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Mon 15th Jan 2018 - Propel Monday News Briefing

Story of the Day:

BrewDog nears £11m mark in latest crowdfunding campaign but reduces ‘stretch target’ to £20m: Scottish brewer and retailer BrewDog has raised nearly £11m in its fifth round of its Equity for Punks crowdfunding initiative – but has reduced its “stretch target” to £20m. The company has so far secured £10,889,565 from 23,274 investors but the amount raised at this point is far short of its original “stretch goal” of £50m. The campaign, which has a target of £10m, is due to close at 11am on Monday (15 January). With 2.8% equity in the business being made available at £23.75 per share, it means BrewDog values its business at nearly £2bn. It also means BrewDog has now raised more than £50m from crowdfunding since its first Equity for Punks share plan was launched in 2009. More than 69,000 people have invested in the business. In announcing Equity for Punks V, the company said it would use the funds to expand the brewery at its headquarters, and would progress with plans to build breweries in Asia and Australia. Of the £10m initial target, £5m will be used for a new Ellon brewhouse, £3m for its Overworks project and £2m on infrastructure. In April 2017, BrewDog sold a 23% equity stake to San Francisco-based TSG Consumer Partners for £213m. In its latest accounts for the year to 31 December 2016, BrewDog posted a £3.7m pre-tax profit on record sales of £72m.

Industry News:

Propel Multi Club Conference opens for bookings, Numis to present: The first Propel Multi Club Conference of 2018 is open for bookings. The full-day event takes place on Wednesday, 7 March at the Grange Hotel in St Paul’s, London. Tim Barrett, travel and leisure analyst at Numis, will examine the unprecedented current cost environment in the foodservice sector and the potential winners and losers. Multi-site operators of pubs, restaurants and foodservice outlets can book up to two free places by emailing Anne Steele at

Supply Chain Masterclass open for bookings: Supply Chain Masterclass, which will look at how to achieve best-in-class supply chain efficiency, is open for bookings. The one-day event, launched by Propel in partnership with Food Partners founder and managing director Campbell Askwith, will take place in the Fifth Floor State Rooms at 30 Euston Square, London, on Wednesday, 21 February. The event will pose the question: “Who should be responsible for a restaurant, pub or hotel group’s purchasing strategy?” Speakers will include Leon French, category procurement director at Brakes, who will look at the real impact of Brexit and other material factors that have influenced inflation during the past 18 months and provide a view into the future. Former Intertain chief operating officer and now sector non-executive director Simon Kaye will discuss the opportunities to speedily challenge practice and deliver projects and value by thinking laterally. Jeremy Ward, previously chief information officer for Kempinski Hotels and chief operating officer of Iris and now a cloud strategist with Cloudreach, will discuss the current trends in mobile technology and what you should be preparing for when looking to implement solutions and systems for your customers. Tickets are £295 for Propel premium members and £345 for others. To book, email Anne Steele on or call 01444 817691.
CAMRA launches The Good Beer Guide app: The Campaign for Real Ale (CAMRA) has launched a new app. The Good Beer Guide app collates data from more than 40,000 pubs so users can search for local pubs based on their individual preferences. Filters include everything from having a fireplace or free Wi-Fi to being dog-friendly or selling real cider on tap. App users can also connect with friends using a social feed that lets them share pictures and comments on the pubs they visit and the beers they try, and keep them up to date with the latest beer and pub news from CAMRA. Users can also upgrade their subscription to access even more features and enhanced search tools, including the premium listing of 4,500 CAMRA-recommended pubs from the Good Beer Guide. CAMRA head of publishing Simon Hall said: “The Good Beer Guide is already a hugely respected source of beer and pub information. The app is the next step, opening up the world of great beer and pubs to even more people and providing a new way for them to share their passion with others through pictures, tasting notes and reviews. It allows people to take the pub with them wherever they go.”

