Story of the Day:
Guardian highlights Nando’s complex offshore tax arrangements: The Guardian has highlighted the “secretive £750m trust located in a Channel Islands tax haven” that sits at the top of an elaborate offshore web of companies controlling the Nando’s chain. The Guardian stated: “The restaurant group – ultimately owned by Dick Enthoven, a South African tycoon – also uses a battery of offshore techniques, including companies in Malta, Guernsey and the Netherlands, to legally reduce its UK corporation tax bill by up to a third. The use of an offshore trust would mean that the Enthoven family would stand to avoid UK inheritance tax on all their fortune. But the restaurant group points out that it paid £12.6m UK corporation tax last year. The offshore world of Nando’s is particularly elaborate. The family’s personal cash pile, their £8m Wiltshire stately home, and their corporate structures all have offshore addresses. Rent for the restaurants is paid to a separate UK company, itself also owned by a Netherlands intermediary. In addition, the financing to fit out each restaurant comes through Channel Island loans, with £5m in “finance charges” last year moved offshore to an entity in Guernsey, called Nando’s Leasing Ltd. The chicken business profits ultimately flow to a Luxembourg low-tax registered partnership. Accounts show the Luxembourg entity then pays cash over to the tax-free Jersey family trust as interest on a £750m loan.” A Nando’s spokesman stressed that the company does pay appreciable UK corporation tax and said its licensing fee was standard. “In the UK, Nando’s Group Holdings Ltd incurred corporation tax of £12.6m on a profit of £58.2m with revenues of £485.2m in the year ending February 2013,” he said. The Guardian calculated that the tax bill might have been half as much again, at £18m, had ‘off-shoring arrangements’ not existed. Nando’s added: “Nando’s is a concept founded in South Africa. Nando’s in the UK is one of 22 national franchises operating globally. All the franchises operate under standard market licensing arrangements and this includes the brand licensing fee. This franchising arrangement enables the UK company to access expertise, intellectual property and capital from the company’s global operations and has helped fund its growth.”
Merlin Entertainments boss – government has already granted sector VAT concessions: Merlin Entertainments’ chief executive, Nick Varney, has argued the case for a VAT reduction to help the tourism industry. He told The Daily Mail: “The Treasury tells us that it doesn’t agree with giving discretionary VAT rates but, actually in two businesses, they have done. One is Boris’ (Johnson) cable cars over the Thames, which has a 5% VAT rate, and the other is (Chief Secretary to the Treasury) Danny Alexander’s constituency on the ski lifts, which get a 5% rate. It frankly does my head in that a government that purports to be interested in tourism currently has two policies on [hard to obtain] visas and VAT that run counter to its objectives.”
Wiltshire Pub Company backs Tax Equality Day: The Wiltshire Pub Company, led by the former Mitchells & Butlers executive Sheila King, has pledged its support to Tax Equality Day on Wednesday 24 September. The event will see pubs and restaurants drop prices by 7.5% to demonstrate the benefits of lower VAT in the hospitality sector. King said: “We want to get involved in as much as we can.”
Whole Foods opens first bar at Texas site: Whole Foods, which operates nine upmarket supermarket sites in the UK, has opened its first bar with its own entrance in Colleyville, Texas, serving pizza that is awaiting Italian government certification, baked in a 900-degree wood-burning oven. Whole Foods Market is opening a stand-alone bar with pinball machines, three TVs, booths and food service. It is the first Whole Foods with a separate entrance to the bar from the parking lot. The grocer is also planning a craft beer brewery in a store under construction in Houston, Texas. Whole Foods has applied for the Verace Pizza Napoletana certification for its pizzas.
Microbrewer wins lifetime achievement award: Keith Bott, recently retired chairman of the Society of Independent Brewers (SIBA) and an influential figure in the British brewing scene for the past 30 years, was yesterday presented with a lifetime achievement award from the All Party Parliamentary Beer Group. The chairman of the Parliamentary Beer Group, Andrew Griffiths, said: “Keith’s impact on the British brewing industry is immeasurable, and it is no exaggeration to say that without his involvement over the last three decades the sector would look very different. He has been a towering presence in the modern, forward-looking brewing industry that his vision, and his tireless campaigning, have helped to shape. For his unique contribution to British brewing, Keith is a very worthy recipient of our lifetime achievement award.”
