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Wed 4th Sep 2019 - Propel Wednesday News Briefing

Story of the Day:

Authentic Alehouses’ secured creditor agrees £3m deal to buy sites out of administration: Crowdstacker, the secured creditor of Authentic Alehouses, has agreed a deal to buy the seven-strong estate of pubs out of administration for £3m, Propel has learned. Four of the pubs are currently trading while in administration – The Albert Hotel in Hull, the Countess of Rosse in Shipley, The Fountain Inn in Barnoldswick and The Ponty Tavern in Pontefract. The remaining three sites – the Crown Inn in Addingham, The Red Lion in Driffield and The Wakey Tavern in Wakefield – are closed because of insufficient funds to carry out the required refurbishments in order for the sites to begin trading. Propel understands Crowdstacker plans to operate all the pubs with long-term supply agreements in place while looking to find buyers. It is thought Crowdstacker is assessing the cost of refurbishing the three shuttered sites before placing them on the market in a bid to increase their market value. The four pubs that are open are believed to be trading well but operating costs are high because it is not possible to sign long-term supply contracts due to the pubs being in administration. The £3m deal will involve the purchase of all seven pubs and consist of £170,000 in cash to cover administration costs and the novation of £2.83m of loans (RICS values minus the cost of administration). Initially, £100,000 will be paid and six pubs with the associated loan amount will be novated. One of the closed pubs will remain in administration until the balance of £70,000 is paid to the administrators, which is due within six months. Allan Harper-led Authentic Alehouses entered administration in March despite raising £6.4m in peer-to-peer loans via Crowdstacker. Simon Bonney and Michael Kiely, of Quantuma, were appointed joint administrators. Authentic Alehouses launched in July 2017 with a £5m crowdfunding campaign on Crowdstacker that was later doubled. Harper also led Burning Night Group, which went into administration in October after raising £7.5m on the same platform. In December, Burning Night Group was bought out of administration by a special purpose vehicle created by turnaround specialist Access Commercial Finance, which was a secured creditor of Burning Night Group.

Industry News:

Propel Multi Club Conference opens for bookings, Alan Yau talks to Paul Charity, two free places for operators: The final Propel Multi Club Conference of 2019 is now open for bookings. The full-day event takes place on Thursday, 14 November at the Millennium Gloucester hotel in London. Propel managing director Paul Charity will talk to Wagamama and Hakkasan founder Alan Yau about his career in restaurants, current and future trends and gaps in the market. Multi-site operators of pubs, restaurants and foodservice outlets can book up to two free places by emailing Anne Steele at

Sector like-for-likes see 6.1% uplift in August: Sector like-for-like sales saw a 6.1% uplift in August, according to S4Labour, the online labour-scheduling management system from Catton Hospitality. According to analysis of more than 100 organisations that use S4Labour software, sales of food and drink again saw an increase on the back of a 5.4% rise in like-for-like sales in July. August's figures can be characterised by a boost in performance for drink-focused business, where the overall rise in sales was 9.6% ¬– made up of 11.1% growth in drinks sales and supported by a 3.5% rise in food sales. Drink sales were also the driving force behind further positive sales figures in food-focused businesses. A boost of 5.1% in drink and 1.2% increase in food sales meant food-led pubs delivered a 2.8% increase in like-for-like sales compared with August 2018. S4Labour said August’s results were particularly encouraging for drink-focused pubs, where like-for-like sales have slightly lagged behind the results posted in food-focused pubs during 2019. 

