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Mon 23rd Dec 2019 - Propel Monday News Briefing

Story of the Day:

Giggling Squid continuing to see growth ‘across the board’ as it reports full-year turnover and Ebitda boost: Andy Laurillard, co-founder of Thai restaurant brand Giggling Squid, has told Propel the company has continued to see growth in its current financial year “across the board”. He said the company was negotiating on three more sites as the company, which is backed by BGF, continued to strengthen its pipeline for 2020 and beyond. The company will open its 35th site, in Leicester in January, which will be its fifth opening of its current financial year. Meanwhile, the company is doubling the size of its Guildford restaurant after buying a neighbouring property, which will see it able to accommodate between 120 and 130 covers. Laurillard said: “We are seeing growth across the board, including on margins and customer service, which is particularly pleasing. Our recent menu change appears to have gone down well. We’ve not opened as many sites in the current financial year as we did the previous year but we’ve got more to come in 2020 with Cambridge and Harborne and we’re looking at a few others as well – there’s quite a bit happening.” Laurillard spoke to Propel as the company reported turnover for the year ending 31 March 2019 increased 39% to £33.0m, compared with £23.7m the previous year. Company Ebitda before exceptional costs was up 51% to £4.9m, compared with £3.3m the year before. Like-for-like sales growth was “robust”. The company opened seven sites during the period – in Beaconsfield, Bishop’s Stortford, Chichester, Cheltenham, Harpenden, Kingston and Windsor. The sites have all performed at or well above expectations to date. Post year end, the company has opened restaurants in Oxford, Chislehurst, Leamington Spa and Weybridge. The company has continued to invest in infrastructure and its head office team during the year to position the brand for further expansion. Laurillard added: “We are buoyed by the fact the business continues to thrive in what are undoubtedly challenging times for the hospitality industry. Our differentiated proposition continues to attract new customers and we’re committed to investing throughout the business to ensure continued success.” His wife and co-founder Pranee added: “We don’t overcomplicate things. At our heart is the spirit of Thai mealtimes – great food to share, cooked by experts and served with Thai generosity. Our success shows how this offering continues to appeal and we look forward to welcoming new guests as we open more sites across the UK.” Giggling Squid, which secured a £6.4m investment from BGF in 2015 to support its expansion plans, opened its first site in Brighton in 2009. In August, the company ended its sales process after being placed on the market earlier in the year.
 

Industry News:

Turning Data Into Strategy & Action Masterclass open for bookings: Propel has launched the Turning Data Into Strategy & Action Masterclass in partnership with hospitality data consultancy DataHawks, with the event open for bookings. The masterclass will take place on Tuesday, 25 February at Chartered Accountants Hall, One Moorgate Place, London EC2R 6EA. The event will look at why operators should be using data and address some of the common myths and language that surrounds it. Attendees will also learn how to use data to drive sales and long-term loyalty without sacrificing margin or brand credibility. DataHawks founder Victoria Searl will talk about building and optimising customer journeys, finding new customers and leads, and measuring the impact and effectiveness of offline marketing. Searl will reveal how to prepare for the unexpected by using data and tech; improve the impact and effectiveness of discounts, offers and rewards; retain revenue when closing sites; and what data to collect and why. Meanwhile Dan Brookman, chief executive of Airship CRM, will also talk about knowing and understanding your customers to drive personalisation and conversion. The event will be followed by drinks at The Tokenhouse in Moorgate. Tickets are £295 plus VAT for Propel Premium members and £345 plus VAT for non-members. To book, call Anne Steele on 01444 817691 or email anne.steele@propelinfo.com
 
Bestway Retail launches UberEats delivery trial: Bestway Retail has launched a delivery trial with UberEats from 81 of its stores, including sites trading as Wine Rack, Bargain Booze, Select Convenience and Central Convenience. The service covers more than 700 products ordered via the UberEats app, including alcohol and snacks. Stores are committed to stocking all 700-plus lines to ensure consistent availability for shoppers across all areas covered. Bestway chief retail officer Andy Cresswell told IGD: “This deal will help retailers showcase their proposition to even more consumers and drive sales across key on-trend categories. For us, it’s about being convenient at the heart of the communities in which we operate.”
 
