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Fri 10th Jul 2020 - Exclusive: Itsu appoints advisers as it eyes restructure
Exclusive – Itsu appoints advisers as it eyes restructure: Itsu, the healthy Asian food chain created by Pret A Manger co-founder Julian Metcalfe, is understood to have appointed advisers as it looks to step up conversations with landlords and explore possible restructuring options, Propel has learned. It’s understood the circa 70-strong company is working with advisory firm AlixPartners on its options, which could include carrying out a company voluntary arrangement (CVA). An Itsu spokeswoman told Propel: “Itsu has been intensely engaged throughout the covid-19 crisis in exploring measures to protect the business and, where necessary, adapt to the changed market place. The company is committed to taking steps, in the short and long term, that are in the best interests of its staff, customers and creditors. Itsu isn’t able to make any further statement at present.” The move comes as the business starts a gradual reopening of its UK estate. The company, which reopened six sites for delivery and takeaway on 26 June, has today (10 July) reopened venues in Cambridge, Leeds, Manchester, Camden, Ealing, Wimbledon, Richmond, Oxford Cornmarket and Westfield White City. The brand, like its food-to-go rivals Pret, Wasabi and Leon, has been particularly hit by the lack of consumers, especially office workers, returning to central London, where the majority of their respective estates are based. It follows the news rival Pret will undergo a restructure that will see 30 of its UK sites close permanently. The move comes after the company experienced a 74% drop in sales year-on-year due to the “significant impact of covid-19 on operating costs and cash flow”. The company, which has so far reopened 339 of its 410 UK sites, said it would start a consultation to reduce headcount across remaining UK shops to reflect lower footfall, rental costs and new safety measures. It also said it planned a reduction in the number of support roles and a sale of the lease for its main support office in London’s Victoria. At the start of June, John Vincent-led Leon appointed consultancy firm Quantuma to help it engage with its landlords and push to change to a turnover-based rent model. It’s thought it could also explore a restructuring. Last week Propel revealed Wasabi, the sushi and bento chain led by Henry Birts and backed by Capdesia, was looking to secure new investment that could include a sale of the business. The company appointed restructuring adviser KPMG in May to explore a full range of strategic options, which now include seeking new investment partners or a purchaser for the business alongside raising funds from existing investors. On Wednesday (8 July), Zest Food, the trading subsidiary of London-based healthy eating brand Tossed, filed a notice of intention to appoint administrators.
Indoor hospitality in Wales to reopen from 3 August: Welsh first minister Mark Drakeford has confirmed indoor hospitality will reopen from Monday, 3 August “if conditions allow”. Drakeford also said while the two-metre rule remained, businesses that would see revenue hit by such measures would be permitted to operate at less than two metres with mitigations in place. Self-contained accommodation will open tomorrow (Saturday, 11 July) and attractions that aren’t underground can resume operations from Monday (13 July). Camping and additional similar accommodation will be allowed to welcome guests from Saturday, 25 July if conditions allow. David Chapman, UKHospitality executive director for Wales, said: “This is a vital move and one the industry has been desperate to hear. The August period accounts for a substantial portion of annual revenue and the immediate sustainability of many of our businesses will depend on this reopening being successful. That being the case, we are asking the Welsh government to consider, if the health climate allows, reopening three days earlier – on Friday, 31 July – to enable a full August of bookings for the sector. We have offered to work with ministers to develop final indoor opening guidelines to ensure a safe enabling of the delivery of either opening date.”
UKHospitality is a Propel BeatTheVirus campaign member
Majority of Brits still feel uncomfortable eating at restaurants: The majority of Britons still feel uncomfortable at the prospect of eating at a restaurant, an Office for National Statistics (ONS) survey has suggested. More than 20% of the 1,788 respondents in England, Scotland and Wales said they would be happy to have a sit-down meal as restrictions ease. Three-fifths (60%) said they would be “uncomfortable” or “very uncomfortable” eating at venues indoors during the pandemic. The survey has been released as the government prepares its £500m Eat Out To Help Out scheme. Meals eaten at participating restaurants on Mondays, Tuesdays and Wednesdays in August will be subsidised up to £10 a head. Chancellor Rishi Sunak has also reduced hospitality VAT from 20% to 5% to encourage spending. The weekly ONS survey – the first since lock-down measures eased in England on 4 July – found men were slightly more confident about eating out than women. Fewer people aged 69 and below said they would be uncomfortable at a restaurant than those aged over 70. The survey suggested opinions are more evenly split on eating outdoors at a restaurant, with almost two-fifths (37%) saying they would be “comfortable” or “very comfortable” and a similar number saying they wouldn’t. Respondents also expressed reluctance to visit the cinema – with more than 13% saying they would be “comfortable” or “very comfortable” watching a film indoors. Last week, the World Health Organisation revised its warning over indoor transmission of the coronavirus as it acknowledged it can be spread by tiny particles suspended in the air.

Drink sales down circa 50% on pre-lock-down levels as pub-goers choose pints: Total drink sales in managed pubs and bars that were open last weekend were down 49% on pre-lock-down levels on Saturday and 52% on Sunday, CGA’s new Drinks Recovery Tracker has revealed. Beer sales held up best but were still down 36% on Saturday and 43% on Sunday on pre-coronavirus levels. The Tracker compares the average daily drinks sales per site to the market average on the equivalent Saturday and Sunday in 2019. Spirits performed roughly in line with the market on Saturday, with sales down 50% on pre-lock-down rates, but had a better day on Sunday, down 45%. Sales of alcohol outperformed soft drinks over the first weekend, with soft drinks sales down 58% on Saturday and 55% on Sunday. CGA said this may be explained by people staying local and not driving. “Beer’s relatively better showing highlights the struggle of recreating the draught pint experience at home, which has clearly left consumers thirsting for that first pint,” said CGA’s director of client services Jonny Jones. The picture of drinks sales in managed pubs and bars in England is broadly in line with the total sales numbers collected by CGA’s Coffer Peach Business Tracker, which saw overall like-for-like trading in the managed pub, bar and restaurant sector down 45% on the same weekend last year.

Starbucks customers forced to wear face coverings inside US company-owned stores: Starbucks has announced customers will be required to wear face coverings inside all company-owned sites in the US from Wednesday (15 July). Customers won’t be required to do so in drive-thrus or when picking up kerbside “unless locally mandated,” the company said. Starbucks stated: “The company is committed to playing a constructive role in supporting health and government officials as they work to mitigate the spread of coronavirus. Our partners have the right and responsibility to refuse service to customers who aren’t wearing facial coverings.” The move comes after a post on Facebook showed a customer complaining when a San Diego Starbucks barista refused to serve her in late June because she wasn’t wearing a mask. As a result of the viral post, almost $100,000 was raised through a Go Fund Me for the barista, who stood his ground. The new policy, which was announced ahead of time so “customers and partners have the space and time to prepare”, will be enforced alongside other previously announced safety procedures, including temperature checks and frequent employee hand-washing.

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