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Morning Briefing for pub, restaurant and food wervice operators

Fri 13th Sep 2019 - Propel Friday News Briefing

Story of the Day:

Cabana went into administration after being unable to bridge £700,000 funding shortfall: Cabana, the Brazilian barbecue group founded by Jamie Barber and David Ponte, went into administration last month after facing a funding shortfall of up to £700,000 it was unable to bridge. A statement of administrators’ proposal by Steve Absolom and William Wright, of KPMG, revealed secured creditor HSBC was owed about £300,000 and it was expected it would face a shortfall in the funding provided. Neither preferential or unsecured creditors are expected to receive a dividend. At the point of administration Cabana had turnover of about £10m and was funded by an overdraft facility and loan with HSBC, secured loan notes totalling about £1.5m, and more than 70 shareholders through a variety of unsecured loans and equity investment. Despite efforts to stabilise the business during 2018, Cabana continued to face liquidity issues caused by the continued slowdown of the casual dining sector, an onerous lease in Newcastle, and the impending expiry of the bank’s overdraft facility. With that in mind, Cabana appointed KPMG in June to explore investment, refinancing and sale options. The report stated: “In the first five years of trading the company expanded rapidly, opening 11 restaurants. The business, and the casual dining market more widely, experienced a marked slowdown in 2017, which resulted in several of the company’s sites becoming unprofitable. In light of this the management team embarked on a ‘stabilisation plan’ throughout 2018 that involved exiting loss-making sites, reducing central costs, and moving to a monthly rental model. Despite efforts to stabilise the business during 2018, the company continued to face liquidity issues. The company forecast a funding requirement of up to £0.7m in August 2019, which it was unable to bridge. The bank had indicated no additional facilities would be considered and the current overdraft wouldn’t be extended. In view of the challenging trading environment, the significant ongoing funding requirement and uncertainty around the appetite of key stakeholders to provide further funding to the company, the directors approached KPMG to explore options.” The report showed six financial parties and 16 trade groups expressed interest in buying Cabana but the only offers came from Fired Up One and Hache Trading, two wholly owned subsidiaries of Hush Brasserie owned by Barber. The deal involved the five London sites and company assets while 156 employees were transferred. Two underperforming restaurants in Southampton and Manchester weren’t part of the sale and have closed. The London sites continue to trade as Cabana and operate alongside the company’s Hache group of restaurants and the original Hush in Mayfair.

Industry News:

Pranee Laurillard wins Wireless Social Women’s Entrepreneur of the Year: Giggling Squid founder Pranee Laurillard has been named Wireless Social Women’s Entrepreneur of the Year at this year’s Women’s Entrepreneur Conference. Laurillard was presented with the trophy by Wireless Social chief executive Julian Ross. He said: “We are delighted to have supported this award for the outstanding female entrepreneur of the year in hospitality. Pranee has built Giggling Squid into one of the UK’s largest Thai restaurant chains, with more than 30 sites. It was Pranee who told her husband Andy in 2002 she wanted to open a Thai restaurant and the couple remortgaged their house to fund their first site, in Brighton. Andy describes Pranee as the ‘brains behind the operation’, overseeing menu creation and development, while she also leads on the operations side.” Pranee was joined by Dorothy Purdew (Champneys), Joycelyn Neve (Seafood Pub Company) and Saiphin Moore (Rosa’s Thai Cafe) on the shortlist for the award, which was selected from industry nominations. The award was presented at the end of the Women’s Entrepreneur Conference, organised by Propel and Elliotts chief executive Ann Elliott. Building on last year’s debut event, the sector’s only conference to feature an all-female line-up of company leaders, more sector-leading female entrepreneurs shared their stories and expertise as they looked to inspire more women to take the plunge and set up their own business.