Europe’s hotel industry reports growth in all key performance metrics for November: Europe’s hotel industry has reported year-on-year growth in the three key performance metrics during November, according to the latest data from STR. The overall European market saw revpar rise 3.4% year-on-year to €77.08 (£65.36), while average daily rate increased 1.9% to €106.71 and occupancy went up 1.5% to 72.2%. Data for the month focused on Azerbaijani capital Baku, which saw revpar rise 13.8% to AZN91.71 (£41.34). Occupancy was up 21.4% to 54.9%, the highest the city has seen in the month of November since 2006. STR analysts said the jump was thanks to multiple events held in Baku, including the Azerbaijan versus Wales Euro 2020 qualifier. 

Job of the week: COREcruitment is seeking a managing director on behalf of a global hospitality group serving multiple offers and markets. The individual, who will based in the UK, will be a commercial and driven leader who has a proven track record of expanding businesses within the hospitality sector. They will be an effective communicator with understanding of business-to-business and business-to-consumer relationships. The position offers a salary of £250,000-plus. For more information or a confidential chat, email Hollie@corecruitment.com
 

Company News:

Watch House Coffee doubles estate with Fernandez & Wells deal: London-based speciality coffee concept Watch House Coffee, which secured backing from Edition Capital earlier this year, has acquired all four Fernandez & Wells (F&W) sites in the capital, Propel has learned. The speciality coffee and wine venues in Soho, South Kensington, Mayfair and Somerset House will continue to operate under the F&W banner while Watch House works through a revamp schedule in 2020. Four-strong Watch House secured £2.1m of new investment in October with the initial investment anchored by Edition, which also backs Incipio Group and urban axe-throwing operator Whistle Punks. Roland Horne founded Watch House in Bermondsey Street in 2014 and the group has added sites in Tower Bridge, Fetter Lane and Spitalfields. Horne told Propel: “When we launched inside a 25 square metre former watch house we wanted to build a brand where each venue was chosen carefully to fit its community needs and where great coffee could be enjoyed in special spaces. We started from the viewpoint of what we would want as a customer and have used that as a core guiding principle throughout our journey. Over the years we have taken the conscious decision to grow sustainably and carefully having seen others in the market lose what originally made them special following vast roll-outs. F&W was one of my favourite speciality cafes in London – I loved its attention to quality and general vibe – so when the opportunity presented itself the merger felt obvious. With the acquisition of these sites we’re incredibly excited by the opportunity to bring modern coffee to some of the capital’s most well-known settings.”

Park Chinois continues to narrow losses as it reiterates global expansion plans: Park Chinois, the Chinese restaurant in Mayfair from Wagamama founder Alan Yau, has continued to narrow its losses and reiterated its plans to expand to prominent cities globally. Park Chinois, which opened in Berkeley Street in November 2015, saw turnover increase to £13.3m for the year ending 31 March 2019, compared with £13.0m the year before. It had an operating loss of £1.5m, compared with a loss of £2.6m the previous year. Pre-tax losses narrowed to £1.5m, compared with £3.7m the year before. Gross profit margin increased to 79% compared with 77% the year before, excluding employee costs. The company has estimated losses of £21.3m (2018: £19.8m available for carry forward against future trading profits. Wages and salaries during the most recent year fell to £4.2m, compared with £4.8m the previous year, with staff numbers down to 167 from 194. Post year-end, the company opened its new concept, Moncks of Dover St, in Dover Street, Mayfair. In his report accompanying the accounts, director Hetal Patal said: “Park Chinois operates across two floors with distinct characters – Salon de Chine and Club Chinois. The business has reported a loss for the period, which was in line with the directors’ expectations given the size and complexity of the restaurant and its projected maturity curve. Park Chinois is now an internationally recognised brand representing a unique hospitality offering consisting of best in class food, bar, wine, service and entertainment culture within spectacular surroundings. There are also plans for growth to take the Park Chinois concept to prominent cities globally.”

