Propel Newsletter Archive Page

Cornish Bakery expansion to focus on high street with plans to open 15-plus new shops a year: Cornish Bakery founder Steve Grocutt has told Propel the brand’s expansion will focus on the high street, with plans to open 15-plus new shops a year. It comes following the 51-strong independent chain’s results for the year ending 30 May 2022, in which it reported record sales and profit margins, which were achieved across tourism locations, with a strong recovery also evident in its high street and factory outlet centres. The high street is relatively new territory for Cornish Bakery, with a current 80-20 split in favour of tourist locations. But Grocutt expects this to be more like 50-50 by the time the company reaches 100 stores, with 95% of the next 50 set to open in UK high streets. “We’re now focusing on the UK high street.” he said. “Historically, we took the decision not to invest there due to cost and competitors, so we built the business through tourism locations, where no-one else was going at the time. In 2019, we decided to give it a go and opened three high street shops, and they have been going very well – in fact, well ahead of target. The pandemic did us a favour really as it opened the door to the high street. We’re finding it is more investible now and I have separate agents for the north and south looking at sites in quality market towns and smaller cities.” Cornish Bakery has six new sites either being built or in legals, with Bury St Edmunds, Bakewell and Truro due to open in the coming weeks, as well as a second bakery in Whitby. The pipeline following that includes shops right across the UK but focusing on the north and south east. Of the 51 current sites (including six locations under a franchise agreement with Roadchef), 49 are in England and two are in Scotland. “We’ll be making a decision soon on Scotland, starting in Edinburgh, but going further north will need some clear planning,” Grocutt added. “There’s lots happening in Wales and there is an opportunity for us in both Northern Ireland and the Republic too.” The company reported turnover of £20,892,358 for the period (2021: £11,709,299) and a pre-tax profit of £3,117,769 (2021: £1,474,200). Ebitda rose from £2.4m in 2021 to £4.2m. Dividends of £200,000 were paid (2021: nil) and it received £84,534 in government grants (2021: £1,865,258). The company has net current assets of £1,486,771 at 26 May 2022 (2021: £1,594,820). Staff levels rose from 336 in 2021 to 442. Cornish Bakery features in Propel’s Turnover & Profits Blue Book, which is updated each month and now features 705 UK pub, restaurant, cafe and hotel operators. Its turnover of £20,892,358 in 2022 makes its the 268th highest in the database. The Blue Book ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription.

Industry News:

Updated Premium Database of Multi-Site Companies released today, two more databases to follow this week: A total of 21 new multi-site companies, operating 64 sites, have been added to the next edition of the Propel Premium Database of Multi-site Companies, which will be released today, (Monday, 27 February), at midday. The updated Propel Multi-Site Database, which is produced in association with Virgate, includes regional restaurant and bar operators, growing entertainment concepts, and expanding hotel operators. Premium subscribers will also receive a 1,700-word report on the new additions to the database. The comprehensive database is updated monthly and provides company names, the people in charge, how many sites each firm operates, its trading name and its registered name at Companies House if different. The database now features 2,789 companies. Meanwhile, the next edition of the Who’s Who of UK Food and Beverage will be sent to Premium subscribers tomorrow (Tuesday, 28 February), at midday. It is the first database where full profiles of 650 of the UK’s top food and beverage operators are available in one place. It features more than 170,000 words of content, including 46 updated entries, while 16 new companies have been added. The companies, listed in alphabetical order, will have their most recent results reported as well as broader information around Ebitda, plans and trading style available. The database merges Companies House information, interviews and other public information to provide an easy to reference and exhaustive guide to the sector. Premium subscribers will also receive the next edition of the New Openings Database on Friday (3 March), at midday. It focuses on newly announced openings and upcoming launches in the sector and is updated every month. The next edition also includes a 7,500-word report on the new additions to the database. Premium subscribers also receive access to the Propel Turnover & Profits Blue Book and the UK Food and Beverage Franchisor Database. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription. Subscribers also receive access to Propel’s library of Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out; regular video content and regular exclusive columns from Propel group editor Mark Wingett.

New Scottish first minister can ‘reset relationship’ with hospitality: UKHospitality Scotland is urging the three candidates for SNP leader and first minister to re-engage with Scottish hospitality and unlock its economic potential. Following the confirmation of Kate Forbes, Ash Regan and Humza Yousaf as the candidates to succeed Nicola Sturgeon, UKHospitality Scotland executive director Leon Thompson has highlighted the opportunity to build a genuine partnership with Scottish hospitality, for the benefit of the economy. He said: “Scottish hospitality is at the heart of our economy, whether that be the 200,000 people it employs, the £9bn it delivers to the economy or the millions of visitors it attracts each year. Those figures are just the tip of the iceberg of what our sector can deliver for Scotland, if the new first minister chooses to engage with business and reset the relationship with hospitality. At the moment, there is an overriding feeling that our sector is not being listened to or valued. Poorly designed initiatives like the deposit return scheme (DRS) will burden the industry with cost and regulation, with almost no benefit, and the proposals around alcohol promotion feel like a blunt instrument that will harm businesses, without achieving its desired health objectives. I would encourage all the candidates to speak with UKHospitality Scotland and its members to understand our concerns, and then take them on board into office. It’s not too late to learn from the mistakes that have been made with the business community and fix them, whether that’s fixing DRS or choosing not to introduce a flawed tourist tax that will damage Scotland as a leading visitor destination.”

