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Fri 19th Jul 2019 - Propel Friday News Briefing

Story of the Day:

Byron reports cover growth as it eyes major refurbishment programme: Recent trading at better burger brand Byron has been positive, with the business experiencing cover growth during the past few months, Propel has learned. The positive momentum for the company, which appointed Simon Wilkinson as chief executive earlier this year, follows its commencement of a complete overhaul of its offer through design, menu, service and experience, including a recently launched menu with new vegan and vegetarian options. The announcement also comes ahead of what is believed will be a major investment to refurbish the group’s estate and reposition the brand, design and logo. The first site to feature the new look will open in November. Propel understands the business has also continued to strengthen its head office team, recently appointing Anna Muraska, formerly of Casual Dining Group, as head of marketing. Sophie Michell joined the company in June as food director, followed by David Pepper, while Michael Toon will join the company as finance director in October. It’s thought the company is also looking to recruit a dedicated delivery and digital manager. The company is believed to be budgeting for a £1.5m reduction in its central cost base for its current trading year on the back of a flattened operational structure. The moves are part of a transition to change the business’ culture and commercial focus and come at a time when the company, which underwent a company voluntary arrangement (CVA) last year, is understood to have filed its accounts for the year to the end of June 2018. The accounts will show turnover in the year was £82.8m, down from £88m in 2017, driven by the closure of 16 restaurants during the period. Ebitda for the period stood at £0.5m. However, there was circa £42m of exceptional costs, largely non-cash and accounting, which were mostly driven by the CVA. It’s thought the accounts were delayed while waiting for Wilkinson to start his role and PwC to see his plans for the business. It’s understood the business has subsequently been given a clean audit. It is also understood the company has no bank debt and a healthy balance sheet thanks to a cash injection of £10.2m provided by backers including Three Hills Partners at the start of the year.

Industry News:

Scott Russell to feature in next video for Propel Premium subscribers: Scott Russell, founder of Paddy & Scott’s, will feature in the next 30-minute video for Propel Premium subscribers, which will be sent out on Friday (19 July). Russell reveals how ethical trade and sustainability has played a key role in the brand’s expansion. 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

Upcoming conferences: The Pre-booked Sales Masterclass will be held on Thursday, 5 September. For full details, click here. Meanwhile, the Women’s Entrepreneur Conference takes place on Thursday, 12 September. Click here for details.

Deliveroo launches food procurement service to ‘cut restaurant ingredient bills by 20%’: Deliveroo has launched a food procurement service that offers “big savings on raw ingredients”. The service allows restaurants to buy ingredients and supplies at reduced prices via bespoke deals negotiated by Deliveroo. The move follows a year-long trial in the UK that, the company claims, has saved restaurants more than 20% on ingredients bills, with smaller independents saving up to 40%. Deliveroo has established a dedicated team for the service at its London headquarters. Deliveroo said by creating efficiency within the supply chain, “suppliers would be able to access more restaurants”. The company said several hundred of its restaurant partners were already using the scheme, while it expects that number to reach 5,000 by the end of the year. The programme will also be live by the end of the year in France, Spain and United Arab Emirates. Deliveroo vice-president of new business Ajay Lakhwani said: “Food procurement is an exciting new service that will cut costs while raising the quality of ingredients. By using our size to negotiate great prices, we can simplify the procurement process and help independents and chains make big savings.”

Hotel franchising in Europe increases as big brands expand into new markets: Hotel franchising is increasing in Europe as large brands look to expand their portfolios into new markets, according to a report from global hotel consultancy HVS. The number of branded sites in Europe has risen to 40% from about 33% a decade ago, the report states. However that figure remains low compared with the US, where more than two-thirds (70%) are branded. During the past five years, Accor’s proportion of franchised properties in Europe has risen from 37% to 48% and Hilton’s has increased from 32% to 51%, while the majority of IHG’s European portfolio now consists of franchised properties. Companies such as Hyatt, which historically had no franchise presence in Europe, now has several franchised sites and is set to roll out this model to expand its “limited service” and “extended stay” brands. Report co-author and HVS senior associate Stephen Collins said: “While some chains are reluctant to relinquish the control offered by management contracts for their luxury brands, franchising is becoming a strong means of expansion for mid-market properties. However, the model isn’t without challenges as brands that are successful in one European market might struggle to gain recognition in another. Different regulations and disclosure obligations across various European markets also mean a one-size-fits-all approach to franchise agreements isn’t always possible. The consolidation and acquisition of hotel chains has led to a sharp rise in the proportion of franchised properties in the portfolios of the top chains and, as they are now larger than ever, they will continue to rely on franchises to achieve the desired growth and remain ahead of the competition.”

