Subjects: The refurbishment dilemma, east meets west, and great cause for optimism and positivity
Authors: Glynn Davis, James Hacon and Ann Elliott
The refurbishment dilemma by Glynn Davis
When Gordon’s Wine Bar in Villiers Street near Charing Cross station in central London closed some years ago for a refurbishment the length of its closure led to reports of its demise. It seemed it had become yet another victim of wretched property developers. But then it suddenly reopened and the result of its serious overhaul was it looked identical to when it closed its doors. I can only assume a great deal of the essential infrastructure had been ripped out like the decrepit-looking electrical systems and some of the fabric of the building had undoubtedly been brought up to date with new regulations. But beyond this nothing was any different.
Owner Simon Gordon had ensured it visually looked exactly the same. It was repainted in a colour that clearly reflected the nicotine-stained original and the old exposed electrical cabling was replaced with what looked to me like a fake version hanging loosely around the walls. He knew the old wine bar’s appeal lay in its timelessness and obvious links to the past.
The complete opposite end of the spectrum to this are nightclubs. Peter Marks, chief executive of nightclub operator Deltic Group, recently stated nightclubs and bars have to completely reinvent themselves every six or seven years in order to survive. Their owners then have to ensure they get their money back within two years in order they can then make sufficient profits over the following four. A failure to do so would put into doubt the ability to invest in the next reinvention of the club or bar. This is an extremely cyclical and pressured scenario but if handled successfully can be seriously profitable if the venue becomes a town’s “go-to” club or bar for a period of time.
When I chatted with Pivovar Group co-owner Jamie Hawksworth about the massive investment his company had made in pubs like the York Tap and Sheffield Tap he had a tad of envy for BrewDog who had simply created a cost-efficient template for the industrial chic look of its bars, which could easily be rolled out for very little money. But the reality is these bars will inevitably have a finite lifespan and will need an injection of cash at some point in order to give them a new look and keep them relevant to their typically young customer base. In contrast, the two Tap pubs can probably sit largely in their present state indefinitely.
It’s a similar story with pub company Sam Smiths, which is methodically refurbishing some of its pubs in central London and, rather like Gordon’s, when they reopen they tend to have a very similar look to when they closed. And they will absolutely not need any further investment for generations.
Marks likes to link bars and nightclubs together and reckons they have a very different model to pubs. This might be largely correct but the reality is these things are never quite that simple and definitions are increasingly blurring. The beauty of the leisure and hospitality industry is it is so obviously not black and white. He himself admits he would not assign institutions like Fabric and Ministry of Sound to the typical reinvention cycle of other clubs. Most bosses in the industry will recognise the decision-making process over refurbishments is extremely sensitive. Outweighing the likely uplift in sales an overhaul will bring versus the level of capital expenditure required is a vital calculation that could determine success or failure.
Maybe some learning can be taken from the retail sector where we are starting to see the emergence of progressive merchants who use innovative flexible interiors. The Direct Soccer outlet, just off Carnaby Street in London, showcases premium football boots and can be completely overhauled in an incredible two hours to look like something entirely different. With its use of modular fixtures and fittings and plenty of digital content that it reconfigures from its website and throws onto various digital screens and devices in the store it undergoes transformations on a constant basis and keeps the customers flocking in.
It might provide some pointers for how physical space could be efficiently and cleverly used in the future. But as valuable as this might be for some businesses I suspect it will be completely worthless to people such as Gordon and his atmospheric wine bar.
Glynn Davis is a leading commentator on retail trends
East meets west by James Hacon
Hong Kong is a true global powerhouse, long considered the gateway between east and west. Even with the hyper-growth of major cities Beijing and Shanghai, the city remains vital to the Chinese government, which benefits greatly from its unique status – a territory fully immersed in the global economy and sealed off from the mainland yet closely controlled by the Communist Party in Beijing.