Restaurateurs form ‘Lily & Skinner’ support group: A group of ten female hospitality entrepreneurs in Hackney, East London have formed a collective called Lily & Skinner, from the cockney rhyming slang for “dinner”, which will provide support for members from joint marketing to group purchasing. The collective’s founder, Emma Reynolds, who is also co-founder of the Japanese ramen restaurants Tonkotsu and Tonkotsu East, told the London Evening Standard: “It’s a total coincidence that it’s all women. It came out of a conversation with Missy [Flynn] at Rita’s. We had a chat about how we could help each other out. Perhaps when a member of staff doesn’t suit us, and might suit a pub better, for example, or doing staff incentives such as offering a £50 voucher for each restaurant. Then we thought about our friends in other restaurants, we started to collate names, and we realised it was all women.” Lily & Skinner is now looking to widen, and spread its ideas on social media @LilyandSkinner.
Flowify launches front-of-house software tool: The hospitality software company Flowify has launched an interactive software tool that works as a real-time adviser to front-of-house restaurant teams. The program, named Sofia, is designed to act as a personal assistant to front-of-house teams, helping them keep track of all the service points during a customer’s journey, and delivering service in line with a company’s brand standards and service targets. Laura Baines, Flowify’s chief operating officer, said: “Sofia has been designed to provide front-of-house staff with the tools to deliver an outstanding customer experience every time. One of our early trial sites reported an incredible 23% increase in dessert sales, just because staff were prompted to ask a customer which dessert they would like.”
Giggling Squid to hit ten sites next month: Giggling Squid, the Thai brand led by Andy and Pranee Laurillard that has aspirations to become the UK’s first national Thai brand, will open its tenth site, in Sevenoaks, Kent ,on 4 August, in a former Strada site converted at a cost of £250,000. The company also has sites lined up in Maidstone and is in discussions of a number of other openings. Andy Laurillard told Propel: “It will have 100 covers and is in a really good location.” The company’s most recent opening is in Horsham, West Sussex, a former Giraffe site that is grossing between £25,000 and £30,000 a week.
Chicago Leisure reports success at remodelled Yeovil site: Chicago Leisure, the eight-outlet operator of Chicago Rock Cafe site sites led by Christian Rose, has reported that its evolved offer in Yeovil, opened six months ago after a £500,000 investment, has beaten forecasts. Like-for-like sales have risen by 52% and food sale have grown by 60% after a new seven-day-a-week food offer was introduced. The company converted the Modello Bar & Kitchen, in Star Lane, Yeovil into an updated version of the American-influenced restaurant with bar. It now serves a menu featuring steaks, burgers, milk shakes and American beers and wines. The site was chosen by Chicago Leisure as the first of its eight venues to be refurbished. It is also actively looking for new sites to expand the Chicago Rock Cafe brand. Rose, Chicago Leisure’s chief executive, told Propel: “The results at Yeovil have beaten expectations and gives us great confidence for the future.”
Antic London accused of thumbing nose at one of London’s poorest boroughs: A former job centre in South London that has been converted by Antic London into a pub under the same name is facing a backlash after local residents and online campaigners condemned it as insulting and in poor taste. The Job Centre bar in Deptford, which promises upmarket pub food in an atmosphere of “quirky design features inspired by its function as a place that once served the unemployed”, found itself at the centre of a social media storm as people accused the owners of flaunting “ironic gentrification” in an area that remains one of the poorer parts of the capital. The closure of the Deptford job centre in November 2010 had been contentious, with local councillors and residents fighting a campaign to keep it open to help tackle high levels of deprivation and unemployment.
Joseph Holt report decline in profit in 2013: The Manchester brewer and retailer Joseph Holt has reported turnover rose 2.6% to £46.21m in the year to 31 December 2013, up from £45.02m the year before. Pre-tax profit, however, dropped almost 20%, to £2.92m, from £3.65m the year before. Holt said: “The brewing industry continues to experience tough trading conditions. The company has made significant efforts in developing its managed estate, tenanted opportunities and free trade business but operating profit remains under pressure from cost increases and the general downturn in the economy. 2014 will prove no less challenging.”
