer Lyons executive director Rob Meadows said: “Ping Pong operates eight dim sum restaurants within its portfolio in the capital. The company took the decision to exit these two sites as they don’t meet their current returns on capital required. Both sites are more suited to significant daytime trading, which is not the core of the Ping Pong offering.” 

Marston’s launches first work placement scheme: Marston’s has launched its first work placement scheme. The Take 5 scheme, in partnership with Changing Education, focuses on reaching Year 10 students and provides at least one week’s in-house experience. The scheme enables pupils to experience all aspects of a pub business and understand the different roles and opportunities available. The scheme will be available all year round at participating pubs. Liam Powell, Marston’s head of HR, said: “The programme enables us to support and encourage pupils to peruse a valuable career in hospitality while providing different learning opportunities within communities.” Dean Maxfield, head of employer engagement at Changing Education, added: “This programme aims to open the eyes of students to the opportunities available to them within the hospitality industry and does so in a way unlike any we have seen before.”

Portfolio of five freehold pubs in south Lincolnshire put on the market: A portfolio of five freehold pubs in south Lincolnshire has been put up for sale. The properties, which are in and around the market town of Long Sutton, are being marketed by agent Sidney Phillips. The portfolio includes two investment properties generating rental incomes in the centre of Long Sutton. The Ship has an asking price rental yield of 11% and The Granary an asking price rental yield of 11.5%. The other three properties are Palmers Ale House & Kitchen in Long Sutton, The Rising Sun in Gedney Drove End and The Riverside in Sutton Bridge, which includes six bedrooms. The asking prices are £495,000 for The Ship, £475,000 for Palmers Ale House & Kitchen, £450,000 for The Granary, £370,000 for The Riverside and £265,000 for The Rising Sun. Zaine Lamont, of Sidney Phillips, who is handling the sale, said: “This portfolio of five freehold properties is available to purchase individually or as a group. It includes two investment properties that return superb yields, which are difficult to find in south Lincolnshire. We envision strong interest.”

Levi Roots closes Caribbean Smokehouse: Chef and Reggae Reggae Sauce founder Levi Roots has closed his restaurant in Westfield Stratford. Roots has shut Levi Roots Caribbean Smokehouse, which he opened at the east London complex in partnership with Las Iguanas co-founder Eren Ali in December 2015. Announcing the closure on Twitter, Roots said: “So sorry! Unfortunately I have to announce my restaurant has closed. The most dreadful thing is letting down my brilliant team. I tried my uttermost to avoid this but the party is over and all good things come to an end. So sorry to the customers too.” Roots shot to fame after an appearance on television series Dragons’ Den in 2007, which propelled his Reggae Reggae Sauce business to an annual turnover of £30m within eight years. 

Harrods opens new-look food hall: Renowned London department store Harrods has opened its new-look food hall following a two-year, multimillion-pound redesign. The hall features a sushi bar headed by Eddie Lim, owner of Thai concept Mango Tree, which operates a restaurant at Harrods and another in Belgravia. Lim also launched Asian street food concept Bao Kitchen in Harrods recently. Kama by Vineet is a 26-cover restaurant by Michelin-starred chef Vineet Bhatia offering modern versions of Indian classics and curries. The wine bar offers more than 100 varieties by the glass alongside bar snacks and caviar. Guests can also use an iPad to order one of more than 1,000 bottles from the wine and spirits department. The pasta bar offers fresh pasta with seasonal sauces and Italian classics, while the fish bar features ethically caught seafood from Harrods’ fresh market hall alongside gin, champagne and cider. Meanwhile, the grill offers rotisserie dishes, seasonal game, steak cooked to order over a charcoal grill and sides such as truffle mac ‘n’ cheese, Hot Dinners reports. The relaunch follows Harrods’ revamp of its wine department, bake hall and fresh market hall.

Lakes Distillery secures £3.75m investment as it eyes stock market float: Cumbrian-based The Lakes Distillery has secured £3.75m in growth funding as it continues to eye a stock market float. The distillery, which is within the Lake District National Park, operates as a tourist destination while exporting gin, whisky, vodka and liqueur across the world. The funding will be used to support growth, increase production capacity and improve the distillery experience. AIM-listed investment company Gresham House Strategic structured and led the investment, providing £2.1m of funding, supported by the LF Gresham House UK Multi Cap Income Fund and other co-investors. Funding has been provided through a secured convertible loan note, structured to provide an 8% cash yield and further fixed return through payment in kind. It will convert to equity on a successful flotation. The Lakes Distillery chief executive Nigel Mills said: “We are delighted about the opportunities this investment opens up. We’ve been on an incredible journey so far and Gresham House’s investment will allow us to take the business to the next level, grow production capacity and build our brand globally.” Graham Bird, lead fund manager at Gresham House Strategic, added: “The Lakes Distillery has an impressive and experienced management team led by Nigel Mills as well as an excellent track record in its field. With ambitions to float the business in two to three years’ time, this fits our mandate well for supporting pre-IPO companies as well as highlighting our ability to complete innovative deals that provide attractive, risk-appropriate returns.” The Lakes Distillery raised £1.75m on crowdfunding platform Crowdcube last year for expansion.