Propel Multi Club Conference opens for bookings, Alison Vickers to present, two free places for operators: The final Propel Multi Club Conference of 2019 is open for bookings. The full-day event takes place on Thursday, 14 November at the Millennium Gloucester hotel in London. Former YO! business development director Alison Vickers, who owns Auriac Associates and works with brands such as Dum Dum Donuts, Island Poke, Barburrito and Black Sheep Coffee, will look at the opportunities for UK brands in transport hubs and international markets through franchising. Multi-site operators of pubs, restaurants and foodservice outlets can book up to two free places by emailing Anne Steele at

COREcruitment produces executive salary benchmark: COREcruitment has produced an executive salary benchmark for the sector as a guidance tool. Based on information collated during screenings and market research, the study found average chief executive salaries are £140,000 for small businesses, £180,000 for medium-sized firms and £250,000 for large companies. For chief operating officers the average rate is £120,000 (small), £150,000 (medium) and £180,000 (large). Finance directors can expect to command £120,000 (small), £150,000 (medium) and £180,000 (large). Average marketing director salaries are £80,000 (small), £100,000 (medium) and £140,000 (large). COREcruitment said businesses looking to hire top executive talents had also been focusing on offering attractive employee benefits such as paid sabbaticals for long service. A COREcruitment spokesman said: “The market is a tough environment for some businesses. We are seeing cost-effective and creative solutions to employee benefits that can really add value.”

JD Wetherspoon to reduce all food and drink prices for one day to highlight sector benefits of VAT cut: JD Wetherspoon is to cut the price of all food and drink by 7.5% for one day as it aims to highlight the benefit of a VAT reduction to the hospitality industry. The company’s pubs in England, Wales, Scotland and Northern Ireland will host Tax Equality Day on Thursday, 19 September. All food in pubs is subject to 20% VAT compared with supermarkets, which benefit from zero VAT on the vast majority of food products. Wetherspoon founder and chairman Tim Martin said: “Pubs suffer a huge disadvantage, paying about 16 pence in business rates per pint versus about two pence for supermarkets. In addition, there is huge VAT inequality and unfairness. A reduction in the level of VAT on a long-term basis would create a level playing field and generate growth and jobs in the important leisure and hospitality sector and help the high street, of which pubs are an integral part. We are keen to highlight the amount customers could save if VAT in pubs was lowered permanently. We aim to make it the busiest day of the entire year in our pubs.” UKHospitality chief executive Kate Nicholls added: “Pubs are paying about one-third of their turnover in tax, which seriously restricts their ability to invest in their venues and staff, and increases prices for customers. A cut in the rate of VAT for the hospitality sector could help to address this unfairness.” Tax Equality Day launched in 2014. 

Company News:

Pret A Manger chooses Canary Wharf EAT for first Veggie Pret conversion: Pret A Manger, the JAB Holdings-backed chain, has chosen the EAT store in London’s Canary Wharf as the first to become a Veggie Pret since it acquired its 90-strong fresh food-to-go rival in June, Propel understands. At the time the deal was agreed, Pret said it planned to convert as many of EAT’s stores as possible to Veggie Prets – 75% of EAT’s estate is in London with many close to an existing Pret. It has since placed circa 15 EAT sites on the market, including 13 in London. A Pret spokesman said: “Yes, the Canary Wharf EAT site will be the first one to become a Veggie Pret. We continue to want to convert as many as we can and are currently finalising a review of the EAT estate to assess which ones can be converted.” The first permanent Veggie Pret launched in September 2016 and the concept has expanded to three further locations in London and Manchester. Pret’s then-chief executive Clive Schlee said at the time of the EAT acquisition: “The purpose of this deal is to serve a growing demand of vegetarian and vegan customers who want delicious, high-quality food and drink options. The acquisition of the EAT estate is a wonderful opportunity to turbocharge the development of Veggie Pret and put significant resources behind it.” Since the deal, Mike Rainer has been promoted to EAT managing director, replacing Andrew Walker. Rainer had been EAT’s chief financial officer since October 2016. Schlee retired as Pret chief executive at the end of July and handed the reins to chief operating officer Pano Christou. Schlee remains on Pret’s board as a non-executive director. 