News reports suggest Hong Kong is home to 60,000-plus restaurants, a claim that is impressive yet hard to prove given the culture of small street-corner eateries. Yet walking the winding, bustling streets, it certainly seems plausible. This is the city that pips London to sixth spot in the global ranking of Michelin stars, boasting 87 stars in total to London’s 79, with four more three-star restaurants too. It’s not just the high end that’s succeeding either. Research conducted in 2015 by Nielsen revealed Hong Kong residents are the most likely in the world to eat away from home at least once a day. When considering what great value dining out can be in the city, you can see why. I paid less than £10 for dining at two different Michelin-starred restaurants, well worth the two-hour queues.
As you might imagine, established international fine-dining brands such as Nobu, Caprice and Zuma are well represented, mostly through tie-ups with international hotel brands. Fast food is present but interestingly less prevalent than you might think, with traditional Cantonese street restaurants and stalls being the preferred choice for a quick bite.
Speak to locals and you’re told western cafe culture is on the rise, which may be a surprise in a destination that traditionally served green tea before water when eating out. Coffee is making more of an appearance on menus generally, while independent coffee shops are springing up across the city. Local brand Pacific Coffee competes with Whitbread-owned Costa Coffee and Starbucks, which made its debut in the city in 2000 and has grown to 137 sites in the territory, operated by Coffee Concept.
Despite the shared history with the UK of more than 150 years and significant cultural synergies, few British restaurant brands seem to have made the journey to Hong Kong. Of the few brands to succeed, many are in the guise of celebrity chefs. Jason Atherton is perhaps the best example, with three restaurants in the city in collaboration with JIA Group and its founder – Asian-based hotelier and restaurateur Yenn Wong. The first two of Atherton’s concepts to launch were 22 Ships and Ham & Sherry – both tapas-style outlets – while Aberdeen Street Social takes the same shape as his Social Company outlets in London, offering modern British cuisine.
Walking along busy Queen’s Road in Hong Kong’s crowded commercial centre, I was surprised to spot a lone sign pointing the way to another British-born concept, Gaucho. After a successful overseas launch in Dubai followed by an audacious move to take the concept to Buenos Aires, Hong Kong was the third international location for the brand, which launched on the fifth floor of the LHT Tower in 2014.
Moving to home-grown concepts one deserves mention before all others – Tim Ho Wan, renowned for being the world’s least expensive Michelin-starred restaurant. The brand serves traditional and contemporary dim sum, with an extremely casual service style. Founded in 2009 by Mak Kwai-pui, a former three Michelin-starred chef, the concept started with one outlet and made headlines with the owner’s outspoken views on the Michelin Guide, branding it “elitist” and “out of touch with local tastes”. It has since grown to 35 outlets in ten countries. Trading formats and conditions differ between sites. For example, two venues have been awarded a Michelin star, one operates as a “hole in the wall” and the Singapore site trades 24 hours because of its popularity.
Bar Pacific is a 32-strong chain of neighbourhood bar venues in Hong Kong. Bucking the trend of the other groups I researched and visited, the group moved its attention from the trendy city centre locations of its competitors and operates pubs more likely to be found tucked next to a convenience store or launderette. It gained international attention recently, however, when its initial public offering on Hong Kong’s Growth Enterprise Market soared 1,600% on its debut – the largest opening day by a pub or restaurant group anywhere in the world. The HK$45.2m (£4.7m) funds raised will be invested in upgrading and expanding the estate.
Maximal Concepts is one of the most highly-awarded multi-brand operators, with 18 restaurants in the city. The five-year-old business was founded and led by three partners, Malcolm Wood, Quan Mu and Matt Reid. The first concept to be rolled out internationally is Mott 32, named after the first Chinese convenience store in New York City, offering “tweaked” traditional Cantonese cuisine. It hopes to roll out to Dubai and Bangkok this year and recently opened at the Trump International Vancouver, which caused a flurry of negativity by food bloggers attending the opening following its owner’s latest political gaffe. Perhaps not the best brand partnership in the current political environment but, who knows, it could become a real hot spot for Russians visiting the city?