Hawksmoor expands outside London: Hawksmoor has secured its first restaurant site outside London, via the property agent Shelley Sandzer and Henry Boot Developments. Hawksmoor is making its regional debut in Manchester with a 7,824 sq ft split-level restaurant at The Courthouse, Deansgate. Hawksmoor Manchester is due to open in 2015. The restaurant in the listed building will be fitted into 5,159 sq ft of ground floor space and a 2,665 sq ft basement. Adam Brady, head of the Manchester office at Henry Boot Developments, said: “The brief for Shelley Sandzer was simple: find a brand that would be suited to this unique location and ensure The Courthouse becomes a dining destination in its own right. They have done a great job, bringing to bear their expertise and market knowledge, combined with a unique understanding of our needs, to find the perfect brand for this central Manchester property. We are delighted to be hosting Hawksmoor’s first restaurant outside of London.” Camilla Topham, an associate partner at Shelley Sandzer, said: “The listed Courthouse building is the ideal site, given its prominent location in the city, to create a new dining destination in Manchester. The layout of the space allows Hawksmoor to create something quite spectacular for its regional debut. Manchester has a thriving culinary scene and, with many brands looking to expand outside of London, it is the obvious choice.”
Jonathan Segal – STK was offered London site Smith & Wollensky is opening on and turned it down: The One Group, the American-based hospitality company founded by Briton Jonathan Segal which runs the STK steak chain, has revealed that it was offered the site off The Strand in London that the rival American steak chain Smith & Wollensky will be moving into next year, but turned it down for being too far off the main routes. Segal, speaking at the ME Hotel in the Strand, where the One Group runs all the F&B offering on behalf of the hotel’s owner, Melia, said the site, in the Adelphi Building on John Adams Street, was too hidden away to be the launchpad for a brand that would be little-known when it arrives in the UK in 2015, despite its high profile back home in the United States. Segal also revealed that the One Group was looking to grow to “no more than 50” STK restaurants globally over the next five years, from the current nine US outlets, plus one in the Strand alongside the ME Hotel, with “one or two” more in London, in Canary Wharf and Knightsbridge, as well as 12 to 15 in total in the US. The company is also looking at 125 to 150 world-wide outlets for its STK Rebel brand, a less expensive spin-off of STK due to be launched in 2015, with “half a dozen” branches in London, and one being sought right now in Manchester. “All the expanding group fine-dining businesses are creating an under-brand: Del Frisco’s with Del Frisco’s Grill, Morton’s with Morton’s Grille, Smith & Wollensky with Wollensky’s Grill, STK with STK Rebel”, he said. “We’re going to see an expansion in casual dining, rather than fine dining, before we see an expansion in fast-casual dining. It’s going to be in that $40 to $50 range.” Average spend in an STK outlet is around $113 (£66) a head, Segal said, against $106 in a Del Frisco, though Del Frisco is 4% to 5% more expensive. That, he said, was because STK took a much higher percentage – around 45% – in liquor sales than its rivals, something Segal puts down to STK having a live DJ in each restaurant, who “reads” the atmosphere and adjust the music being played to “create somewhere that people will stay behind in after their meal and have an extra couple of drinks.”
Wetherspoon buys Middlesex hotel, beats developers and C-store operators: JD Wetherspoon has bought the freehold of the Grade II-listed Greenwood Hotel in Northolt, Middlesex, through the property agent Fleurets off a guide price of £2m. Will Thomas of Fleurets said: “Our marketing generated a great deal of interest, which was largely from developers and C-store operators, which is often the case theses days, so it is reassuring to the property will remain a public house. I look forward to seeing what Wetherspoon will do with the property now, it is creating some exciting new pubs and hotels which are very different to the historic model they have been so well known for.” The property, which had been partly refurbished but has not traded for a number of years has a footprint of around 8,600 sq ft, 11 en-suite letting rooms, a large bar area and a double height ballroom. To the rear is a car park, while the front constitutes an additional trading area.
