Propel Newsletter Archive Page

Crowdcube – a third of our funded companies in food and drink sector: The crowd-funding website Crowdcube has raised £11m so far this year, with 23 of the 70 companies that have raised funding through Crowdcube, or one third, coming from the food and drink sector, co-founder Luke Lang told the Propel Multi-Club conference in London last week. Lang said the equity crowdfunding company had ambitious plans, and crowdfunding in general is growing on a big scale. He predicted that money raised through crowd-funding totals will reach $5.1bn around the globe by the end of this year. “Investors like it because it is quick, online and accessible 24 hours a day,” Lang said. “Deals are structured in an accessible way and there are no investment fees, plus they only see high-quality vetted business plans.” Crowdcube, which has raised around £16m from 48,000 investors since it started in 2011, aims to offer an alternative solution to bank finance. The average investment is £2,600. “In its crudest sense it is a bit like Dragon’s Den,” Lang said, with entrepreneurs able to pitch their ideas and businesses online to thousands of potential investors. Its biggest fund-raising in the sector has been the £1m raised for Jonathan Downey’s Rushmore Group, with £4.9m raised so far for food and drink companies.

Industry News:

Adam Hyman – queues outside London restaurants are a positive sign: Restaurant consultant Adam Hyman has argued the increasing number of queues to be found outside London restaurants are a positive thing. He said: “In the last few years, several London restaurants have almost become synonymous with queuing. But the press seems recently to have turned against the trend. I don’t enjoy standing in line, but I confess I’m a little baffled by this sudden antipathy. That people will wait in the rain before buying their dinner shows how far London restaurants have come: the product has to be good. Worse, I think, are places that accept reservations a year in advance. Eating out should be spontaneous where possible, and few dinners are so important that they need months to plan. I’d rather wait at the bar with a dry martini than fret about a table next summer.”

MP calls for pubs business rate relief: Conservative MP Sir Greg Knight is calling on the government to extend rate relief for pubs. In April, the business rate relief for small concerns will come to an end. Knight, the MP for East Yorkshire, is one of the sponsors of a cross-party Early Day Motion calling for the government to extend the relief and conduct a review of pub business rates. He said: “80% of pubs are small businesses employing local people, and business rates form a large part of their fixed expenses. Across Britain, pubs are still closing at an alarming rate, especially small family-owned pubs in rural areas. The government is to be applauded for cutting the beer tax and red tape for pubs and I now hope it will look at the matter of business rates.”

London international visitor numbers rise 12.9%: International visitor numbers to London are at a record high as the capital continues to bask in a post-Olympic glow that has seen 7.9 million tourists visit London in the first six months of 2013, up 12.9% compared to the same time last year, and spend more than £4.9bn, a 12.4% increase. Tourism in London supports 226,000 jobs, around 5% of all employment in the capital. Every £58,000 generated by tourism supports a job in the sector.

Downing Pub EIS deadline extended: The deadline for investing in the Downing PUB Enterprise Investment Scheme has been extended to 20 December. A total of £10.8m has been raised so far. Downing, a London-based investment company that manages around £400m in funds including 16 VCTs, 15 EISs and 1 OEIC, said: “There was a fall of approximately 30% in the average price of public houses from the start of 2008 to the end of 2009. From 2009 until the end of 2012, the rate of fall reduced to approximately 5%. [Downing] considers that there are currently good opportunities to purchase pubs at prices significantly below the peak of the market.”

Imbiba team to hold briefing event tomorrow: Former Drake and Morgan backer Imbiba is holding a briefing event tomorrow, 13 November, for would-be investors in the newly launched third Imbiba EIS fund. It will invest in two established EIS bar, restaurant and events businesses, Darwin & Wallace and Camm & Hooper. Investors will receive a spread of bar and restaurant EIS investments, focused on central London. Imbiba said: “The Imbiba management team possess an outstanding track record, having achieved an average 35% pa return for EIS investors over the last 15 years across nine successful exits. Imbiba’s most recent exit, in April of this year, was the sale of the award-winning central London-based Drake & Morgan. This returned £17m on a £3m investment, equating to 5.7x cash invested and an IRR of 50% before EIS tax relief.” The event is taking place on 13 November at the first Darwin & Wallace site, 11 Pimlico Road, near Sloane Square, central London. Those attending will have the chance to meet the Imbiba and Enterprise management teams and hear more about the fund.