UKHospitality – late-night levy proves Southwark Council ‘only cares about revenue raising’: Southwark Council’s decision to introduce a late-night levy in the borough proves it “only cares about revenue raising” rather than the community, UKHospitality has said. The levy will apply to all businesses licensed to sell alcohol after midnight and will come into force in September after the move was approved at a council meeting on Wednesday (17 July). UKHospitality had urged the council not to introduce the tax and gathered the signatures of more than 200 businesses, residents and customers against it. Chief executive Kate Nicholls said: “We are incredibly disappointed Southwark Council has chosen to ignore the concerns of local businesses and residents. Pubs, bars and nightclubs that have helped drive the revitalisation of the area and foster a fantastic community spirit are now going to be penalised. By introducing a discredited tax, which the House of Lords recommended be abolished, Southwark Council has proved it only cares about revenue raising rather than supporting the community. Local businesses, their employees and customers are the ones who will suffer.” The British Beer & Pub Association also voiced its disappointment, branding the move a “backward step”. 

Company News:

Private equity groups circle Vinoteca: A handful of private equity groups are bidding to acquire a stake in wine bar and restaurant concept Vinoteca. Propel has learned up to four investment firms are bidding to invest in the five-strong business, which was founded by Brett Woonton, Charlie Young and Elena Ares in 2005. The interested parties are believed to include Foresight, which currently backs Mowgli and 200 Degrees; Gresham (Pho and Rockfish); and BGF (Giggling Squid, Mission Mars and Camino among others). Earlier this year Propel revealed Vinoteca, which will open its first bar restaurant outside London as part of the Paradise development in Birmingham city centre in early 2020, had appointed Dow Schofield Watts London to advise on funding options. Sector investor Paul Campbell acquired a stake in the then two-strong business at the end of 2012. Young and Woonton, who met 18 years ago when they worked at Liberty Wines, opened the first Vinoteca in Farringdon before expanding to sites in Marylebone, Chiswick, King’s Cross and the City. Earlier this year the company reported strong sales growth in 2018/19, with total sales in the year to the end of March 2019 up 5.8% to £7.57m. The business saw good overall like-for-like sales growth in the year, particularly at its venues in King’s Cross and Bloomberg’s headquarters in the City. Managing director Young told Propel at the time: “We are delighted with the performance last year, particularly at King’s Cross and Bloomberg. We are incredibly excited about our plans to open at the Paradise scheme in Birmingham. Vinoteca is increasingly the wet-led tenant of choice in these prestigious developments.”

Slim Chickens secures private equity investment to fund growth towards 600-site target: Slim Chickens, the fast-casual chicken brand, has secured investment from private equity firm 10 Point Capital as it looks to reach 600 stores globally in the next ten years. The Arkansas-based company opened its fourth UK site last month, in Birmingham, through franchise holder Boparan Restaurant Group. Slim Chickens, which operates 80 units in the US and others in Kuwait, told Nation’s Restaurant News the undisclosed sum would finance “continued growth”. The concept offers chicken tenders and wings served with house-made dipping sauces. Greg Smart and Tom Gordon founded Slim Chickens more than 16 years ago. Gordon said: “Our growth with new franchise agreements has been exceptional in the first half of 2019. In the past quarter alone, Slim Chickens has signed 60 restaurant agreements with impressive, experienced multi-unit franchisees. With 10 Point Capital’s unique support and expertise, we believe we have the resources necessary to achieve our goal of 600 stores in the next ten years.” Tom Wells, managing partner at 10 Point Capital, added: “Whether in Little Rock, Arkansas or central London, Slim Chickens has quickly established a loyal following.”