Rosa’s to replace Bill’s in Battersea: TriSpan-backed group Rosa’s Thai Cafe is to further strengthen its London estate with an opening in Battersea, Propel has learned. It is understood the Gavin Adair-led business has secured the former Bill’s site in Northcote Road for an opening later this year. Earlier this year, 17-strong Rosa’s opened its second regional site, in Leeds, at the Trinity Centre. The group made its regional debut earlier this year in Liverpool, at the Royal Albert Docks, and is believed to be in talks over sites in Manchester and Birmingham. Bill’s is currently focusing on its refurbishment programme and opening new sites. In the past three weeks it has reopened sites in Southampton, Trafford Centre in Manchester, and Sevenoaks. A new site in Manchester Spinningfields is currently under construction and will open at the end of October. AG&G is understood to have acted on the Battersea deal.

Parogon Pub Group reports like-for-likes up 4.3% as it opens seventh site, all outlets to trade on Christmas Day for first time: Staffordshire-based Parogon Pub Group saw like-for-like sales increase 4.3% in the first half of 2019, while the company will trade from its sites on Christmas Day for the first time. Co-founder Rich Colclough also told Propel the group was continuing to seek out “attractive” freehold sites in the Shropshire, Cheshire and south Staffordshire regions, while the acquisition of another multi-site operator was also a “feasible option”. Colclough provided the trading update as the company opened its seventh site – The Red House in Lilleshall – following a £950,000 investment, creating 70 jobs. The company bought the property from Greene King in October last year. An eighth site, the Boughton Arms, near Crewe, is due to open in early 2020. During the first quarter of 2019, The Swan with Two Necks in Blackbrook, which was the company’s first pub to open in 2007, was shut for five weeks for a £500,000 refurbishment. Despite the closure, the group saw revenue increase 1.2% in the first half of 2019. Colclough said an increased focus during the period on maximising economies of scale with suppliers had translated into an uplift in gross profit from 68.1% to 69.4%, while improvements to its staff engagement programme had contributed to reduced employee turnover and a reduction in labour costs from 34.2% to 32.5%. Colclough added: “Traditionally, about 25% of Ebitda has been generated in the crucial Christmas trading period. This year, for the first time, we are opening all sites for Christmas Day with targeted sales of £150,000. Reservations for the day are close to capacity.”

Anthony Demetre’s former Wild Honey site in Mayfair sells for six-figure premium: The Mayfair site that formerly housed chef proprietor Anthony Demetre’s Wild Honey has been sold. The 2,267 square foot unit in St George Street achieved a rent of £103,000 per annum and a six-figure premium, which has been undisclosed along with the identity of the new owner. The site comprises a 1,104 square foot ground-floor area and a 1,163 square foot basement. The lease runs until 2033. Restaurant Property advised on the deal, with no other agents involved. Restaurant Property founding director David Rawlinson said: “While we have seen premiums reduce over the past year we are still seeing strong demand from international operators, who are taking advantage of the cheap pound, as well as experienced operators taking this opportunity to acquire otherwise hard-to-find prime sites.” Demetre and Will Smith launched Wild Honey in October 2007 as a sister restaurant to Arbutus in Soho. It won a Michelin star within a year but lost it in 2016. In the same year Demetre and Smith sold Arbutus and Smith moved to Scotland to pursue private ventures. Demetre put Wild Honey on the market in January this year, closing the restaurant on 1 March before reopening it at the Hotel Sofitel London St James on the corner of Waterloo Place and Pall Mall.

Iceland to launch cafe concept offering frozen food: High street frozen-food retailer Iceland is to open its first cafe. The company has partnered with The Range as an expansion of a project that will see 27 Iceland concessions open in branches of The Range by the end of the year. The concept will launch at The Range’s store in Paignton, Devon, which will open on Friday, 27 September. The cafe will serve a selection of Iceland meals customers can try then buy from large on-site freezers. The Range founder Chris Dawson said: “We are really excited about this concept and you can now try before you buy. With our sales already climbing by more than 16% this year, new ideas like this keep the business fresh and moving forward – our customers will love it.” The Range sells more than 65,000 products across 16 departments, including DIY, kitchen and dining, furniture, arts and crafts, and textiles.