PizzaExpress, Stonegate, Ask, Giraffe, Wetherspoon, Wahaca sites go to Allsop auction: A number of freeholds occupied by major brands featured at an Allsop commercial auction in London on Tuesday. A site in Islington traded as a Slug & Lettuce by Stonegate Pub Company on a new 25-year lease with a rent of £126,696 per annum, was offered with a guide price of £2.35m – and sold for £3,160,000 (a yield of 7.37%). A second site let to Stonegate, The Old Bank, in Sutton, Surrey, on a new 25-year lease with a rent of £127,363 per annum, offered with a guide price of £1.75m to £1.85m sold for £1,760,000 (a yield of 7.24%). A freehold site in Liverpool let to JD Wetherspoon, trading as a Lloyds No 1 Bar, on a lease expiring in 2038 with rent of at £140,000 a year sold for £1.97m (producing a yield of 6.72%). A Bournemouth site on Post Office Road, let to PizzaExpress for £90,000 per annum on a lease expiring in 2036, was offered with a guide price of between £1.5m and £1.65m but did not sell. A site in Weybridge, Surrey, trading as Osso Buco but on assignment from Giraffe Concepts on a lease that expires in 2027 on a current rent of £65,000 per annum, was offered with a guide price of between £925,000 and £975,000 and sold prior. A site in Welwyn Garden City let to Ask Italian on a lease that expires in 2027 on a current rent of £69,000 per annum, was offered with a guide price of £975,000 to £1m – and is still available. The freehold of The Pennsylvanian in Rickmansworth High Street, let to JD Wetherspoon on a rent of £125,918 per annum with a lease expiring in 2034, was offered with a guide price of £2.15m but is still available. A site in Upper Street, Islington, let to Wahaca on a rent of £200,001 per annum on a lease expiring in 2038, is offered with a guide price of £3.65m to £3.85m – and is available for £3.75m. A freehold in King’s Lynn, Norfolk let to Spirit Pub Company at £66,000 a year on a lease expiring in 2028 was offered with a guide price of £775,000-plus – and is still available.
San Carlo operator reports turnover and profit boost: The San Carlo restaurant operator Harnbury Holdings has reported a rise in profit and turnover in the year to 30 September 2013. Turnover climbed 19.6% to £27.78m from £23.23m the year before. Pre-tax profit rose to £895,00 from £890,000 the previous year. The company said: “The opening of two new restaurants towards the end of the prior year, San Caro Fumo in Birmingham city centre and Cichetti Piccadilly in central London, with a full year’s trade in the current year, contributed to this increase in turnover.” The company franchised the brand for an opening in Beirut in December 2012. Openings in 2014 include Hale in Cheshire, Covent Garden in London and St Peters Square, Manchester. Dividends of £200,000 were paid in the year.
Four JDW sites in Newcastle to close at midnight to avoid levy: JD Wetherspoon is to cut the opening times at its four bars in Newcastle upon Tyne at the weekends in response to late-night levies being introduced by the city council. The bars that have to pay the levy to Newcastle Council are the High Main in Byker and the Five Swans, the Union Rooms, the Quayside, Keel Row and the Mile Castle, all in the city centre. The levy will be introduced in Newcastle in November. Wetherspoon’s chairman, Tim Martin, said “almost all” of the firm’s pubs stayed open until 1am on Fridays and Saturdays, but they will now close early in areas where the levy is introduced. Martin said: “It is not economically viable for us to be open for those two hours over the weekend. Pubs already pay a heavy tax burden compared to other types of businesses.”