Pubs and restaurants buck trend as consumer spending remains subdued: UK pubs and restaurants bucked the trend as consumer spending remained subdued during August, according to new data from Barclaycard. Restaurants saw a 10.9% uplift while pubs saw growth of 8.6% against last year. Non-essential spending was up 1.4% year-on-year as overall consumer spending grew 1.3% – representing a decline in real terms when accounting for inflation – following similarly muted figures in May, June and July. Essential spending saw muted growth of 0.6%, with petrol contracting 1.9%. Travel saw modest growth of 0.6%, with travel agents up 1.0%, whereas airlines and hotels contracted by 0.4% and 0.2% respectively. Discount stores saw spending rise 8.0% as shoppers looked to make their money go further, with more than half worrying about the impact of rising prices. Economic uncertainty continues and the effect of the weak pound weighed heavily on consumers’ minds in August. Only 31% of UK adults suggested they are confident in the UK economy while more than half (52%) are worried about the impact of rising prices over the next month. Barclaycard said this was reflected by a fall in consumer confidence, with just 29% of UK adults feeling positive about the state of the UK economy. In addition, a quarter (23%) said they are uncertain about their job security – the highest this figure has been in more than two years. This has led to 54% of Brits now being confident in their ability to spend on non-essential items – a 6% drop from last month. Barclaycard director Esme Harwood said: “August’s figures signal the end of a fairly subdued summer for consumer spending – showing a marked contrast to the previous August. A weak pound and worries about rising prices are causing concern for many, with Brits looking to better balance their household budgets. That said, spending at pubs and restaurants remains robust, suggesting Brits have been making the most of the longer days by relaxing and dining out.”

Top-ten Just Eat shareholder to vote against £9bn merger: Just Eat’s proposed merger with has been dealt a setback after top-ten shareholder Eminence Capital revealed it plans to vote against the deal. The US asset manager, which holds a 4.4% stake in Just Eat, is set to oppose the £9bn deal with Amsterdam-based rival Ricky Sandler, chief executive and chief investment officer of Eminence, said: “The proposed financial terms are far too favourable to shareholders and far too unfavourable to Just Eat shareholders. Accordingly, we intend to vote against this arrangement.”’s offer gave Just Eat’s shares a premium of 15% to its closing price before news of the tie-up first emerged. Yet there is speculation investors are waiting for a higher bid than the current one, with the group’s share price consistently trading above the 731p implied value from the deal that was announced in late July. Just Eat entered talks with to create a global food delivery group in the wake of pressures to protect its market share against the rise of UberEats and Deliveroo. In recent months, Just Eat has been facing investor pressure – particularly from activist investor Cat Rock Capital – to embark on a tie-up to fend off such market competition. Responding to Eminence's announcement, Alex Captain, managing partner of Cat Rock Capital, said: “Voting against the Just Eat and merger benefits no one but Just Eat’s competitors. We think it is clear Just Eat shareholders should vote for this merger unless a more compelling and credible counter-offer emerges.” The proposed new group, which would be called Just Eat, would be a market leader in Britain, Germany and Canada.

Fred Sirieix granted settled status after Home Office ‘mistake’: Fred Sirieix, general manager of Galvin at Windows and presented of BBC show My Million Pound Menu, has been granted settled status after a “mistake” in his application. Sirieix was born in France and brought up in Limoges, before he moved to London 27 years ago to work at fine dining restaurants including La Tante Claire and Le Gavroche. However, despite living in Britain for nearly three decades, Sirieix was stunned when he was denied settled status by the Home Office. On Monday night (2 September), he tweeted: “Tonight I’m joining le club du unsettled status. Never thought it would happen. Apparently you need proof I have been in the UK for past five years. Is this a joke? I have lived here for 27 years continuously. I supplied all you asked for including my NI number. Surely you can work it out, can’t you?” But now Sirieix has received an apology from the Home Office and was told he had been granted settled status. He said: “As small as this may seem to some the whole thing was deeply upsetting and unsettling. After all these years in the UK it is so wrong to make people feel like second-class citizens.” The Home Office said in response: “We have contacted Mr Sirieix about his application and he has now been granted settled status. Nobody has been granted pre-settled status without first being offered the opportunity to submit evidence that they qualify for settled status. EU citizens are our friends, family and neighbours and we want them to stay.” 