Company News:

Charles Wells to open 14th French pub next month: Charles Wells is to open its 14th pub in France next month. The latest opening will be the Queen Victoria in Lille (population: 228,000), the company’s first pub in the city. Charles Wells is also understood to be in negotiations to open a site in the French seaside city of La Rochelle (population: 80,000). The French expansion is part of Charles Wells’ development of its pub estate in the wake of the sale of its Bedford brewery to Marston’s last year. The company told Propel its French portfolio of pubs were €147,000 up on budget in December, while its four-strong Pizza, Pots and Pints managed estate beat budget by £86,000. The company plans to invest £2.5m in its 186-strong tenanted division in the current year. It will also open its fourth Apostrophe premium pub next month, The Bull In Olney. The company is also expected to unveil plans for a new micro-brewery in Bedford in the coming weeks.
Chef director Yogesh Datta to convert Chelsea restaurant into new sustainability concept: Indian chef Yogesh Datta is putting sustainability at the heart of a new concept he is launching at the former site of The Painted Heron restaurant in Chelsea, south west London. Datta, who is chef director of Tricolour UK, which operates The Painted Heron, will soft launch the new concept, TPH of Chelsea, on Tuesday (16 January) with a focus on plant-based dishes and responsibly sourced and sustainable ingredients. TPH of Chelsea will draw inspiration from the Indian sub-continent but with all dairy products removed from the cooking process. Vegan dishes will include jackfruit biryani and spicy aubergine curry. Meat dishes will use free-range, grass-fed animals, while seafood will come from ethically run farms. The constantly evolving menu will also feature Josper charcoal oven-grilled dishes such as chicken tikka with charcoal dust. TPH of Chelsea will feature a heated outdoor terrace, with views of the Thames. Datta said he recognised a need for an Indian restaurant that could cater to a more health-conscious clientele. He said: “I’m thrilled to be adjusting our brand for 2018. TPH of Chelsea will encompass the same level of quality we’ve become known for with a greater lean towards sustainability, ethical cooking and an unforgettable dining experience that people of all dietary persuasions can enjoy in a central setting.”

Up to 12 Jamie’s Italian UK closures on the cards as company explores further restructure: Up to 12 Jamie’s Italian sites in the UK could shut after the chef’s restaurant company confirmed it was considering a further restructuring. The closures would be on top of the six Jamie’s Italian closures announced a year ago. Those closures reduced the chain from 42 sites to 36 and another has shut since. This resulted in the company reporting a pre-tax loss of £9.9m compared with a profit of £2.4m the previous year after a one-off hit of £10.9m from the closures. Branches at risk from closure this time around include St Albans, Milton Keynes, Glasgow, Bristol and Cardiff, reports The Sun. The restaurant company was founded by Oliver and Gennaro Contaldo in Oxford in 2008. It grew rapidly into a chain of more than 60 restaurants worldwide and had plans to expand further, but recently it has begun to struggle and AlixPartners was hired in November to draw up a turnaround plan. A Jamie Oliver Restaurant Group spokesman said: “The company can confirm it is exploring plans to restructure its Jamie’s Italian restaurant estate in the UK, to ensure the business is in good shape for the future. As part of this review, we are in conversation with our stakeholders, but no final decisions or proposals have been made at this stage.” He emphasised the review would have no impact on the chain’s 33 international restaurants, while the Jamie Oliver Media Group and the Jamie Oliver Licensing Group, both of which are managed and run separately, were also unaffected. Last week, better burger brand Byron raised the prospect of closing at least 15 of its 67 outlets after announcing plans for a CVA and a financial restructuring. Documents showed a loss of £10.3m last year, as like-for-like sales fell by an average of 5.9%.