Ei Group executive directors earn almost £5.6m in 2019: Ei Group’s executive directors earned almost £5.6m for the year ending 30 September 2019, compared with £3.3m last year, after long-term incentives vested. The company’s annual report revealed chief executive Simon Townsend earned £3,072,000, which was made up of £498,000 in base salary, £31,000 in taxable benefits, £124,000 in pension, a £550,000 annual bonus, £1,867,000 in long-term incentives and £2,000 in SIP matching shares. Finance director Neil Smith earned £2,523,000, which was made up of £411,000 in base salary, £31,000 in taxable benefits, £103,000 in pension, £454,000 annual bonus and £1,524,000 in long-term incentives. Townsend’s base salary will remain at £500,000 and Smith’s at £413,000. Ei Group is set to be bought by Stonegate Pub Company for £3bn and, with that in mind, chairman of the remuneration committee Peter Baguley stated in his report: “Decisions in relation to the impact of the Stonegate offer on the executive directors’ variable remuneration will be taken closer to completion when the company’s performance in the part year ending 30 September 2020 can be better assessed. Decisions will be in line with the shareholder-approved directors’ remuneration policy and, where relevant, shareholder-approved rules of the company’s share plans. This will include consideration by the committee of the impact of the transaction on the vesting of the long-term incentive payment awards granted in 2018, for which the three-year performance period is scheduled to end on 30 September 2020 and the restricted share plan awards granted in March 2019.”

Hop ‘overfunding’, campaign set to go public as its targets £1.5m raise: London-based Vietnamese street food concept Hop is to make its crowdfunding campaign public in the new year, with a stretch target of £1.5m. Last month, the five-strong business launched a private crowdfunding campaign as it looked to raise an initial £750,000 to aid its expansion across the capital. The business, which is led by Paul Hopper, has so far raised £809,710 from 108 investors with 15 days of the initial campaign remaining. The highest single investment so far has been £260,000. Hop is offering 7.60% equity in return for investment, which gives the business a pre-money valuation of £9.1m. Andrew Walker, former managing director of Pret A Manger and EAT, is one of those to have invested in Hop through this campaign. From the start of next year, the company will look to take on additional investment on exactly the same terms as the investment so far. It said any additional capital it raises will be put towards accelerating its growth and the roll out of two new Hop sites in 2020. The campaign will remain private over the festive period before opening to the public in early January. The company, in which former Wagamama and Casual Dining Group chairman Martin Robinson is a significant investor, reported sales of circa £3.8m in 2018 and served an average of 12,000 customers per week. Hop said it was in negotiations with a leading concessions operator about opening a number of sites in transport hubs across the UK and in early-stage discussions with a “dark kitchens” operator to expand delivery capabilities. A site in Paternoster Square is also thought to be on the radar. To date, the business has raised almost £4m of equity capital from high net-worth individuals.

Greene King appoints operations directors for Pub Partners team: Brewer and retailer Greene King has appointed two operations directors to its leased and tenanted Pub Partners division following internal promotions. Phil Arnold will look after the south-east region while Steve Look is responsible for multiple operators, concept development and the independence estate. Both joined Greene King in 2002 as business development managers before taking on operations manager roles in recent years. Arnold also spent time as Pub Partners recruitment manager based at Greene King’s head office in Bury St Edmunds. Look joined the managed division for Greene King London Locals and moved to Pub Partners in 2005, going on to hold a number of business development manager roles across East Anglia before working nationwide looking after the independence estate and growing new concepts. Look’s role is new and brings the number of Greene King Pub Partners operations directors to four. Greene King Pub Partners managing director Wayne Shurvinton said: “I’m delighted we have been able to recognise the outstanding talent we have within our own business and promote Phil and Steve to operations director roles. They have both worked for Greene King for 17 years and have a wealth of experience in the industry.” Meanwhile, Greene King has launched a five-foot frozen igloo with lickable beer walls to mark the arrival of new pale ale Ice Breaker. The “Ale B&B” was unveiled at the Anchor Bankside pub in Southwark, London.

