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Tue 11th Dec 2018 - Update: TGI Friday’s and Hotel Chocolat
Electra – we believe TGI Fridays can provide a strong exit: Electra Private Equity, which is winding down its portfolio, has told shareholders it believes it can achieve a good price for its TGI Friday’s business in due course. The company said difficult conditions in UK casual dining impacted TGI Friday’s (£124.6m), which was also ‘impacted by exceptional weather conditions in 2018 as well as underlying markets’. It added: “Recovery plans are in place intended to increase resilience and value prior to exit in an acceptable timeframe.” Chairman Neil Johnson said: “Given the well documented challenges in both the UK retail and casual dining sectors, it was not appropriate to sell (our) two remaining larger assets TGI Friday’s and Hotter Shoes at this time. These assets represent nearly 90% of the remaining portfolio, after disposals already announced, and are fully controlled. Despite the impact of short-term trading conditions on current valuation, the board is confident that both assets offer good opportunity for growth and can provide strong exits in an acceptable timeframe.” The company added: “In the year to 30th September 2018, the performance and valuation of both TGI Friday’s and Hotter Shoes have been impacted by trading conditions affecting the wider UK consumer, retail and casual dining sectors. This was compounded by extreme weather that impacted TGI over the specific periods involved and had a more profound effect on Hotter in disrupting the launch of the spring/summer season with a resultant impact on the promotional calendar of Hotter and its competitors, leading to lower margin sales throughout the summer. We are working with their management to increase the resilience of both businesses and to achieve profitable growth. A key aim has been to move to full control of both businesses in order to allow focused implementation of their strategies without the constraint imposed by high gearing. In the case of TGI, we had reduced gearing in 2017 in anticipation of challenging trading conditions to come and completed the buyout of a minority shareholder for £6m in early 2018. In the case of Hotter, in 2018 we went ahead with the investment necessary for the achievement of medium-term optimisation despite shorter term pressures that would impact short-term valuation. This investment comprised the buy-out of a significant minority shareholder (£19m) in early 2018 that was necessary to facilitate implementation of our strategy for the business and a reduction in gearing (£14m) to allow focus on value creation. The short-term valuation of both businesses has been impacted by trading and the valuations of comparator companies. However, we remain confident in the opportunity for medium term value creation in each.” 

Hotel Chocolat opens debut New York store: Hotel Chocolat has opened its New York store at 441 Lexington Avenue. Angus Thirlwell, co-founder and chief executive of Hotel Chocolat, said: “As we evolve into international markets, our core “More Cocoa, Less Sweet” mantra gains traction across the globe. In Tokyo our hot chocolate and sculpted chocolate batons were an instant sell-out, whereas New Yorkers went wild for our peanut pralines when we opened here yesterday. This is a hugely exciting time to be at the helm of Hotel Chocolat, as the brand continues to grow and prove popular with locals in overseas markets, making more people happy through the power of chocolate.”

Propel launches Leadership Summit, open for bookings: Propel is launching the Leadership Summit, which will see a select group of the sector’s most experienced bosses share their expertise on leadership. The full-day event, in partnership with Elliotts, will take place on Tuesday, 12 February at One Moorgate Place and is open for bookings. Speakers will include Will Stratton-Morris, chief executive of Caffe Nero, who will talk about building high-performance teams. Alasdair Murdoch, chief executive of Burger King, speaks about the role of leadership in business turnarounds. Elliotts chief executive Ann Elliott will talk to Des Gunewardena, chief executive of D&D London, about the lessons of leadership he has picked up in his career in the sector. Duncan Garrood, chief executive of Ten Entertainment, will give his views on leadership and the customer experience, while Jo Fleet, managing director of Flat Iron, will talk about empowering people and trust and getting the team to “buy in” through clear communication and vision. Mark Jones, chief executive of Carluccio’s, will explain how the company is building the quality and skillsets of its general managers to lead the business out of decline. Simon Townsend, chief executive of Ei Group, will give his views on the challenges of leadership during a period of immense change and Zoe Bowley, managing director of PizzaExpress, will give her top ten tips on leadership. Meanwhile, Loungers founder Alex Reilley will talk about the adaptations involved in growing a business from one site to more than 100, celebrating success and the art of succession, while Ann Elliott will give her views on the power of mentoring to grow talent in organisations. Propel managing director Paul Charity said: “With the industry facing such challenging times, effective leadership has never been more important. This is an unmissable opportunity to learn from high-profile leaders in our sector.” Prices are £295 plus VAT for Premium members, £345 plus VAT for operators and £445 plus VAT for suppliers. To book, email anne.steele@propelinfo.com

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