Freehold of Leicester building let to McDonald’s to be auctioned with guide price of £2m: The freehold of a building in Leicester let to McDonald’s is to be auctioned by Allsop with a guide price of £2m. McDonald’s holds the lease for the property in Market Street that expires in 2036 with no breaks, paying £109,000 rent annually, suggesting a 5.45% gross initial yield for the buyer. McDonald’s recently signed a ten-year reversionary lease. A rent review from 2016 is outstanding and the current rent is reserved. The auction will take place on Tuesday, 6 February at The Berkeley in Knightsbridge, London. 
Disco Bars Group reveals more details of Leek launch for fourth Society site: Midlands-based Disco Bars Group, led by Peter Terry, has revealed more details of its plans for the former Engine Room pub in Leek town centre, which it will transform it into a fourth site for its Society Bar brand. The company, which operates Society Bars in Newcastle-under-Lyme, Burton-upon-Trent and Uttoxeter, will invest £200,000 to turn the empty pub into a “quality late-night destination”. Terry told The Sentinel: “We believe Leek deserves a quality late-night destination. We want to invest £150,000 to £200,000 in the premises. We have put a lot of effort into considering local residents and being a positive asset to the community. The new Society Bar would be a three-room venue with a bar at the front and two venues at the back, so there would be three different styles of music available. The bar would be very similar to Uttoxeter and Newcastle, offering genuinely high-quality cocktails of the standard you would find in the big cities.” Disco Bars Group has submitted a licensing application to Staffordshire Moorlands District Council for permission to sell alcohol and play music until 2am, Sunday to Wednesday, and until 3am Thursday to Saturday, with closing time half-an-hour later. The opening will take Disco Bars Group to ten sites following its latest opening – craft ale, gin and whiskey bar Ebenezers in Nantwich, Cheshire.

Fortnum & Mason reports December like-for-like sales up 13%: Fortnum & Mason has reported like-for-like sales increased 13% for the five weeks to 31 December 2017. The company said 77% of all sales at its Piccadilly store were driven by UK shoppers while online sales were up 23% compared with last year. Chief executive Ewan Venters told The Telegraph: “We take great pride in the fact at a time when the high street is under pressure, our stores, restaurants, bars and quality products are being enjoyed by our domestic customers more than ever.” Since Venters joined the business in 2012, he has driven a strategy to ensure the brand isn’t just a tourist attraction, resulting in the average number of domestic customers rising to 60%, compared with 30% before his arrival. 

Hammersmith home of River Cafe sells for £40m: Billionaire property moguls Ian and Richard Livingstone have boosted their coffers by £40m by selling a chunk of property in Hammersmith, west London, which includes Ruth Rogers’ River Cafe. RPMI Railpen, the British investment manager for the Railways Pension Scheme, is buying Thames Wharf Studios. The 46,706 square foot space on the River Thames, which comprises offices and homes, has been sold by the brothers’ London & Regional business. A deal at close to the £40m asking price is understood to have been agreed, reports the Evening Standard. Part of the plot is used by the River Cafe, whose protégés include Jamie Oliver and Hugh Fearnley-Whittingstall. RPMI Railpen said there was scope for further development, “adding to its long-term value and helping us to meet our mission to pay members’ pensions securely, affordably and sustainably”. Agents Allsop and Nightingale Partners advised on the deal.

Vapiano targets further Scottish expansion as it prepares to open Glasgow site this month: Vapiano will open a site in Glasgow this month – its second restaurant in Scotland – and is targeting more sites in the country. The company will open the 11,000 square foot venue in Buchanan Street on Monday, 29 January on the site of the former George Hotel having previously taken a 25-year lease. The opening comes after Vapiano made its Scottish debut in Edinburgh in November. Asked by Scotland on Sunday whether Vapiano was looking to open up anywhere else in the country, managing director Phil Sermon said the focus would likely remain on Edinburgh and Glasgow “which we think are perfect cities for us” given the large scale of the group’s restaurants. “The next opportunities may be for second sites in either city,” he added. Sermon said he was unconcerned about UK consumers cutting back on discretionary spend, believing Vapiano’s offering at “very affordable” prices meant “guests would come out for that”. He added competition “was always strong in any market, but we believe that what we do is just a little bit different”. The first Vapiano restaurant opened in Hamburg, Germany, in 2002. Since then, the business has developed a portfolio of 186 venues in 31 countries on five continents. It currently operates six restaurants in the UK.