Arc Inspirations reports like-for-likes up 69% at sports-led sites during Cricket World Cup: Arc Inspirations, the Leeds-based operator of a number of fast-growing brands, has reported like-for-like sales were up 69% at its sports-led sites during the Cricket World Cup. During the tournament the company screened the action at several key sites, including the Manahatta and Box bars in Headingley. For the England versus New Zealand World Cup final on Sunday (14 July), The Box in Leeds city centre saw sales up 180% compared with the previous week and up 162% for the England versus Australia semi-final the Thursday before. Arc Inspirations chief executive Martin Wolstencroft said: “The Cricket World Cup was a great boost for us and we’re proud to be at the heart of the action bringing people together to enjoy the drama of top-quality sport. Being in the centre of Leeds, lunchtime trade at The Box was booming every time England played. Off the back of England’s dramatic win, we look forward to welcoming back customers to watch the upcoming Ashes series in our bars, which includes the third test at Headingley in late August.”

Oakman Inns reveals Buckingham pub plans: Oakman Inns and Restaurants has revealed its plans for Number Thirteen pub in Buckingham, which it bought for an undisclosed sum in February. Oakman Inns wants to restore the High Street pub’s name to Grand Junction and will seeking planning permission and listed building consent from Aylesbury Vale District Council for a full repair and refurbishment of the historic building, including a dedicated 100-cover restaurant and courtyard. Chief executive and founder Peter Borg-Neal told Mix96: “If we’re successful, Buckingham will see a sustainable, community-centred business bringing new jobs and increased visitors to the town. I have lived in nearby Tring for most of my life and have always loved coming to Buckingham, which is a marvellously vibrant town with a great university.” Earlier this month, Oakman Inns reported strong sales growth for the 13 weeks to 30 June 2019. Like-for-like sales for the quarter were up 4.8%, while total sales increased 28.8% year-on-year to £10,775,947. Oakman Inns and Restaurants operates 23 venues in total.

London-based whisky brand Milroy’s to launch multi-bar venue in Spitalfields for second site: London-based whisky brand Milroy’s is to open its second bar. The company, which has a basement whisky bar at its Soho shop, will launch Milroy’s Townhouse in Spitalfields in September. The 140-capacity venue in Commercial Street will span three floors and house three bars – a cocktail bar, a whisky bar and an exclusive members’ bar and tasting room – along with a roof terrace. Milroy’s opened its shop in Greek Street, Soho, in 1964 and it holds the largest collection of whisky in the capital.

Manorview shares 10% of pre-tax profits with staff: Scottish-based boutique hotel and leisure group Manorview has shared 10% of its pre-tax profits with staff via its HeartCount Fund. The Manorview Group reported a pre-tax profit of £554,440 for the year to 31 March 2019, which has led to £55,344 shared between qualifying team members. To qualify, employees have to be in continuous employment for 12 months, with the fund distributed in proportion to earnings. In total, 281 team members qualified to receive an average payment of £200. Managing director David Tracey said: “Our goal is to be recognised as a great place to work, where people feel appreciated and want to stay.” The group, founded in 2007, operates eight hotels, two pubs, two nightclubs, a gym, and a fitness and leisure club.

Cafe Rouge becomes first major restaurant business to provide detailed access guides: Casual Dining Group brand Cafe Rouge is to become the first major restaurant business to provide detailed access guides for disabled people, carers and others via AccessAble. The online guides cover visual and mobility impairments, autism, mental health issues, long-term health conditions and the elderly. The move will see facilities across the brand’s estate analysed to produce guides that will be available online and through AccessAble’s free app. Details will range from car parking spaces and accessible toilets to hearing loops and lighting levels. Cafe Rouge brand director Greg Gibbons said: “We are proud to be the first major restaurant business to take the progressive step of increasing awareness of accessibility across our estate.” AccessAble chairman Barry Stevenson added: “For those who wish to dine at Cafe Rouge, ‘access begins online’ will soon become a reality.”

Former Trullo chef and ex-Barrafina general manager to open Italian restaurant in London Bridge: Former Trullo chef Matt Beardmore and Jay Patel, who was previously general manager at Koya and Barrafina, are to open a neighbourhood Italian restaurant in London Bridge. They will launch Legare at Shad Thames in the autumn. Legare, which means “to bind” in Italian, will focus on seasonal ingredients, fresh pasta and a low-intervention wine list. The 35-cover restaurant will make pasta in-house daily to create dishes such as tajarin with butter and sage, and orecchiette with fennel sausage and Swiss chard ragu. A weekly changing specials board will also allow Beardmore and his kitchen team to experiment with other seasonal dishes. Patel said: “The restaurant draws inspiration from the places Matt and I have worked at and travelled to. We are not an out-and-out classic Italian restaurant and don’t pretend to be. Having lived in south London all my life, I feel a sense of pride in opening Legare south of the river.” Beardmore added: “The menu is based on beautiful produce with a strong focus on vegetables, fruit and seafood. We have taken influences from the best of the seasons in Italy and the wider Mediterranean, putting flavour and quality first.”