No Saints closes Norwich Wonderland nightclub: No Saints, the company led by nightclub veteran Stephen Thomas, has closed its Wonderland site in Norwich because it was “unprofitable” and the venue was subjected to “over-reaction” from police. The move came after an 18-year-old customer was badly injured in his left eye after being hit with a glass bottle at the club during an England game. Thomas claimed police were attempting to put unfair restrictions on the club licence, something the force denies. He said: “The club is not profitable, so I’ve been supporting it personally. It has not been troublesome, but we pulled some levers on Saturday to market the World Cup coverage, and there were some violent repercussions that we are not comfortable with. What the police wanted to do was an over-reaction. Bearing in mind this is the first incident we’ve ever had, they were trying to put restrictions on our licence. We’ve never had trouble before and considering what happens in other clubs, I thought that was unfair and aggressive.” Inspector Ed Brown, from Norfolk Constabulary’s licensing department, told the local newspaper: “It is entirely appropriate that police should be making sure the venue doesn’t make those same mistakes again. Everything else we’ve done is standard licensing. We’ve not asked them to close or to suspend their licence. Whether they stay closed or not, I don’t know, but that’s not down to police licensing intervention.”
Activ Group boss confirms “not in administration”: Matthew Clark, the founder of Activ Group, has refuted claims that the company has gone into administration. He told Propel that Activ, which operates bars and nightclubs, predominantly in the East Midlands, as well as a portfolio of residential and commercial property, is in fact still looking to expand, with an application to open a further entertainment venue now lodged. Clark added: “Activ Group remains very strong with considerable assets. One of the subsidiary management companies ceased trading some time ago, a decision to close was taken by a director in April this year. A technicality in that some of our licences had been applied for in the name of that company. But Activ Group and our leisure businesses are unaffected – our latest opening, The Assembly Rooms in Boston is trading better than projected, leading to our expansion in the sector into further locations.”
London bar operator plans Clerkenwell opening: The team behind the London bars Bourne & Hollingsworth and Reverend JW Simpson is to open a modern brasserie and bar in Clerkenwell, central London this autumn. Bourne & Hollingsworth Buildings is due to open in Northampton Road, just off Exmouth Market, in mid-September, with a 70-cover restaurant and greenhouse, a cafe area, private dining rooms and a large bar serving cocktails. The design is a collaboration between the in-house creative team, Lionel Real de Azua from Red Deer Architects and Louise Davies of Box 9 Architects, whose other projects have included Riding House Cafe, Pizza East and Soho House Berlin. Bourne & Hollingsworth Buildings will have what the Bourne and Hollingsworth team call “pared-back, classic interiors” that are light, clean and “almost minimalist in their design”.
BrewDog teams up with Pieminister to turn its beer into pies: Scottish brewer and retailer BrewDog has partnered Pieminister to create two pies that use two of the craft beer company’s most popular beers. BrewDog’s 5am Saint and Punk IPA beers have gone into two pies, the Moondog and the Chick ’n’ Hop, which will be available in Pieminister shops and BrewDog’s UK bars nationwide. The pies were named by BrewDog shareholders, who were asked to come up with names at the company’s AGM. The Moondog is a combination of British beef and free-range British smoked bacon slow-cooked in a 5am Saint Ale gravy while the Chick ’n’ Hop is made with free-range British chicken, free-range British ham and West Country cheddar. Jon Simon, Pieminister’s founder and managing director, said: “BrewDog has shaken up the British brewery industry, making beers for the people, by the people. We like what they stand for and knew that if we gave BrewDog’s shareholders some pies to taste, rate and name, they wouldn’t mince their words. Luckily for us, the pies went down a storm and the punks have given them their blessing.”
Contract caterer to open Costa sites at 70 schools: The contract caterer Taylor Shaw is opening Costa Coffee outlets at 70 colleges around the country. One is opening at Camborne School and International Academy in Cornwall in the autumn term. The outlet is only for the use of sixth-form students and teachers and will provide employment opportunities for older pupils. Vice-principal Andrew Dodd said: “For our ever-increasing sixth form to have their own restaurant/cafe in which they can seek employment empowers the students to feel assured about the world of work. The students employed at the new cafe will manage their time between lessons and learning, giving them the opportunity to earn a wage while continuing to study for their A-levels prior to leaving for university or to the world of work.”