Sweet Chick operator lines up Birmingham site for second UK outlet, eyes Black Tap launch: Sunset Hospitality Group (SHG), the Dubai-based boutique investment and hospitality management company behind the UK launch of Sweet Chick, has secured a second site for the US fried chicken and waffle concept, in Birmingham, Propel has learned. The company is understood to have lined up the EAT unit in the city’s Bullring scheme for an opening next year. SHG launched Sweet Chick in the UK earlier this year on the former Carluccio’s site in Market Place, Fitzrovia. Propel understands SHG also hopes to launch another US brand it acts as a franchisee for in the Middle East – burger, shake and craft beer concept Black Tap. It operates about 15 sites, with more than half of those locations outside of its domestic market. SHG is believed to be in talks to take space in the former The Sussex pub site in Upper St Martin’s Lane, Covent Garden, which is being redeveloped. The concept is co-owned and run by Chris Barish – a long-time promoter, nightclub owner and former business partner of Gordon Ramsay – and architect Julie Mulligan after chef Joe Isidori announced plans to exit the business earlier this year. Last year, the company licensed the brand to SHG with the intention of expanding in Europe and the Middle East. There is already a Black Tap in Geneva, three in Dubai, two in Kuwait and one each in Abu Dhabi and Bahrain.

Domino’s Pizza boss feasts on shares: David Wild, the chief executive of Domino’s Pizza, has taken almost £3m of shares ahead of his expected departure from the company. Wild, who has been locked in a spat with franchisees over profits, also cashed in £1.4m of the shares awarded as part of a long-term incentive scheme, reports The Sunday Times. The payday comes amid a series of top-level changes at the group, which is under pressure from an American activist and is in the process of replacing Wild and chairman Stephen Hemsley. Wild, who took the top role in 2014 after working at retailers such as Tesco and Halfords, has been under fire for failing to resolve a fierce row with franchisees, some of whom have refused to open new stores. Pre-tax profits fell 26.8% to £30.5m in the first six months of the year amid poor performance by Domino’s overseas business and the franchisee dispute. Wild — who was paid £699,000 last year, down from £1.4m in 2017 — exercised 947,652 of shares awarded in 2014. At the same time, he sold 446,514 shares at 310p each to cover tax and national insurance. Shares in Domino’s closed at 320.4p on Friday (20 December), valuing the company at £1.5bn.

Club Mexicana to open permanent Soho site: Club Mexicana, the vegan Mexican street food concept, is to open its first permanent site in London next spring, after securing a site in Soho. The Meriel Armitage-founded business, which currently operates three concessions in Kerb, Covent Garden; Dinerama in Shoreditch; and in the Spread Eagle in Hackney, has secured a site in Kingly Court, Carnaby Street. It is thought to have taken part of the Ben Sherman unit for an opening next March. Armitage, who quit her job in advertising to start the concept, previously said: “Our food is all about flavour that packs a punch, but with a sprinkling of 80s kitsch to sweeten the blow.” Nick Garston, of Bruce Gillingham Pollard, acted on the Kingly Court deal.

SSP launches second phase of F&B openings at Mactan Cebu International airport: SSP Group, the UK-based transport hub foodservice specialist, is building on the launch of its first food and beverage operations at Mactan Cebu International airport in the Philippines by adding eight units. The new facilities include a food court called Food Avenue that features five bespoke brands – contemporary cafe and bakery The Bakery; Filipino Delights, which offers a new take on traditional Filipino dishes; bubble tea concept Taipei Tea; Lolo Pinoy Lechon de Cebu, where customers can choose from a range of lechon dishes; and Japanese restaurant concept Nippon Ramen. SSP has also added another three standalone units at the airport – Jolibee, which serves American-style fast food with a Filipino twist; Shakey’s, which offers pizza, fried chicken, pasta, starters and sides; and a second site for The Coffee Bean & Tea Leaf, which focuses on speciality coffee and tea, gourmet sandwiches, salads and pasta. SSP was named master concessionaire at Mactan Cebu International airport in 2018, with the group planning to launch 27 food and beverage units. The first phase saw seven outlets open. Mark Angela, chief executive of SSP Asia Pacific, said: “Our first units in Cebu have traded well since launch and continue to perform above expectations. Our latest outlets offer something for everyone, with popular regional dishes close to the heart of local travellers and top global brands that are instantly recognisable among international passengers.” 
 