Londoners shifting away from burgers and pizzas to fried chicken at lunchtimes: Londoners are shifting away from burgers and pizzas to fried chicken when it comes to ordering at lunchtime, according to findings by Nez, the London-based food and drinks offer app. The data, based on redemptions on the app over the summer, also showed people in the capital are choosing to visit independent restaurants, bars and cafes this year rather than chains. More than a quarter of orders through the app at lunchtimes were for chicken dishes – with Co & Ko’s K-Pop Chicken the most popular. Other fried chicken operators, such as Slim Chickens and Absurd Bird, have also seen an increase in orders. Another category that Nez had seen growth in was gourmet sandwiches, while K10’s sushi boxes were one of the top performers across the app for products that drive repeat business and ongoing customer loyalty. Nez co-founder and chief executive Joe Zender said: “It’s exciting when we review the latest food-to-go trends and it’s great to see so many partners enjoying strong summer growth. Our investment in Nez’s insights platform means we’re able to provide partners with this kind of data on a daily basis.” Nez was founded in 2016 and is a digital platform that connects operators with a local customer base by delivering hyper-local offers to users’ phones.

Licensing update: Licensing solicitor John Gaunt & Partners produces a useful monthly summary of topical issues and the latest can be accessed here.

Company News:

Douglas Jack downgrades TRG profit before tax forecast by 5%, intention to exit at least half of its 352 leisure sites is ‘right strategy’: Peel Hunt leisure analyst Douglas Jack has downgraded his profit before tax forecast at The Restaurant Group (TRG) by 5% and said its intention to exit at least half of its 352 leisure sites is the “right strategy”. Issuing a ‘Hold’ note on the shares with a target price of 154p following the company's interim results, Jack said: “Like-for-like sales were up 4.0% in the first half (26 weeks) and are up 3.7% after 34 weeks, including 0.2% like-for-like sales growth over the past six weeks. As Wagamama’s like-for-like sales were up 10.6% in the first half (with delivery increasing from 9% to 12% of sales), like-for-like sales elsewhere were up circa 1% overall by our estimates, driven by pubs and concessions. This is similar to TRG's benchmark in the Coffer Peach Business Tracker, helped by this summer’ s relatively poor weather and weaker sporting calendar. We estimate Wagamama’s higher-margin estates added 120 basis points to Ebitda margins, implying the legacy estates margins fell by 110 basis points despite the 1% like-for-like sales growth and it benefiting from 40% of Wagamama’s (albeit minor so far) synergies. This also converts to lower legacy Ebitda, by our estimates. Net debt has increased to £317m, from £306m after the addition of two concessions (five are expected over the full year), three pubs (four are expected over the full year), two Wagamama conversions (eight are expected over the full year) and 16 closures (including ten Frankie & Benny’s). This equates to 2.3 times net debt/Ebitda and five times net debt/Ebitdar annualised by our estimates. We have downgraded our profit before tax forecast by 5%. This reflects £3m of extra wage costs (full year incremental costs are now estimated to be £27m, up from £24m – cost mitigation remains at £10m); and leisure like-for-like sales slipping back against tougher comparables, offset by a £5m reduction in the depreciation charge following the impairment review. This should be a recovery year for TRG, flattered by delivery sales growth, soft comparables and Wagamama’s momentum. However, reflecting the difficult long-term challenges, we believe TRG intends to exit at least half of its 352 leisure sites at the first opportunity. This is the correct strategy in our view, even if it could be expensive and not without risk. The long-term challenge is to maintain momentum at Wagamama, and avoid cannibalisation (and losing money) from delivery.”

Trio of south London operators sign for Elephant Park: Three south London-based operators have signed to open at the new Elephant Park development. Ethiopian restaurant Beza, founded by Beza Ethio, is evolving its existing concept to become a 100 % vegan eatery. It will serve a range of dishes, including the national food “teff injera” – 100% gluten-free sourdough flatbread – alongside coffee sourced from Ethiopia. Tasty Jerk, founded by Rayon and Linda Johnson, will offer classic Caribbean dishes such as jerk chicken, curry goat, and ackee and saltfish. Meanwhile, pan-Asian cuisine operator Pot & Rice will be serving rice pot selections, rice pastry (cheung fun) mochi, yuzu cheesecake, fruit tea, and milk tea. The trio will open in Sayer Street at Elephant Park, the £2.3bn regeneration project being delivered by Lendlease and Southwark Council. Beza and Tasty Jerk were previously tenants at Artworks Elephant, Lendlease's pop-up retail park at Elephant Park. The signings follow the launch of the leasing of the next phase of Elephant Park, which comprises 16 food and beverage units totalling 37,000 square feet clustered in two distinct districts – Ash Avenue and New Kent Road, and Chatteris Quarter. Guy Thomas, head of retail at Lendlease, said: “These three brands – two of whom were part of our Artworks Elephant incubator pop-up and all are locally based – will be great additions to Elephant Park. They are also an ideal complement to our plans for the next phase of Elephant Park, where independent operators will sit alongside well-known London brands.” Earlier this summer, Japanese ramen noodle bar Koi Ramen; and The Tap In, a craft beer concept by the founders of Six Yard Box and Hop Art, agreed deals to open at the development. In addition, sustainable community food market operator Mercato Metropolitano will open MM Factory, 17,500 square feet of retail, dining and social space, later in the year. Nash Bond, CF Commercial and Shelley Sandzer represented Lendlease.