Original Bowling Company reports revenue growth: Original Bowling Company, the owner of Hollywood Bowl and AMF Bowling centres, has reported a successful year with a £2m growth in revenue. Turnover increased to £70.2m for the year to 30 September 2013, up from £68.2m the year before, the company’s accounts have revealed. Pre-tax profit fell to £1.3m from £1.5m in 2012. The figure was affected by an increase in administrative expenses and loss on sale of fixed assets of £202,000. The company generated a “satisfactory” level of earnings before depreciation, amortisation, interest and tax (Ebitda) amounting to £11.61m, up from £10.9m the year before. The company said it plans to continue targeted investment in new and existing sites and to further develop the Hollywood Bowl and AMF Bowling brands. Two new bowling centres were opened during the year and a third opened shortly after the year end in October 2013.The Original Bowling Company, which describes itself as the UK’s largest tenpin bowling operator, has 42 bowling centres across the UK. The company was formed in 2010 from the merger between AMF and Hollywood Bowl, which it acquired from Mitchells & Butlers.
Fuller’s to refurbish Chiswick pub: Fuller Smith & Turner is to close its George IV pub on Chiswick High Road in West London for a refurbishment later this month. The pub will close its doors on 28 July. The company said that after the refurbishment, the George IV would remain a pub holding true to the Fuller’s values of great beer, wines, pub food and excellent service.
Zizzi signs for Beverley scheme: Zizzi, owned by Gondola Holdings, has signed for a new leisure development, Flemingate, in Beverley, Yorkshire. Parkway Cinemas is to provide the leisure anchor with a 33,723 sq ft five-screen digital cinema, with live theatre facility. Flemingate will also include an 80-room Premier Inn hotel. Zizzi has signed for a 3,200 sq ft site. The developer, Wykeland Group, is targeting similar aspirational casual dining brands for the five other restaurant units. Dominic Gibbons, managing director of Wykeland Group, said: “Whilst Beverley is an extremely well-established town locally, Flemingate adds significant regional appeal. We are creating large format stores and providing a complementary dining and leisure offer that together extend Beverley town centre. Our focus now is on carefully selecting the right mix of brands to create a critical mass of offer that draws visitors from across the region.” Scott Marshall, managing director of Parkway Cinemas, said: “Beverley has been without its own cinema for many years, leaving locals with no choice but to travel out of the town. We will be providing Beverley and surrounding area with a state-of-the-art, independent cinema, complete with live theatre facility.”
Sector supplier set to expand after £150,000 grant: A dessert manufacturer is set to create 30 new jobs thanks to a £150,000 inward investment grant. The Ministry of Pudding, which is owned by The Ministry of Cake, a frozen dessert manufacturer for the food services market based in Taunton, Somerset, is expanding its operations to open a site in Torquay with help from the Torbay Growth Fund. Ministry of Cake currently employs more than 250 people and has an annual turnover of £25m. It supplies Caffe Nero, TGI Friday’s and Hard Rock Cafe with its cake products.
Subway opens 50th site within Euro Garages estate: Subway and Euro Garages have opened their 50th integrated Subway store as part of growth plans. The store marks the mid-point of Euro Garages plan to open 100 Subway stores by 2016. The shop was opened at Leamore service station in Walsall in the West Midlands, creating 15 new jobs. Mike Charest, assistant regional director for Subway Europe, said: “The Subway brand partnership with Euro Garages is going from strength to strength and the opening of the 50th store is testament to that. The forecourt and convenience sector is a key area of growth for the Subway brand. The simple operations that are involved in running a Subway franchise and the convenience offer make it a perfect fit for these styles of location.”
Dunkin’ Donuts lines up ninth UK opening: Dunkin’ Donuts is to open in Hounslow, West London, its ninth UK opening. The new outlet is on Hounslow High Street, beside the lingerie shop Ann Summers. The company opened its first UK branch in Harrow, North London in December and currently has eight stores in the country, four of which are at motorway service stations, and is planning to open many more.
Historic East End pub wins Camra award thanks to female appeal: The Dispensary Pub & Dining Room at Aldgate East has been named the Campaign for Real Ale’s East London Pub of the Year, largely because of its appeal to female beer drinkers. The Dispensary serves a high proportion female real ale drinkers attracted by its welcoming ambience and wide selection of craft beers. Landlady Annie Smith, who co owns the pub with partner David Cambridge, with whom she restored and opened The Dispensary in 2006, said: “Despite the clichéd image of pot bellied, bearded real ale drinkers dressed in duffle coats and bad shoes, ale has numerous health benefits over drinking wines, spirits and even many soft drinks – when consumed in moderation.”