Pure reopens Shaftesbury Avenue venue as company sees new-look sites generate double-digit like-for-like growth: Healthy food-to-go group Pure has reopened its site in Shaftesbury Avenue following a three-week refurbishment, with the company revealing its new-look sites are generating double-digit like-for-like growth. Having opened in July 2012 as the company’s third branch, the refit has brought Pure’s signature blue fascia, free still and sparkling water, and an extra 25 seats to the Covent Garden site. The makeover is one of four Pure has completed during the past 12 months along with six new openings. The openings and refits form part of Pure’s growth towards becoming a national food-to-go chain. All Pure shops will have been converted to the new style by the end of 2019, ensuring the brand is ready for “significant expansion in 2020”. Co-founder Spencer Craig said: “Our previous refits have been a huge success, bringing double-digit like-for-likes. A refit is always a reminder that making our shops look as beautiful and appealing as possible is one of the key components of success. If you don’t keep reinvesting, customers will look somewhere else but, equally as important, it is also great for our team, who feel uplifted by the new look and investment. We are excited to be back open in Shaftesbury Avenue.”

Preston-based restaurant operator to open fourth site: Preston-based restaurant operator Mark O’Rourke is to launch his fourth site in the city. O’Rourke, who operates We Don’t Give A Fork, Fino Tapas and Otter’s Pocket, will open 263 restaurant in Winckley Square Hotel later this month. The head chef will be Charlie Yates, who has worked at Northcote Manor and Wreckfish, with the restaurant offering a la carte and seven-course tasting menus. O’Rourke told Lancashire Live: “I have always wanted to open a premium restaurant but I’ve not come across a location until now that has been viable. The food is going to be top level but I don’t want to call it fine dining because the service and atmosphere isn’t going to be pretentious. I want the food to be some of the best in Lancashire.”

Food blogger Niamh Shields to launch debut kitchen: Niamh Shields, better known as food blogger Eat Like A Girl, is to open her debut site, in Islington, north London. Shields, who has operated pop-ups and at markets and festivals, has taken over the kitchen at Irish bar Homeboy in Essex Road. The space will launch on Sunday, 22 September and offer a number of her takes on Irish favourites such as taco fries with black pudding ragu and chipotle taco sauce, and curry chip poutine. Planned weekend brunch dishes include potato pancakes, waffles and a full Irish. Aaron Wall and Ciaran Smith launched Homeboy in December. It was ranked 11th in the Top 50 Cocktail Bars in the UK for 2019. Shields told Hot Dinners: “I am so excited to get back out from behind the screen and start serving my food again. Homeboy was already one of my favourite London bars and Aaron and Ciaran are terrific partners to work with. I can’t wait to get started. The menu is a list of our favourite things from home and where we live now.”

First wave of operators to open next month at Plymouth’s Drake Circus leisure development: The first wave of operators will open at British Land’s Drake Circus leisure development in Plymouth city centre next month. Azzurri Group-owned Zizzi, better burger brand Five Guys and Nando’s will launch at the £53m, 100,000 square foot complex on Monday, 21 October along with a 12-screen Cineworld. The following day Loungers will open a Cosy Club while Paradise Island Adventure Golf, which is owned by Brighton Pier Group, will follow at the end of the week. The remaining seven units, plus the Sky Bar, are empty but agent Cushman and Wakefield said two were under offer while negotiations were at an advanced stage with two other “national operators”. Greg Lumley, centre director at Drake Circus, told Plymouth Live: “There is huge excitement around the brands and attractions we already have on board and we look forward to bringing in more great additions in the coming months.”