Dodo Pub Co to open debut Berkshire site next month: Oxford-based operator Dodo Pub Company will open its first site in Berkshire next month. The company, founded in 2009 by Leo Johnson and Chris Manners, will launch The Last Crumb in Caversham on Friday, 18 October. Propel revealed last month Dodo Pub Company had taken over the Prince of Wales in Prospect Street for the opening. The walls of the 200-cover restaurant will feature bold, colourful artwork with an open kitchen and a large bar with counter dining. In April, the company reopened The Somerset Arms in Marston Road, Oxford, as The Up in Arms. Earlier this year, Johnson said the company was seeking to open ten to 15 pubs across the Home Counties with rescuing rundown and unloved pubs at the heart of its plans. The company, which is chaired by Patrick Henchoz, who set up the Esporta rackets and gym chain, also operates The Rickety Press and The Rusty Bicycle in Oxford as well as The Bottle Of Sauce in Cheltenham.

Wells & Co to open tenth Pizza Pots and Pints site, in Coventry this month: Bedford-based brewer and retailer Wells & Co is to open its tenth Pizza Pots and Pints site, in Coventry this month. The company is to reopen The Cottage in the suburb of Earlsdon under the brand. The property in Warwick Street is currently being revamped ahead of the opening. A post on the pub's Facebook page stated: “We shall be reopening our doors in September where we will be serving freshly made artisan pizzas, bubbling pots of comfort food, tasty beer and a selection of cocktails.” Earlier this year, The Cottage was granted a licence to open after concerns about noise on what is a quiet residential street were dropped when Wells & Co submitted a “dispersal policy”, reports Coventry Live. Coventry City Council agreed to grant a licence with opening hours of 9am until 11pm from Sunday to Thursday and 9am until midnight on Friday and Saturday. Pizza, Pots & Pints was launched in Cambridge in 2015 and Wells & Co plans to expand the brand to 25 sites in the next two to three years.

26 Grains team confirms Borough opening: 26 Grains, the cafe concept founded by Alex Hely-Hutchinson, has confirmed it is to open a second site in London, in Borough Market. Propel reported in July the business, which opened its first permanent site in 2015 in Neal’s Yard, Seven Dials, has lined up the former Rabot 1745 site in Stoney Street for an all-day offer. Now Hely-Hutchinson has revealed Stoney Street, named after the street it will call its home, will launch in October. The venue will focus on “simple seasonal dishes with a carefully considered, produce and provenance-led cooking style”. The wine list at Stoney Street will be short with a selection of five reds, five whites, one orange and one rosé along with a selection of cocktails. In the evening, bottled wine will be available to take away through a window hatch. Hely-Hutchinson said: “My team and I have had such an amazing journey since starting 26 Grains five years ago and have learned so much along the way. Stoney Street will be a big sister to 26 Grains – slightly more refined, a longer menu, a coming of age.” 26 Grains was started by Hely-Hutchinson to create the West End’s first grains-based cafe. Porridge is the primary focus but also sits alongside muesli, granola, risotto and salads on the menu. Following a successful run of pop-up venues, Seven Dials was the first permanent location for the brand.