HMSHost to launch five brands at Manchester airport ‘super terminal’: HMSHost International, which operates food and beverage concessions, has won a tender to launch five brands at Manchester airport’s new £1bn “super terminal”. The stores, which have been signed on five to seven-year contracts at a total value of about £74m, are set to open in 2020. The five brands are KFC; fusion fast food business Wrapchic; coffee concept Pot Kettle Black; Amber Alehouse, a gastro-pub and craft beer concept in partnership with local brewer Seven Bro7hers; and HMSHost’s own all-day fresh juice and food bar VIT. HMSHost International chief executive Walter Seib said: “We have translated local brands to high-traffic locations, partnered with local brewers and brought in international favourites. Our partnership with Manchester Airports Group, and specifically the team at Manchester airport, for these brands has always been about creating something great together.” In total, 15 food and drinks venues will open at the terminal with operators including Wagamama, ETM Group, San Carlo Group, Joseph Holt and Barburrito. Manchester airport chief executive Andrew Cowan said: “We have worked hard to identify partners that represent the strength and depth of the region’s food and drink scene and it’s great to be working with so many brands that started life in the north and have grown to become household names.”

Ta Ta Eatery team launches London’s first katsu sando shop: Ana Gonçalves and Zijun Meng, the former Viajante chefs behind street food concept Ta Ta Eatery, have opened “London’s first katsu sando shop”. Tou has launched at Arcade Kitchen Theatre, the new food hall at Centre Point in London’s New Oxford Street. The restaurant offers katsu sando, a Japanese snack that is usually a breaded pork cutlet with coleslaw on white bread. Tou opens from midday to midnight and offers new flavours created to “change people’s perspective on what they can expect between two slices of bread”. The concept also offers rice bowls. Meng and Gonçalves, who both worked at Chiltern Firehouse, launched a debut bricks and mortar site for Ta Ta Eatery – the “Chinese family-style rice fix with a Portuguese twist” – in Haggerston, east London, in June 2016. The site has since closed but Ta Ta Eatery now supplies the food offering at Tayer and Elementary, the all-day cafe that opened in Old Street last month.

North east-based operators line up second site for Italian restaurant: North-east-based operators Arben and Kushtrim Gegaj are lining up a second site for their Italian restaurant Due Fratelli. They have applied to Newcastle City Council for a premises licence as the company bids to convert a former bingo hall in Westerhope into the new venue. The building in Stamfordham Road was also previously a cinema, reports Chronicle Live. A planning statement with the application reads: “This new use is a welcome addition to the streetscape of Stamfordham Road, which only has one other restaurant.” The Gegajs have owned and operated Due Fratelli in Newbiggin-by-the-Sea since 2012.

Pasta Remoli to open fourth London site next month as it gears up for ‘strong but gradual growth’: London-based casual dining concept Pasta Remoli is to open its fourth site in the capital, at Quintain’s £3bn Wembley Park development, as it gears up for “strong but gradual growth” during the next five years. Pasta Remoli will open a 50-cover, 100 square metre restaurant, with a 75 square metre outside area and takeaway and delivery services. The concept promotes “dining in three easy steps”, with customers choosing their homemade pasta and sauce before adding a cheese topping. Using authentic Italian ingredients, the new site will also offer seasonal specials, homemade bread, cakes and desserts. Rome-born Simone Remoli moved to London and worked at restaurants such as Barrafina, Locanda Locatelli and Bocca di Lupo before launching Pasta Remoli with Francesca Tarquini and Stefano Anfussi. Remoli said: “We are right next to Wembley Stadium, which means concert days and football matches will attract thousands of people to our site. We are gearing up for strong but gradual growth over the next five years in London and, potentially, elsewhere in the UK. What’s important for us is we maintain a quality experience for our diners and stay true to our ethos – authenticity, quality and doing things our way. It’s important to us that we control our growth plans without having to compromise to meet expectations of outside investors.” Pasta Remoli’s other sites are in Finsbury Park, Ealing and Westfield Stratford.