The final Hong Kong-founded company worth featuring is Aqua Restaurant Group. Launched in 2000 by former lawyer David Yeo, the aim was to import the buzz of the New York and London restaurant scenes to Hong Kong. Since then, the group has developed to incorporate 20 outlets in Hong Kong, Beijing and London. Despite developing its portfolio to include Chinese cuisine, it was not until recently the company forayed into Hong Kong’s local cuisine by launching the Dim Sum Library in Admiralty’s Pacific Place last month, a chic and contemporary concept offering small plates. In London, Hutong at the Shard has received a great many accolades and awards since its launch in 2013. So, while I’m sure the article has inspired you to jet off to Hong Kong, for the time being you can always head to London to enjoy a little taste of China and this restaurateur’s flair.
James Hacon is a development, growth and brand strategist for restaurant and hospitality companies, working as brand strategy director at Thai Leisure Group and a select group of other clients
Great cause for optimism and positivity by Ann Elliott
I do feel very privileged to be on the council of the Association of Licensed Multiple Retailers with some amazing people, all of whom are there working for the good of the industry. Kate Nicholls’ work this week on rates alone resulted in some very hard-hitting headlines that should make the government sit up and listen.
One London operator told me a few days ago the cost liabilities about to hit his business this year would wipe 15% off his Ebitda and the majority of this impact was due to his rates increases. There has been a strong sense of complete powerlessness and despair from both multi-site and independent operators in the face of the rates onslaught increase. Kate and the team have been outstanding, I think, in acting decisively, logically and powerfully to combat this. Whatever the challenge the industry faces, Kate is always there representing the sector to government – and this is one of the biggest challenges facing us this year. Her determination gives me great cause for optimism.
There was more optimism when the January figures that came out on Thursday from the Peach Coffer Tracker were positive (albeit of course January performance can be very volatile). Restaurant groups were up 3.3% on last January, on a like-for-like basis, while pub group sales were ahead a more modest 1.0% across the board. This is reflective of the operator sentiment I am picking up. I met with Christian Rose from All Star Lanes this week and he (and probably others in the sector) have had a brilliant quarter too. Whilst one swallow doesn’t make a summer (or whatever the expression) better to start the calendar year with a positive performance, than spend the rest of the year trying to recover from a poor one.
Individuals always give me a great sense of joy and positivity. People in this sector are particularly awesome at being optimistic and actually doing stuff to improve the situation rather than sitting round feeling sorry for themselves. One of the most brilliant people I know is Jeremy Roberts and I really admire the work he is doing on the late Tim Bacon’s charity. I met Jonathan Arana-Morton, founder of The Breakfast Club, earlier this week and was blown away by the story of the brand’s beginnings and growth. Having queued for an hour-and-a-quarter last Sunday to get into Southwark Breakfast Club for breakfast, I know exactly what the appeal is and why it’s worth it. James Horler (Ego), Scott Munro (Red’s True Barbecue), Marc Francis-Baum (Barworks), Scott Matthews (CG Restaurants), Lucinda Woods (The Restaurant Group), Cassandra Stavrou (Proper Corn), Allister Richards (Gather & Gather) and Neil Macgeorge (Punch) have all inspired me in the past few weeks – bright, engaging leaders with fantastic ideas and huge determination. I have learnt something from each of them.
I have also seen some outstanding places that have given me great hope for this year including Corazon in Soho, Franco Manca (good, but not as good as Pizza Union), Singer near Finsbury Square, The Tokenhouse in Moorgate, and The Lighterman in Granary Square. I haven’t had any bad meals or experienced poor service anywhere in the past few weeks. Food quality has been high too and value for money (not low price) has been obvious. There are some fantastic new independents in operation led by outstanding entrepreneurs that I hope are not squeezed out by rate rises and high input costs in the months ahead. They have great cause for optimism – it’s there if they look for it.