Merlin to end six-year spell as public company as shareholders approve £6bn acquisition: Shareholders of Merlin Entertainments have approved the company's £6bn acquisition by private equity firm Blackstone, Canadian pension firm CPPIB and Kirkbi, a company operated by the Danish family that controls Lego and already has a 29.58% stake in the business. A total of 83% of shareholders voted in favour of the deal at the court meeting while 90% approved the special resolution to implement the court-sanctioned scheme of arrangement. The deal values Merlin shares at 455p each, paid in cash, and its equity at £4.77bn for a £5.91bn implied enterprise value. The deal is expected to complete before the end of the year and will end Merlin's six-year spell as a public listed company.

Tap & Tandoor launches new restaurant concept for second site, in Peterborough: Indian gastro-pub operator Tap & Tandoor has launched a new restaurant concept for its second site, in Peterborough. The company has opened the venue at the Queensgate shopping centre, which is owned by Invesco Real Estate and managed by Lendlease. The new 4,329 square foot restaurant located in Cumbergate serves a selection of small plates, mixed grills and home-style curries. The 80-cover venue features a hand-painted beer mural, vintage mirrors and doors from India, alongside a quintessential pub fireplace and stag’s head. Tap & Tandoor Queensgate is the team’s second restaurant concept to launch after Solihull last year. A Tap & Tandoor spokesman said: “Having grown our brand from the concept stage to owning two sites within two major UK cities, we are proud of what we have achieved and we are delighted to have officially opened our latest restaurant concept.” Guy Thomas, head of retail at Lendlease, added: “Tap & Tandoor is the perfect example of an independent brand making waves in the food and beverage market and creating concepts to work specifically with destinations.” CBRE and Time Retail Partners represented Queensgate while Tap & Tandoor dealt direct.

Axe-throwing restaurant to open in York: A new axe-throwing restaurant is to open in York. Alex Cronin and Josh Goodwin have agreed a ten-year lease with developer S Harrison on the recently renovated 3,600 square foot open plan ground-floor space within the 18th century Hunter House building in Goodramgate. The Hilt, which will sell American food with a Nordic twist, will open next month. The restaurant will seat 60 diners, with six axe-throwing bays at the rear. Cronin told Insider Media: “Axe throwing is popular in America and Canada and it's now growing in the UK, with venues in Leeds and Manchester. We wanted to create something unique in York and my successful background running and managing bars and restaurants in the city meant we were able to attract investment. We won't have an alcohol licence.” Hunter House was previously home to department store Hunter and Smallpage. S Harrison completed a refurbishment of the building last year.

Ghost Group launches first site in new wave of London-based casual dining concepts: London-based hospitality operator Ghost Group has launched the first of a number of casual dining concepts. Terra Terra, an all-day restaurant and cafe with open bakery, has launched in Finchley Road, north London. The venue seats 110 diners across its two floors, while at night Terra Terra turns into an intimate cocktail spot offering Italian-inspired dishes, including its in-house pizzette and pasta creations. Ghost Group focuses on developing and operating restaurants, bars, hotels and members’ clubs in the UK, Europe and the US.

Deliveroo now working with more than 25,000 UK restaurants as it adds new partners: Deliveroo has bolstered its restaurant partners and is now working with more than 25,000 restaurants and takeaways across the UK. The company has added Nobu; Wahlburgers; The Halal Guys; and Lewis Hamilton-backed, plant based concept Neat Burgers to its selection of partners. In 2019 alone Deliveroo, which was launched in 2013, has added more than 10,000 UK restaurants and takeaways to its app with notable recent sign-ups also including Denmark-based smoothie and juice chain Joe & The Juice, US chicken brand Wingstop and London-based better pizza brand Homeslice. Justin Lansdberger, commercial global director at Deliveroo, said: “Since our very first order we’ve aimed to work with the very best restaurants and traditional takeaways in the UK.”