Company News:

Loungers founder reports very low rent-to-turnover ratio: Alex Reilley, the founder of the café bar concept Loungers, has reported that the company has maintained its exceptionally low rent to turnover ratio despite expanding to 39 sites. The company was founded in Bristol and achieved its very low rent to turnover ratio by taking suburban sites, often unlicensed. Reilley told last week’s Propel Multi Club Conference that the rent-to-turnover percentage is running at just 5.3%, which is one of the lowest in the industry. Loungers is planning 15 openings in 2014. The company opened its 39th site, the Otto Lounge, in Heswall, Merseyside last month after a £425,000 investment in a unit created from the redevelopment of a former Kwik Save store.

Soho House Group lodges restaurants and hotel plan: Soho House Group is to partner the New York hotel developer Sydell Group to develop the former Midland Bank headquarters, a Grade I-listed building on Poultry in the City of London, less than a minute’s walk from the Bank of England. Plans have been lodged with the City of London Corporation for a 255-bed hotel. Soho House agreed a lease last December and will occupy the entire 310,000 sq ft building. The Sydell Group, which specialises in “lifestyle” hotels, will be the developer. Rather than Soho House’s usual “members only” policy, the building will be accessible to the public. The hotel will contain restaurants, bars, health and leisure facilities, event spaces and rooftop terraces with a bar/restaurant and swimming pool. The building’s grand banking hall on the ground floor will be used as the hotel’s reception area, and the main entrances from Poultry and Princes Street will be retained. Many of the existing banking counters will be refurbished and the former behind-the-counter areas subdivided into restaurant, café, bar and shops. Domes on the seventh floor will be transformed into bars with terraces and the top floor will be converted into a terrace with a rooftop bar.

Pub owner launches traditional bakery: Beannchor Group, which owns around 50 pubs in Northern Ireland, has launched a traditional bakery called Patisserie Mimi. The bakery is located next to Beannchor’s newest pub, the National Grand Cafe Bar. It is billed as a high-end artisan bakery selling breads from bloomers to Bavarian rye, and soured spelt flour bread with toasted sesame, pumpkin and sunflower seeds. Bill Wolsey, managing director of Beannchor, which also owns the Merchant Hotel, Portaferry Hotel and around 50 pubs, said: “It is very exciting to be bringing the traditional bakery back in to Belfast but giving it a continental twist to offer the city something new and innovative.”

Top inn owner says Norfolk shoreline should be rebranded Royal Coast: Brendan Hopkins, the owner of The Hoste Arms in Burnham Market, Norfolk has argued that the county should be rebranded as the “Royal coast”. However, Pete Waters, brand manager for Visit Norfolk, said that although the county was proud of its royal connections: “We also have to appreciate that the royal family come here to relax and escape the flashbulb of the paparazzi and the prying eyes of the media. That will become even more important if, as we hope, we have the second and third in line to the throne living here. Norfolk people are very respectful of that and in saying we are a ‘royal county’, we should always be subtle and discreet.”

M&B signs deal with Zonal: Zonal has signed a major agreement with Mitchells & Butlers to provide all M&B sites with its hospitality technology solutions. It comes after a successful pilot scheme in a limited number of M&B outlets. Martin Taylor, director of business change and technology at M&B, said: “Zonal is helping us deliver innovation in technology and business processes to support our needs. They share our vision, understand our business and are one of the strongest players in the UK market. Our aim is to install more efficient technology to help transform the guest experience. Part of this technology journey is investing in new systems for our 1,600 outlets, and we have begun the installation across All Bar One, Harvester and O’Neill’s.”

All Bar One re-opens in Bath with focus on interaction: Mitchells & Butlers’ All Bar One in Bath has re-opened after a refurbishment with a greater focus on social interaction. The refurbishment has seen the introduction of larger tables and a more tapas-style menu, as well as wine-tasting and cocktail-making areas at the bar. Manager Stephen Morris said people were more focused on the social element of a night out rather than just concerned with drinking: “The wine tasting and cocktail-making areas are about encouraging greater interaction.”