Zip World moves from slate to coal for South Wales expansion: Adventure tourism operator Zip World has shared details of its South Wales expansion plans. Zip World has opened three sites in the Snowdonia mountain range in North Wales since 2013 – Penrhyn Quarry, Slate Caverns and Fforest. The business has now confirmed it is set to launch an attraction at Tower Colliery in the village of Hirwaun in South Wales’ coal-mining region. Zip World is looking to open a four-person zip line similar to its Titan ride at Slate Caverns. Sean Taylor, founder and president of Zip World, said: “We are always looking to push the boundaries. We want to do for Welsh coal communities in South Wales what we’ve done for Welsh slate in North Wales and create adventures that bring great tourism opportunities to the local area.” Zip World secured investment from LDC early this year to support its growth strategy. The deal was also supported by Zip World’s bank backer, HSBC.
 
Chipotle testing prototype stores geared for $1bn digital business: Chipotle is testing store designs geared towards its digital business, which has reached $1bn in sales. The new designs contain a mix of features including modern furniture, pick-up shelves near the front entrance, a walk-up window and a restaurant with a “Chipotlane” for collecting online orders. The restaurants, a mix of retro-fits and new stores, are in Chicago, Cincinnati, Phoenix, Tempe, Newport Beach and San Diego. A newly remodelled standalone store in Newport Beach has reopened featuring the pick-up shelves, while stores in Chicago, Cincinnati and Phoenix are testing the walk-up window and Chipotlanes. Chipotle said it would measure the performance of each new look by tracking factors such as transactions and guest feedback. Chief development officer Tabassum Zalotrawala said: “While we are staying true to Chipotle’s heritage we are also excited to integrate new physical features into the restaurant that complement our growing digital business. Our eco-friendly, natural aesthetic and locally sourced approach to this design builds on our strong brand values.”
 
Danieli Holdings reveals first traders for Sunderland shipping container development: North east-based Danieli Holdings has revealed the first traders at its shipping container development – Stack – in Sunderland. The company released the names as construction began on the £2.5m project on Seaburn seafront. Downey’s Fish & Chips, owned by Glen Downey, is part of the line-up. The Stack Seaburn restaurant will be Downey’s sixth venue in the region. Also joining is Acropolis Street Food, which serves Greek street food. It has been trading for more than three and a half years at Jesmond, Tynemouth and Newcastle markets as well as events throughout the region, reports BDaily. Stack Seaburn is set to open at the Seaburn Leisure Centre site in Whitburn Road in the spring. It will be joined by The Inn Collection Group’s latest site, a 40-bedroom pub with rooms, with work due to start shortly.

Former EAT chief customer officer Oades joins Travelodge as new marketing director: Holly Oades, who spent seven years at EAT, has joined budget hotel brand Travelodge as its new marketing director. Oades joined EAT in 2013 as its head of marketing, before being promoted to marketing director five years later. In August 2008, she was promoted to chief customer officer before leaving the business in September this year. Earlier this year, EAT was acquired by rival Pret A Manger, in a deal valued at just under £60m. In October, Travelodge announced it was to open six hotels in the run up to Christmas. The hotels, which represent a £45m investment for third-party investors, would create 135 jobs and boost the company’s portfolio to 595 sites in the UK, Ireland and Spain.