Korean-inspired fast casual brand backed by Salt Yard Group co-founder hits £200,000 crowdfunding target: Scotland-based, Korean-inspired fast casual brand CombiniCo, which is backed by Salt Yard Group co-founder Sanja Moll, has hit its £200,000 target on crowdfunding platform Crowdcube. Founded last year by former University of St Andrews students Alex Longson and Juno Lee, CombiniCo operates two sites – one of which is a concession – in the Scottish town. Now it is looking to raise funds to open a flagship site in Edinburgh and develop a range of organic bottled tea. CombiniCo is offering 9.09% equity for the investment, giving the company a pre-money valuation of £2m. So far, 208 investors have pledged £206,050 with seven days remaining. The pitch states: “During its first year the store generated more than £500,000 sales and £76,000 profit from what is a 20 square metre space with six seats. We have sold more than 70,000 of our signature BiniBowls.”

Wellington Club to open restaurant led by former Gaucho executive chef this month: The Wellington Club is to open its new restaurant this month, which is led by former Gaucho executive chef Brett Duarte. The Wellington Restaurant will launch at the central London members’ club in Jermyn Street, St James’s, on Thursday, 19 September. Duarte's modern European menu will include dishes such as hand-dived Orkney scallops, and butter roast monkfish with crispy bacon and sautéed spinach. Split across ground floor and basement, the restaurant includes private dining rooms for a total of 130 covers while interiors are inspired by rock ‘n’ roll and modern art including hand-painted graffiti by Damien Hirst and neon works by Chris Bracey. Wellington Club is the brainchild of former City professional Nic Brooks and Jake Panayiotou, owner of the original Wellington Club in Knightsbridge. It relocated to Jermyn Street earlier this year.

Sydney-based chef opens central London restaurant: Sydney-based chef Damian Monley has opened a restaurant in central London. Monley, the former owner of the Flat White Cafe in Sydney and Madame Char Char in Surry Hills, has launched Liv in Belgravia. The all-day venue has opened in Holbein Place in the premises previously occupied by Como Lario. Lunch dishes include 17-hour Wagyu beef brisket with Japanese slaw; and crispy salt and pepper chicken in a soft roll with kimchi slaw and sweet soy mayo. Liv plans to open for dinner later in the year. Coffee is a key part of the drinks menu overseen by an in-house Italian coffee expert, and regular guest roasts from brands such as Alchemy and Dark Arts Coffee. Downstairs, fresh, cold-pressed juices are served at a bar along with cocktails and wine. Monley said: “After many months of hard work, recipe testing, market research and meeting our wonderful neighbours, it’s now time to bring Liv to life.” 

Family attraction looks to move to bigger site: A year-round family attraction, zoo and nature centre is looking to move from Worcestershire to a bigger site in neighbouring Warwickshire. All Things Wild, which features a range of animals, a dinosaur experience and indoor and outdoor soft play areas, has been based in Honeybourne, near Evesham, for seven years. The centre has lodged plans with Stratford-upon-Avon District Council to move its operations and expand its facilities to Willicote Farm & Equestrian Centre in Campden Road, Clifford Chambers, at a site owned by Warwick-based property development and investment company AC Lloyd Strategic Land. The application seeks a change the use from farming/equestrian to leisure. All Things Wild director Nigel Ford told Insider Media: “We have been searching for a suitable new home for the past four years because in order for the business to survive, we need to expand and attract more visitors. This is not an option at our current base due to surrounding land uses. We are currently situated on a 28-acre site and if we receive planning permission, we will be leasing an 80-acre site.” Des Wynne, managing director at AC Lloyd Strategic Land, said: “All Things Wild is a rural enterprise that is seeking planning permission to move five miles from Worcestershire to Warwickshire to meet the growing needs of its business. We have entered into an option agreement for All Things Wild to initially lease the land in Clifford Chambers with an option to buy in the future.”
Sidcup-based micro-pub operator submits plans for second south east London site: The team behind micro-pub The Hangar in Sidcup has moved to open a second site in south east London. A plan has been put forward to transform a shop in Bellegrove Road, Welling, to join the growing list of micro-pubs in the Bexley borough including The Door Hinge in Welling – the first of its kind in the capital. The application states: “My current micro-pub has created a community hub and I hope to replicate that. I will sell real ale, cider, wine and snacks in an upmarket setting. The emphasis will be on providing quality and locally and nationally sourced ale in an environment that encourages conversation. There will be no TV or gaming machines, mobile phones will be discouraged and smoking will not be permitted.”

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