Newcastle-based operator opens second site: Newcastle-based operator Viehard, which operates restaurant Uno’s, has opened a second restaurant in the city. The company, led by Stevie Pattinson and Richard Nellis, has launched Hibou Blanc in Bigg Market at an empty site formerly occupied by The Gentleman restaurant and neighbouring listed building the Sunlight Chambers. Hibou Blanc, which is French for “white owl”, is a high-end, all-day restaurant. The venue features a 70-cover brasserie, a bar and a smaller study space designed for private functions. Pattinson told Insider Media: “The brasserie focuses on classic British dishes cooked in an unfussy style with the very best ingredients, while a lighter menu is available in the bar.” Italian restaurant Uno’s opened on Newcastle’s Quayside in 1989.

Signature F&B brand sought for Kensington Roof Gardens: Landlord CKL has appointed a new leasing team to secure a signature food and drinks brand for Kensington Roof Gardens in central London. P-Three and Cushman & Wakefield are acting jointly on the 14,511 square foot space, which is the UK’s largest roof garden. P-Three is a new business founded by former Cushman & Wakefield partners Justin Taylor, Hannah McNamara and Thomas Rose. An operator is being sought that will “celebrate the grade II-listed gardens and restore the venue to its position as one of London’s most sought-after venues”. The gardens are part of CKL’s wider Kensington Estate, which offers a mix of office, retail and leisure spaces. Rose, who focuses on the hospitality sector at P-Three, said: “The character, heritage and location of the space make it perfect for a high-quality operator to create something unique.” The roof gardens opened in 1938 to crown the former Derry & Toms department store in Kensington High Street. The gardens were open to the public until January 2018 when the leaseholder, Virgin Limited Edition, was unable to reach an agreement with the freeholder about renewing the lease. Under Virgin, the 1.5-acre space was renowned for its pink flamingos and lavish receptions.

London’s first grab-and-go cevicheria to launch in Fitzrovia next week: London’s first grab-and-go cevicheria offering raw food bowls is to launch in Fitzrovia on Monday (16 September). Crudo will open in Riding House Street offering South and Latin American-inspired bowls and a DIY option. The concept’s signature bowl will be sea bass marinated in leche de tigre sauce and topped with sweet potato, Andean chilli, Peruvian toasted corn and plantain chips. The DIY ceviche will allow diners to choose a base of rice, lettuce or quinoa, then add sauce and toppings.

Fledgling pub company Lunar to open debut site next month, plans two more: Fledgling pub company Lunar will open its debut site in early October, with plans to launch two more outlets in the next 18 months. Founded by Hubert Beatson-Hird and Oliver Marlowe, Lunar will open The Hunter’s Moon in South Kensington, west London, at a 2,587 square foot site in Fulham Road. The venue will be split between a 25-cover pub and a 48-cover dining room at the rear. The Hunter’s Moon will offer a modern European menu with dishes created by Marlowe, who has held executive chef positions at a number of pub groups as well as Michelin-starred restaurants The Glasshouse and Chez Bruce. Beatson-Hird said: “Having managed London pubs since 2012 for a variety of independent groups, it is great to open a site I can call my own. The opportunity to do this with Olly is fantastic as the food he creates is exceptional.”

Paul UK extends Too Good To Go partnership: Paul UK, the French bakery and cafe brand, has extended its partnership with food waste app Too Good To Go, with all 37 Paul stores now offering leftover sandwiches, viennoiserie and patisserie to customers for a reduced price at the end of the day. Since joining the app, Paul said it had saved more than 35,000 portions of food from going to landfill. Paul UK sustainability manager Rachel Meier said: “We want to make sure as much food as possible feeds people, not landfill.” Hayley Conick, UK managing director of Too Good To Go, added: “We are on a mission to eliminate food waste globally and we’re delighted Paul is committed to helping us do this.” Last month Paul UK reported like-for-like sales rose 3.4% for the year ended 31 December 2018, with turnover up 7.4% to £38m. Online sales increased 43.9%. As part of the Paul Cares Policy, the company doubled its reusable cup discount to 50p during the year and removed all plastic straws. Paul UK also works with food charity The Felix Project to supply surplus bread to vulnerable people.