Hygiene report reveals Soho House Group forced to close Chicken Shop site in Kentish Town: Soho House Group was forced to close its Chicken Shop site in Kentish Town by food safety officers last summer after mice droppings were found on chopping boards in its kitchen, it has been revealed. Inspectors discovered a “widespread” rodent infestation while mice droppings were also found on the kitchen floor and in shelves stacked with takeaway boxes in the restaurant. Inspectors gave the venue, in Highgate Road, a hygiene rating of zero, saying the filthy condition posed an “imminent risk to health”. The restaurant’s owners signed a voluntary closure agreement following the inspection in July last year, details of which have just emerged. Camden Council’s food hygiene report on the restaurant showed evidence of flies was also present when officers carried out their inspection. The Chicken Shop is part of the Soho House Group, operating under its restaurant arm Quentin Restaurants. It has branches across the capital. A Quentin spokeswoman told the Evening Standard: “For two days last summer, there were issues noted in the basement and we voluntarily closed. Inspectors returned and were satisfied that everything had been addressed, and we reopened that week. We look forward to our next inspection in the near future.”

Noble Inns closes Smokehouse site in Chiswick as it consolidates business interests: London gastro-pub operator Noble Inns has closed its Smokehouse site in Chiswick, west London, after deciding to consolidate its business interests. The restaurant in Sutton Lane North has shut after three years with management wanting to focus on its Islington and Shoreditch pubs, reports The site, which had been marketed through agent Savills, has now reopened as gastro-pub The Queen’s Head. The pub was originally known by that name in former years. It serves a food menu including steaks and grilled meats as well as bar snacks.

Michelin-starred chef hits crowdfunding target to open second Ilfracombe restaurant: Michelin-starred chef Thomas Carr has hit his target on crowdfunding platform Kickstarter to open a new restaurant in Ilfracombe, north Devon. The new restaurant, named Thomas Carr Seafood & Grill, will join his join fine dining venue Thomas Carr at the Olive Room in the town. Thomas Carr Seafood & Grill will open on Thursday, 15 March in the former Lamb Hotel building in High Street. A target of £15,000 was set and reached, with funds raised now at £17,990. The campaign ends on Saturday, 27 January. Carr said: “We don’t want to stop here, the reality of a new venture like this is it needs a fair amount to get everything up and running. We’re now all set to open, but to do things the way we’d really like to do them, we want to keep that total rising.” Carr gained Ilfracombe’s first Michelin star for Thomas Carr at the Olive Room in 2016 and has retained it since. 

The Works set to open third site, in Chelmsford: Husband-and-wife team Roger and Elaine Bolton are set to open the third site for their fast-casual urban style restaurant The Works, this time in Chelmsford. The Boltons have applied to the city council for a premises licence to open the venue in the redeveloped Next building in Springfield Road. The Works serves a “quality menu with artisan ice creams” that customers can see made right in front of them and snacks such as crepes, waffles, hot desserts, milkshakes, smoothies, coffees, teas, cocktails, beer and a range of sparkling, red and white wines. The Works currently has opened two restaurants – in Aylesbury and High Wycombe – since launching in 2014, with plans to expand again after its venue opens in Chelmsford. The Boltons’ son Sam told Essex Live: “We were looking for a town a bit bigger than Aylesbury and Wycombe for our third one and Chelmsford was the first place that came up with the right property and right deal.”