Infla Nation plans double Midlands launch: Southport-based inflatable theme park company Infla Nation is to launch two sites in the Midlands this summer. Owners Matt and Michelle Ball will open the venues at Astle Retail Park in West Bromwich and the Telford Centre in Telford in August. The West Bromwich site will feature a “super slide” arena with Inflata’s largest amount of slides to date, while the Telford venue will feature inflatable bumper cars and electric buggies in their own “demolition” arena. Matt Ball told The Business Desk: “We are strongly represented in the north of England and Scotland and now we’re expanding rapidly in the Midlands. Each centre is slightly different in design, showing Inflata Nation is constantly looking to evolve and entertain in new ways.” The Balls launched trampoline parks under the name Jump Nation in 2014, switching to the Inflata Nation format to negotiate what was becoming a crowded market. Its first inflatable theme park opened in Manchester and it has since launched venues in Beverley, Birmingham, Glasgow, Newcastle and Runcorn. The company said it was also formalising an international franchise, with plans to expand abroad next year. If the rate of expansion is realised, Inflata Nation projects a turnover of more than £16m by the end of 2020.

Gordon Ramsay lets Lucky Cat loose in London: Gordon Ramsay has launched his Asian-inspired restaurant Lucky Cat in Mayfair. The “authentic Asian eating house” and late-night lounge takes inspiration from the drinking dens of 1930s Tokyo and the Far East and has replaced Ramsay’s Grosvenor Square restaurant Maze, which closed in February after 14 years. Each dish has been designed for sharing at the centre of the table with classic Asian small plates and Robata-grilled dishes. Lucky Cat also features a raw bar offering sushi and sashimi, and chef’s tables with seasonal menus. The drinks list includes cocktails using Asian ingredients, Japanese gin, sake, wine, beer and whisky. Ramsay said: “Lucky Cat has been a long-time vision for me. I’ve toured and worked in much of Asia over the years and the culture, flavours and incredible cooking never fail to inspire me.”

Nottingham-based tapas restaurant group Perkins Family eyes expansion outside region: Nottingham-based tapas restaurant group Perkins Family is set to expand outside the region. Managing director Jonathan Perkins told The Business Desk he was looking to open a restaurant in Leeds or Birmingham at some point next year. Perkins, who, along with his brother took over his parent’s restaurant in Plumtree 17 years ago, also said he has resisted the temptation to take his Baresca and Escabeche concepts towards Deliveroo or any other home delivery operator. He added: “We have looked at it but realised it can be disruptive to diners who have come to one of our restaurants for an experience. I think it could be potentially damaging for our brand if we did team up with one of the operators.”

Brunning & Price opens pub in historic West Midlands house: Brunning & Price, the gastro-pub brand owned by The Restaurant Group, has opened a site in the West Midlands. The company has launched The Roe Deer having transformed Lawnswood House in Wordsley, near Stourbridge. Regency-style Lawnswood House was commissioned by the Foley family and built between 1813 and 1816. The pub, which takes its name from the family of roe deer often seen grazing within the walled garden, features a new stone terrace at the front and a 14-cover private dining room on the first floor. Brunning & Price operates circa 70 pub restaurants across the UK.

York chip shop to open site in southern China: A chip shop in York is making plans to open a site in southern China. Tony Webster, owner of Scotts Fish and Chips, has agreed a deal with a consortium of Chinese businessmen to open a shop in Chengdu, capital of Sichuan province. The partnership follows an increase in visits by Chinese tourists to Scotts Fish and Chips after Webster implemented a marketing strategy through China-based micro-blogging site Weibo. Webster told BDaily: “The publicity we received was phenomenal and resulted in Scotts becoming a household name here and abroad. On the back of this I was approached by a consortium of Chinese businessmen keen to recreate Scotts in the southern Chinese city of Chengdu.” In a city with a population of more than 7.5 million people, the shop will serve traditional fish and chips. Webster added: “This is an incredibly exciting prospect – one I could never have imagined 12 months ago.”

Project to transform Bradford cinema into live entertainment and events venue gets £1m Lottery boost: A project to transform the former Odeon cinema in Bradford into a multimillion-pound live entertainment and events venue has been boosted by a grant of almost £1m from The National Lottery Heritage Fund. The fund, which has provided a £959,500 grant, will act as an adviser to Bradford Live as it transforms the building. Birmingham-based NEC Group will act as the venue’s operator and has made a 30-year commitment to bring music, comedy and family entertainment to the region, with plans for more than 200 events a year. Bradford Live director Chris Morrell told Insider Media: “We are keen to ensure we do justice to the huge community support and love there is for this building and now the activities we have developed with our partners can be pursued.” Designed by architect William Illingworth, the Renaissance Revival building was completed in 1930 as the New Victoria Cinema and was one of the largest cinemas outside London with 3,318 seats, a restaurant and ballroom. Bradford Live has received funding from West Yorkshire Combined Authority and Leeds City Region Enterprise Partnership (LEP) through the Leeds City Region Growth Deal. The LEP also helped secure £4m for the project from the government’s Northern Cultural Regeneration Fund.

Cumbria-based operators to expand offer by opening bistro with rooms next week: Cumbria-based operators David and Sally Keighley are to expand their offering at Broadrayne Farm by opening a contemporary bistro with bedrooms next week. The Keighleys have invested more than £500,000 in The Yan, which will open on Monday (1 July) at their venue on the outskirts of Grasmere village. The Yan will be a rustic bistro and lounge with seven en-suite bedrooms. The bistro will be open to the public as well as guests of The Yan and serve “seasonal, hearty dishes inspired by the farm’s history”. The Yan will be the latest addition to Broadrayne Farm, which is already home to Grasmere Glamping and Broadrayne Farm Holiday Cottages. The Keighleys bought Broadrayne Farm in 2012.

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