St Andrews Brewing Company to open city’s first brewpub: St Andrews Brewery is to open the Scottish city’s first brewpub this week, in a former restaurant in South Street. St Andrews Brewing Company boss Bob Phaff has teamed up with well-known local businessman Tim Butler, who already runs the town’s Seafood Restaurant. Phaff came to St Andrews having gained experience while working in the industry in the US and immediately saw a gap in the market for an American-style brewpub. He said: “The new pub and restaurant will have around 20 casks and kegs on offer at any one time and we will also be creating a small on-site brewing facility to produce casks exclusively for the pub. We have already converted one room into a temperature-controlled cellar. A specialist team is doing a fantastic job fitting the place out. It is full of character and we have already found two fireplaces and old stones that were apparently once part of the cathedral. There will be a simple layout, with lots of blackboards telling the story of the beer and food. There will be a show brewery and snug-type bar downstairs, with a larger, beer festival-type of room and a small tasting room upstairs. It is something really different from the pubs already in town. Half of the beers will be my own brews and half other people’s beers, including the ‘best of the best’ from all over the UK, America, and Scandinavia.”

Indian restaurant in Bedford repossessed: An Indian restaurant in Bedford that opened its doors less than four months ago has been repossessed. Signs were posted on the front and back doors of The Rickshaw, in Bedford High Street, at the end of last week. Wooden boards prevent access to the property, which is owned by the Garcha Group. The sign reads: “Access to this building is denied by order of the landlords. Any attempt to remove this hoarding to gain entry will result in prosecution.”

Ca’puccino to open at Heathrow: The Italian coffee brand Ca’puccino will open a new outlet in Heathrow Terminal 2 in June next year. The cafe, launching in partnership with WH Smith, will offer seasonal sandwiches and pastries. It will be airside, on the ground floor, close to luxury retailers. The Heathrow outlet will be the fifth in the UK for the brand. The first opened inside Harrods, London in 2008, followed by Westfield, The King’s Road Chelsea and Basil Street, Knightsbridge. Sofia Dimen, chief operating officer at Ca’puccino said: “The new opening in Heathrow’s Terminal 2 fits perfectly in our global growth strategy and highlights the entrance of Ca’puccino in a new segment, not yet penetrated.”

New pop-up opens in Lewisham: A new pop-up restaurant aiming to showcase some of the area’s best budding food businesses has opened in Lewisham, South East London. The Catford Canteen, housed in a vacant unit on Catford Broadway, is an initiative launched by Lewisham Council as part of its regeneration plans for the area. Deputy Mayor Alan Smith said: “The Catford Canteen allows us to embrace an opportunity by turning a short term vacant unit into something new, exciting and vibrant and it gives the local community a sense of what their town centre could become.”

Cote owner buys bottle firm: The private equity owner of the high street dining chain Cote Restaurants has added a British gin and whisky bottle maker to its portfolio. CBPE Capital, which also owns the ten pin bowling company Hollywood Bowl, has snapped up the Yorkshire-based Allied Glass for between £120m and £130m. Allied Glass makes the glass bottles for popular Diageo brands Johnnie Walker whisky and Smirnoff vodka. It is the second time CBPE has backed the firm after originally carving out the company from its then parent, Associated British Foods, in a management buyout in 2002.

Domino’s Pizza fields team of online players: Domino’s Pizza put together a team of gamers who played “Call of Duty: Ghosts” online against members of the public, as part of its #GameFuel campaign. To coincide with the release of “Call of Duty: Ghosts”, which went on sale last week, a squad of players represented the pizza delivery company online by playing against gamers and pizza fans. Domino’s promoted the game through its social media channels and ask “Call of Duty” players to add Dominos Pizza UK on the game on the Xbox 360. Gamers who played well against the Domino’s team received money-off voucher codes.

Boutique hotel in Durham goes on the market: The lease of Gadds Town House, a boutique Georgian hotel in Durham city with 11 bedrooms, has gone on the market with agent Christie + Co for £260,000. The hotel has 11 rooms, including three lodge rooms with private outdoor hot tubs, and is situated on Old Elvet, a few hundred metres from the centre of the city. Turnover to June 2013 was in excess of £750,000. Owner Nigel Gadd, who said: “We purchased the hotel, then called the Fallen Angel, some three-and-a-half years ago. In that time it has been transformed at huge expense from a novelty to a quality-driven hotel. We have decided to sell as our daughter, who was to run and own the hotel, has now decided to become a full time ‘live at my home’ mum!”