Goodbody – M&B first quarter satisfactory overall but better opportunities elsewhere in sector: Goodbody leisure analyst Brian Devitt has said Mitchells & Butlers’ (M&B) first-quarter trading was satisfactory overall but he continues to see better opportunities elsewhere in the sector. Issuing a ‘Hold’ note on the shares, Devitt said: “Adjusted like-for-like sales grew 2.2% for the 14 weeks to 6 January, a slowdown on circa 3% reported at the FY17 results for the first seven weeks of the period and compares with our +2.5% FY18 forecast. In the past seven weeks, like-for-likes were +1.6%, impacted by adverse weather in early December, offset by strong Christmas trading with like-for-likes +3.9% over the three-week festive period. Christmas Day was a record-taking day, with like-for-like sales growth of 5.4% with 225,000 meals sold. During the period the group opened two new sites and completed 114 conversions and remodels. It expects to complete circa 270 remodels and conversions in the full year. Chief executive Phil Urban has commented on the performance noting ‘we are pleased to have delivered continued strong trading results over the important festive period in the face of difficult weather for many of our guests, indicating the attractiveness of our offers in a competitive market’. Overall, trading for M&B appears ok. We believe the poor weather in early December could have impacted quarterly like-for-likes by circa 50 basis points, which is not insignificant. However, given the strong December trading reported by many private operators in the sector some may be slightly disappointed in the overall trend. In terms of our view, at current levels we believe the stock is close to fair value given UK consumer risks and we continue to see better opportunities elsewhere in the sector.”
Brothers open film-themed restaurant in Barnstaple with escape rooms: Brothers Jason and Luke Matthews have opened a film-themed restaurant in Barnstaple featuring north Devon’s first escape rooms. They have launched Escape Down The Rabbit Hole in Market Street. There are nods to television and film all over the restaurant including on the menu, where diners can get a Stranger Things waffle extravaganza or a classic cheeseburger from Pulp Fiction. It also harnesses story-telling with its two escape rooms, where teams complete a series of puzzles and challenges to complete a quest. Teams taking on the rooms can try the Battle for Valandor, which includes mixing potions and reciting incantations, or Fix The Reactor, with riddles and clues left by a mysterious scientist. Luke Matthews told the North Devon Gazette: “We are predominantly a restaurant so we thought ‘why not create this fun place that’s outside the box?’ Everything has got meaning behind it. We had this lovely space and felt escape rooms go so well with the concept of creativity and imagination – you can transfer yourself into the story.”

Italy-based operator fails in £350,000 crowdfunding bid as it looks to enter UK market: Italy-based operator Miccone, which specialises in the bread it is named after, has failed in its bid to raise £350,000 on crowdfunding platform Crowdcube as it looks to launch in the UK. Founder Giuseppe Dabbene has been testing the concept in London by operating a food truck that sells savoury and sweet miccone. He was raising funds to open a permanent site in the capital and was offering a 30.43% equity stake in return for the investment. However, Crowdcube stated: “Unfortunately Miccone did not reach its funding target before the closing date.” The pitch stated: “In 2014 we opened our first store in Pavia in Italy (€680,000 revenue in three years, €58,840 Ebitda). We feel this is the right time to expand into the UK market, where 22% of British adults choose Italian food for eating out. London has been important to us for testing Miccone thanks to the great success and audience response we had with our food truck. Now our mission is to open our first site in London to make this niche Italian traditional food known to an international audience. Our savoury miccone is stuffed with cold cuts and cheese or other international ingredients. All this is matched by wine and craft beer. The sweet version is combined with jam and honey. From leftover miccone bread we create our bread cake. All of this is matched by high-quality coffee, which we roast in-store.”
Cambridge-based Indian restaurant operators open second site: Cambridge-based Indian restaurant operators Krishna Vijayakumar and Arun Chandran have opened a second site in the city. The cousins, who own the Navadhanya restaurant in Newmarket Road, have launched Tiffin Truck in Regent Street. The 100-cover venue also features a private dining area. The menu includes dishes such as bun tikki burger, Madras fish curry and paneer butter masala. Vijayakumar told the Cambridge News: “We were inspired to bring a tiffin-style lunch to Cambridge after many of our diners at Navadhanya asked if we could deliver food. We thought we could brighten office lunchtimes with our new concept and offer a more casual style of eating at the Tiffin Truck restaurant.” Navadhanya has been open for three years and is listed in the Michelin Guide 2018.