Birmingham councillors reject plan for fourth lap-dancing club on Broad Street: Birmingham councillors have rejected plans for a lap-dancing club on Broad Street, the heart of the city’s entertainment district, because it would have been “one sex establishment too many”. An application to open the venue, which would have been called Paradise, by Eutony Ltd was turned down for the second time last month. Members of the licensing and public protection committee have now issued reasons for refusal, saying a fourth club along the street would alter the family-oriented character of the “Golden Mile”. Broad Street already has three lapdancing bars, the Rocket Club, Cyclone and Legs 11.
Australian Pizza Hut franchisees fail in court attempt to block new price strategy: A group of 80 Pizza Hut franchisees in Australia has failed in its bid to stop parent company Yum! Restaurants from introducing a new sales strategy as the local pizza wars heat up. The group applied for an injunction in the Federal Court to prevent Yum! from introducing its “reduced price strategy”, which will involve lowering the price of Pizza Hut pizzas to less than A$10 (£5.50) as well as reducing the number of products on Pizza Hut menus. While Yum! argues the strategy will allow it to sell more pizzas and compete in an increasingly price-driven local pizza market, the franchisees claim the strategy will be disastrous for their profitability, potentially costing them up to A$10m and putting some of them out of business. Yum’s market director, Kurtis Smith, said in a statement to the court that the strategy was developed “in response to a concern about the downward trend in financial performance and the steady loss of customers in the Pizza Hut business in Australia over the last ten years. In addition to the downward trend in sales, market share and profitability during the period 2004 to 2014, the indebtedness of franchisees to their marketing fund [which is provided for in the franchise agreement] and to Yum has also increased,” Smith said.
Depardieu to open three restaurants in Russia: Actor Gerard Depardieu has announced plans to open three restaurants in his adopted country of Russia, where he became a citizen after complaining about French taxes. The Frenchman told a Russian newspaper that he would open the first establishment, named Gerard, in Moscow in October. “It will be simple food, that’s what I love, French and Russian dishes,” he said. “I also hope to open restaurants in St Petersburg and Saransk.”
InnBrighton reports underlying Ebitda increase in 2013: InnBrighton, the company led by Gavin George and Gary Pettet in which Luke Johnson’s Risk Capital Partners has taken a stake and which is now called Laine Pub Company, has reported a rise in Ebitda for 2013. The company saw turnover rise 9.5% to £25.2m in the year ended 30 June 2013, up from £23m the year before. Like-for-like sales rose 8.8%. Underlying Ebitda grew by nearly 4.5% to £3.18m. Gross margin remained at 70%. In March this year, the company undertook four sale and leasebacks of freeholds held in a subsidiary company to provide additional cash for capital investment and a partial bank loan repayment. The company had exceptional impairment losses of £839,000 arising out of a tri-annual revaluation and exceptional costs of £118,000 relating to the disposal of property, producing a loss of £2.67m for the year. It said: “Having grown sales and gross profits through all but one of the recession years since 2008, the directors are very confident about the company’s prospects for the mid and longer terms.” The company’s accounts state that there is no controlling party: management, Risk Capital and Graphite Capital are understood to hold similar stakes in the company. A source close to Risk Capital told Propel last month that the private equity firm had invested “rather less than” the £12m it sets as a ceiling for investments to acquire a minority stake in InnBrighton. The source said at the time: “There are 50,000-plus pubs in the UK and some smaller pubs with low income will continue to close. But well-invested, well-located pubs have a good future. We think InnBrighton has a good operating model and a good portfolio of pubs in Brighton, and a nascent presence in London.” Ben Redmond, co-founder of Risk Capital Partners, said last month: “Over the past seven years, Gary and Gavin have refocused the business successfully and developed a profitable estate of highly distinctive city pubs. The company has a strong pipeline of new opportunities in London and is well positioned to continue to grow the business in the future.” Filing of InnBrighton’s 2013 accounts was delayed while the investment from Risk Capital Partners was finalised.