Oakman Inns applies to go continental at Beech House: Oakman Inns and Restaurants has applied to extend its weekend opening hours after its customers called for a more continental approach. The Beech House in Beaconsfield, Buckinghamshire, launched in April after an £800,000 investment, replacing a newsagents on Penn Road. Chief executive Peter Borg-Neal said: “Since our opening in April, we’ve been delighted by the support we’ve had from the local community and have built a loyal customer base and our application is largely in response to their feedback and requests. For example, we are in the embarrassing position of having to tell our customers to finish their drinks at 11pm even if they are still eating, which is felt to be a little restrictive, especially when compared to our European cousins.” A decision will be made on 18 November on whether Beech House’s licence can be extended from 11pm to 12.3pm on Thursday, Friday and Saturday.

Hoxton pub saved from demolition: A Victorian pub in Hoxton, East London earmarked for demolition to make way for an £18.9m museum extension has been saved, and the architects behind the plans have been dropped. Sir David Chipperfield’s design for the Geffrye Museum extension in Hoxton had included demolishing the disused Marquis of Lansdowne pub, which survived the Blitz. More than 2,000 people signed a petition calling for the pub to be saved, and branding the plans “vandalism”. Now the museum has dropped Chipperfield and is recruiting new architects, saying any future plans would have to include the retention of the pub.

McDonald’s select young farmers for food scheme: McDonald’s is recruiting three student farmers for its Progressive Young Farmer Training Programme, which aims to help younger people see farming as a career path. Launched last year, the scheme aims to provide aspiring young farmers with the blend of farming and business skills needed to succeed in the sector. This includes land management and animal husbandry through to marketing and IT skills. Lauren Hladun, 20, has already won a place. She said: “The placement opportunity stood out for me because it gives young farmers like myself a unique opportunity to follow the entire supply chain in action, from farm to fork. Since I shall be working at lots of different companies that supply McDonald’s, I will gain a real range of skills and experience in many different areas of the industry.”

Flagship Living Room site closed: The flagship Living Room site in London’s Heddon Street has closed after the landlord declined to assign the lease to its new operator Stonegate Pub Company. One industry source suggested that 3,000 Christmas bookings are now in jeopardy. A spokesperson for Stonegate Pub Company said: “The Living Room, Heddon Street, London has been returned to landlords who have exercised their Right of Pre-Emption (RP-E) option to take back ownership of the lease of the premises. All other Living Room sites remain under the ownership of Stonegate Pub Company.” Stonegate Pub Company bought the 13-strong Living Room estate from Premium Bars & Restaurants in August. The precise value of the deal was not known but it has been suggested the Living Room estate is worth around £10m, subject to successful assignment of leases. Meanwhile, two Living Room sites are to be relaunched this month after conversion to Stonegate brands – The Living Room at The Hub in Milton Keynes is to re-launched as Missoula on the weekend of 28 November. The Living Room at Tower Bridge is to be converted to a Slug & Lettuce with a view to re-opening the site in mid-November. A spokeswoman for Stonegate said: “The Living Room sites are being viewed independently as to whether they will remain a Living Room or converted.” The redesigned Milton Keynes venue will include a brand new food menu, a bar upstairs as well as expanded floor space.

Pub licensees support VAT reduction campaign: Pub licensees across the UK are overwhelmingly in favour of the campaign to reduce the level of VAT on food and drink from 20% to 5%. That is the finding of a major survey undertaken by the independent market research agency Cardinal Research, which specialises in the licensed trade, on behalf of the VAT Club Jacques Borel. A total of 1,003 licensees were interviewed for the survey, titled “Attitudes to VAT on food in pubs and restaurants versus supermarkets”. The survey highlighted that 96% of the licensees say the pub and restaurant industry should campaign for the reduction, 94% support the campaign by the VAT Club JB and 86% agree that it is unfair that supermarkets do not pay VAT on food while pubs have to. VAT Club JB chairman Jacques Borel said: “The findings of this important survey clearly emphasise the fact that licensees across the UK wholeheartedly back the vital campaign to reduce the level of VAT on food and drink in pubs and restaurants. It also highlights the fact that individual licensees back the VAT Club JB and believe that if the campaign is successful, it will have a positive effect on their business. The clear message to government and individual MPs of all political parties is that the VAT campaign is of great importance to licensees and the pub industry.”

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