Carlisle-based bar operator to double up: Carlisle-based bar operator Sarah Dempster is to double up in the Cumbrian city. Dempster will launch Amante Bar and Secret Garden in the former Royal Hotel pub in Lowther Street next month. Amante will be the sister bar of Bocata, which is on the corner of Lowther Arcade and Lowther Street. Dempster told the News & Star: “Initially we’re going to open as a bar and introduce food further down the line. We hope to achieve the look of a big city bar, aimed towards customers aged 25 and over.” The Royal Hotel closed in 2006 and has stood empty since.

The Lakes Distillery puts stock market plans on hold as losses almost double: Cumbrian-based The Lakes Distillery, which secured £3.75m in growth funding last month, has reported losses have almost doubled as it puts plans for a stock market float on hold. The company saw turnover increase to £6,231,000 for the year ending 31 December 2018, compared with £4,329,000 the previous year. Operating losses were up to £1,682,000 compared with £858,000 the year before, while pre-tax losses rose to £1,751,000 compared with £937,000 the previous year. The company incurred exceptional costs of £487,000 after aborting its planned admission to AIM due to “current market uncertainty”, but said a stock market float remained “a possibility”. The distillery, which is within the Lake District National Park, operates as a tourist destination and exports gin, whisky, vodka and liqueur across the world. Activity at the visitors’ centre increased during the period with the number of distillery tours up 800 to 34,200. In their report accompanying the accounts, the directors said sales were expected to increase in 2019 while it would continue to invest in its sales and marketing team. AIM-listed investment company Gresham House Strategic structured and led last month’s growth funding, providing £2.1m supported by the LF Gresham House UK Multi Cap Income Fund and other co-investors. The Lakes Distillery also raised £1.75m on crowdfunding platform Crowdcube last year.

Exeter-based cocktail bar operators to open beach bar and street food restaurant in Teignmouth: Exeter-based cocktail bar operators Patrick Fogarty and Tom Cullen are to open a beach bar and street food restaurant in Teignmouth. The duo, who own Doctor Ink’s Curiosities cocktail bar at Exeter Quay, are joining forces with Teignmouth lifeboat crew members James Cassidy and Ben Thompson for the new venture. The venue, named Halulu Bar, will open on Teignmouth seafront at the beginning of August. Set on the site of the former Goldfish Bowl, the venue will turn from a daytime beach cafe to a beach bar in the evening. South Devon’s Pierhead Cafes & Bars will be serve fresh juice, tea no and low-alcohol drinks and cocktails as well as street food, reports Devon Live.

Distillery plans approved as part of £7m Welsh castle project: Plans to turn part of a 17th century castle in South Wales into a craft spirit distillery, bonded warehouse, gin school and visitors’ experience have been approved. The project is part of a £7m scheme to turn grade I-listed Hensol Castle into a tourist destination while producing spirits for commercial sale. Hensol Castle Distillery is a joint venture between the Leeke family, who own The Vale Resort and Leekes, and the Mallows family from Cowbridge, who own Bottlers & Distillers Wales. Hensol Castle Distillery will produce gin, vodka and other spirits including low-calorie, low-sugar and low-alcohol ranges. The visitors’ experience, gin school and production facility will open later this year.

Nando’s gets approval for new-build Blackpool restaurant: Nando’s plans to build a restaurant in South Shore, Blackpool, have been approved. A 350 square metre Nando’s restaurant is set to be created alongside a Starbucks drive-thru and a third retail unit on the car park of a Morrisons supermarket off Squires Gate Lane. The development will be built between a fuel station and car wash, with a new exit created from the main road. Blackpool Council had reservations about the potential impact on the “vitality and viability of Blackpool town centre” but Fylde council, which is responsible for the area, approved the plans. Morrisons, which is behind the application, said its 615-space car park was never filled and the loss of 50 spaces wouldn’t “cause any issues”. Its application stated more than 40 staff would be employed across the three units, the Blackpool Gazette reports. Nando’s already operates a site in Church Street, Blackpool.

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