Plymouth-based operator takes on Ei Group pub for second site: Plymouth-based pub operator Frank Kelly has taken on his second site in the city. Kelly, who runs The Pub On The Hoe, is now operating the Two Trees pub in Union Street, which is owned by Ei Group. He plans to make the venue, which closed in November, into a “friendly community pub for everyone”. The pub will start serving food shortly as the kitchen prepares to reopen, while it also offers a range of local ales, reports the Plymouth Herald.

Chinese firm set to open first site in Beijing for British pub concept chain inspired by Buckinghamshire venue: The first site in a chain inspired by a Buckinghamshire pub is set to open in Beijing in March. The Plough at Cadsden, near Princes Risborough, was sold to Chinese firm SinoFortone, which hopes to transform it into an international pub chain, for an undisclosed amount in December 2016. The pub shot to fame in China after president Xi Jinping ate fish and chips and drank a pint of Greene King IPA with former prime minister David Cameron during a state visit to the UK in 2015. A year later, SinoFortone bought the pub with plans to open 50 similar venues across the Far East. Managing director Peter Zhang told the BBC: “We believe we have the best location in central Beijing and the British pub concept will work well in China.”
JD Wetherspoon submits plans for £1.8m expansion of South Shields pub: JD Wetherspoon has submitted plans for a £1.8m expansion of The Wouldhave pub in South Shields, Tyneside. The company wants to demolish former nightclub and music venue The Ranch House next door to create a dining terrace. Wetherspoon spokesman Eddie Gershon said the expansion would create ten jobs. He told The Shields Gazette: “The Wouldhave is an extremely popular pub in South Shields. We are always keen to give our customers the best pub possible and believe our plans to extend and develop the pub will do this. We aim to spend £1.8m on the project, which highlights our commitment to the pub and South Shields itself.” Last week, Wetherspoon closed The Thomas Ingoldsby in Canterbury, Kent, to start work on the addition of a 13-bedroom hotel as part of a £1.5m investment. The pub will be closed for almost five months.
Marston’s gets go-ahead to extend national distribution centre in Mansfield: Marston’s has had plans to extend its national distribution centre in Mansfield, Nottinghamshire, approved. The company will now add 19,762 square feet to the Lower Oakham Way building, which already offers 65,982 square feet of internal space, Insider Media reports. Marston’s has been operating from the site at Oakham Business Park since 1995. A document submitted to Mansfield District Council on behalf of the applicant stated: “The proposed design in terms of the layout respects the form of the surrounding area. The layout of the development of the site will not change the basic overall planned form of the area.” The company said the move would allow it to take on additional warehouse staff.
Nottingham-based micro-brewer to open second micro-pub next month: Nottingham-based micro-brewer Totally Brewed will open its second micro-pub next month. The company, run by head brewer and managing director Rob Witt, will launch The Overdraught in Canning Circus in the city. The venue, whose name is a cheeky nod to the building’s former use as a bank, will open on Friday, 2 February. The new bar, which will be considerably larger than the company’s debut micro-pub and bottle shop Totally Tapped in Beeston, will offer seven cask lines and 14 keg craft beer lines. The bar will offer a range of beers, including Totally Brewed’s own ales. Local cider and a variety of wine and spirits will also be on offer alongside more than 100 bottles and cans available for take out, reports the Nottingham Post.
York-based craft brewer looks to triple production and launch street-food space: Brew York has submitted a planning application to York City Council to expand its craft brewery and taproom in Walmgate to triple production and launch a street kitchen. Founders Wayne Smith and Lee Grabham launched the venture in April 2016 and want to expand into a former boxing club next door. Food operator Street Cleaver would be a permanent vendor alongside a changing roster of pop-ups. The expanded Brew York would also host beer festivals and offer events space. The brewery currently produces 13,400 pints of beer a week. Grabham told The Press: “We’re excited by our plans to increase the amount we brew each week three-fold. We’d be able to brew more than ten times the weekly amount we were brewing when we launched in 2016.” Smith added: “We also hope to export into Europe and even further afield.”

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