Brew by Numbers passes halfway mark in £400,000 crowdfunding campaign: London-based craft brewer Brew by Numbers has passed the halfway mark in its £400,000 fund-raise on crowdfunding platform Crowdcube to move to a new site and add two taprooms to its estate. As well as its Bermondsey brewery, the business runs three taprooms in the area. Brew by Numbers, founded in 2012 and led by Tom Hutchings, is offering 7.55% equity in return for investment, giving the company a pre-money valuation of £4.9m. This week the company extended the campaign until early January. So far, 271 investors have pledged £279,810 with 15 days of the campaign remaining. The pitch states: “Our revenue has grown 30% year-on-year on average for the past five years, from £198,000 in 2014 to £1.2m. We want to move to a larger production site in south east London with a dedicated taproom. We would convert our current brewery in the heart of Bermondsey to a tank bar with pilot kit, serving our beer alongside curated barbecue food. We would invest in brewery equipment to take our beer to the next level and expand our barrel-ageing programme in Peckham. We have many more exciting plans if we overfund.”
 
Pizza Pilgrims reveals more details of Victoria restaurant: Pizza Pilgrims, founded by brothers Thom and James Elliot, has revealed further details of its restaurant due to open in London’s Victoria next month. The venue in Buckingham Palace Road will be the company’s 12th and will be split into four areas, each representing a region of Italy. The bar will be called Amalfi, which inspired the brothers’ alcohol brand Pococello, while the main restaurant will be called Naples and resemble a traditional cobbled piazza with outside seating. The Emilia-Romagna stairway will lead to the Parmigiano Corridor, which will feature rows of Parmesan cheese wheels. The wine room will be inspired by Tuscany and feature a wine wall while doubling up as a private dining room, reports Hot Dinners. Pizza Pilgrims operates ten other restaurants in London and one in Oxford.
  
Just Eat-backed fine dining app hits £100,000 crowdfunding target: Lux Rewards, an app that connects fine diners with hand-picked local restaurants, has hit its £100,000 target on crowdfunding platform Crowdcube as it looks to expand across the UK. The company, backed by Just Eat and founded by James Courtney, is offering 6.25% equity in return for the investment, giving the company a pre-money valuation of £1.5m. So far, 25 investors have pledged £101,130 with 17 days of the campaign remaining. To date, more than 50 restaurants have joined Lux Rewards, including Browns and JKS Restaurants and Mews of Mayfair. In 2016, Lux Rewards raised more than £80,000 on Crowdcube to develop its card-linking technology. The pitch states: “Lux helps high-quality restaurants and bars ditch the discounts – a premium alternative that rewards high-spending customers without devaluing restaurant brands. In exchange, restaurants pay up to 15% in commission. In 2016 we raised our first Crowdcube round to capitalise on this market opportunity. Since then, we have built an experienced and energised team with the goal to make dining more rewarding. After three years of iterations, our card-linked app provides a seamless user experience. We now have the team and technology to scale across the UK.”

Southampton food court plans get go-ahead: Plans to turn a Southampton building into a food court have been approved by the city council. The building in Portswood Road will be converted to house seven food stalls and a cafe deli with tables and benches at the centre. Bars, a soft play area, an office, storage and toilets are also proposed, reports Insider Media.
  
Taunton cinema investment let to Odeon sells for £10.45m: The freehold of a property in Taunton let to cinema operator Odeon has been sold for £10.45m. Altitude Investments led the deal on behalf of a local investor. The cinema is at retail park Herons Gate, near Junction 25 of the M5. The property spans 27,000 square feet and is let to Odeon with more than 18 years remaining. Altitude director George Turnbull told Insider Media: “We are pleased to have concluded another off-market acquisition, proving there’s always room for ‘nimble’ investment firms to transact in these difficult market conditions.”
 
LWC invests £12m in Manchester depot move as it reports turnover up 15%: Licensed drinks company LWC is to invest £12m to move its Manchester depot to larger premises as the business reported 15% growth in turnover. The company will move from its current site in Openshaw in the summer to The Galaxy 173 warehouse and manufacturing facility, which ten miles away in Chadderton. The 173,000 square foot warehouse and distribution facility is twice the size of LWC’s current site. The company has purchased the site for £8.5m and estimated total costs for the move will equate to £12m. LWC also reported turnover had risen 15% to more than £345m for the year ending 30 September 2019 and forecast 10% growth for the next year.

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