Middle Eastern vegetarian concept Bubala opens permanent site: Vegetarian Middle Eastern concept Bubala has opened its debut permanent site, in London’s Spitalfields. The concept is the brainchild of Berber & Q founder Marc Summers and chef Helen Graham, who has worked at The Palomar, The Barbary, The Good Egg and Ottolenghi. Bubala has been popping up for the past year and a half in London’s Carousel, Brunswick East, Berber & Q and Untitled Bar. Bubala, which is Yiddish for “darling”, has launched a 30-cover restaurant in Commercial Street at the site formerly occupied by Gul and Sepoy, which closed last year. The concept offers dishes designed for sharing, including fried aubergine with zhoug and date syrup, cabbage braised in pomegranate with za’atar chimichurri, and confit potato latkes.

Glendola Leisure reopens bar and restaurant at Edinburgh hotel following £1m revamp: Glendola Leisure, led by Alex Salussolia, has reopened its bar and restaurant at boutique hotel Le Monde in Edinburgh following a £1m revamp. The four-month transformation of the ground floor is the biggest at the 18-bedroom venue since it opened 13 years ago. Through the George Street entrance lies a new semi-circular Laurent Perrier champagne bar that leads to the main bar and restaurant space. Le Monde has also unveiled a new small plates menu with “land” and “sea” options made with locally sourced produce. General manager Darren Scott said: “We have taken that wonderful idea of a trip to exciting places around the globe and reinvented it for modern customers.” The venue also houses Dirty Martini, Le Monde’s upstairs bar and event space; and Shanghai Nightclub. Glendola Leisure operates sites in London, Glasgow, Edinburgh and Manchester and on the south coast.

New craft brewery and taproom to open in Newcastle: A craft brewery and taproom is to open in Newcastle. Full Circle Brew Co, which will include a brewing facility, taproom, liquor store and event sspace, will launch at Hoults Yard in November. Full Circle Brew Co has been looking for a location for 18 months. General manager Ben Cleary told Insider Media: “We have all licences and permissions in place and building work will start in the next couple of weeks when we take receipt of our custom-made 30HL brewhouse. We’ll have 20 taps, ten for our own beer and ten for guest beers.” The taproom will house 100 people, offering a selection of pale ale of varying strengths. Charlie Hoult, managing director of Hoults Yard and parent company Hyhubs, said: “With the recent additions of Ghetto Golf, Proven Goods Bakery, Patisserie 28 and now a brilliant craft brewery, Hoults Yard is becoming a destination and more than just a successful business village.”

Marston’s scoops sustainability awards: Marston’s has won two categories in the Footprint Drinks Sustainability Awards. The company won the sustainable use of water, and waste prevention and management categories. Marston’s took control of all its water consumption data in 2017, delivering a return on its investment in less than a year and saving an average 160,000 pints of water a day across the business. This year the company introduced 100% recycled outdoor furniture, while Marston’s was the first pub company to operate zero waste to landfill. Marston’s waste and recycling co-ordinator Jon Davies said: “We are constantly looking at new ways to improve our practice and become a leading sustainable company.” Other award winners were Brewgooder, Carlsberg UK, Garçon Wines, Good Things Brewing, Karma Cola Co, Toast Ale, Warner’s Distillery and Wye Valley Brewery. Andy Wood, of Adnams, was given a special achievement award.

West Berkshire-based brewery acquires first pub: West Berkshire-based brewery Wild Weather Ales has acquired its first pub. The company has taken on The Eldon Arms in Reading, which will reopen on Friday, 20 September as the Weather Station. The pub in Eldon Terrace will have 20 keg beer lines, one serving prosecco and three cask lines. Half the keg lines will serve Wild Weather beer along with two of the cask lines. Wild Weather Ales head of sales and marketing Iain Clarke said the brewery had been looking for premises in the town for some time. He told Berkshire Live: “The beer scene in town is really lovely and one of the criteria was we didn’t want to be too close to any of the venues already serving our beer. It will be nice to have something different on this side of town.” Wild Weather already runs a taproom at its brewery in the nearby village of Aldermaston.

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