Siriex – ‘if hospitality as an industry doesn’t do well, it’s going to have consequences for the whole of the UK’: Chef Fred Siriex, the TV personality and former Galvin at Windows general manager, has warned that “if hospitality as an industry doesn’t do well, it’s going to have consequences for the whole of the UK”. Siriex was speaking ahead of the launch of his new E4 show The Last Resort, which aims to train up 12 young, British hospitality hopefuls at a luxury hotel in the French Riviera. “It’s difficult for a lot of people, and you can see it every day,” he told The Guardian of cost pressures facing the sector. “Look at the official figures in terms of the number of places that are closing. If nothing changes, only a few good places are going to be able to produce the kind of experience that customers expect. The industry is going to go down. If hospitality as an industry doesn’t do well, it’s going to have consequences for the whole of the UK.” Siriex has more than done his bit for recruitment in the sector and trying to alter negative perception of working within it. His The Right Course programme transforms prison restaurants to replicate high street businesses, and he has run pop-up restaurants at his kids’ primary school, getting pupils involved in every aspect of the business from marketing to menu planning and service. But he said his new show highlights a lack of proper training for a sector that the government still treats as unskilled. “You can’t find people who are already trained up and know what they’re doing, you have to teach them from scratch,” he said. Siriex said while cultural differences have not helped with the recruitment crisis – with front of house roles respected in France but seen as stopgaps in the UK – Brexit was a major factor too. “We didn’t put anything in place to replace the people who were not going to come from the European Union,” he added. “Some 40 to 50% of manpower comes from Europe, so what’s going to happen? You can’t have a robot-led industry – it doesn’t work.”

Company News:

Gail’s looks to make drive-thru debut: Fast-growing bakery brand Gail’s plans to make its debut in the drive-thru category, after starting to look for suitable sites, Propel has learned. The circa 110-strong, Bain Capital-backed, business is working with property advisor Forty Group to secure suitable sites in London and the Home Counties, with a target of securing at least ten sites within the next 12 months. The brand is thought to be looking for sites that are between 2,000 and 4,000 square foot in size and can offer parking for at least 20 cars. It is thought the brand believes it can provide a strong alternative to normal occupiers in the increasingly competitive drive-thru market. The brand’s opening in Kensington Arcade at the end of last year has a takeaway focus, and Tom Molnar, co-founder and chief executive of Gail’s, told Propel in December that the business’ variety of formats allows it to take advantage of different property opportunities to support its expansion. He said: “We are first and foremost a bakery, so it’s about the kitchen, and then if we have space for seating, we will add it in. We are always experimenting with new formats as it allows us to take advantage of different real estate opportunities that present themselves.” Earlier this month, Gail’s made its debut site in the north west, in Wilmslow, Cheshire. Last month, the business confirmed it had lined up two further openings in the region – on the former White Stuff unit in Manchester’s King Street, and a unit in Shaw’s Road, Altrincham. Both are expected to open later this year. It has also submitted plans to convert the former La Boutique d’Or site in King Street, Knutsford.

London luxury gelato brand Snowflake launches £500,000 fundraise: London luxury gelato brand Snowflake is launching a crowdfunding campaign, to support its expansion plans. The company, which is led by Asad Khan and founded in 2012, currently operates nine sites, in London and Manchester, plus franchises in both Saudi Arabia and Qatar. It is looking to raise £500,000 through Crowdcube, offering 3.74% of equity, which gives a pre-money valuation of £12,873,363. The company said: “The global artisan ice cream market is $6.6bn with a forecast compound annual growth rate to be 6.9% by 2025. Premium ice cream is growing at a faster rate than value and at Snowflake, we are working to scoop up our share of this space. Our system-wide sales in 2022 grew by 92% in 2021 to £4m (October 2021 to October 2022). As we grow beyond London, to the north of the UK and continue our international expansion, we are excited to be on Crowdcube for the first time, raising funds to support our vision. Our investors will help us continue our expansion, invest in marketing and upgrade our in-store experience. We are also seeking to launch a dedicated innovation hub.” Following an opening in Jeddah, Saudi Arabia in 2021, Snowflake recently launched a store in Hamad international airport, Doha, Qatar. Snowflake currently operates six London sites – in Soho, Marble Arch, South Kensington, The O2 and Westfield White City and Stratford.

Frontier Pubs returns to the expansion trail: Frontier Pubs, the London-based partnership between Stonegate Group and the Karen Jones-led Pioneer Hospitality, has returned to the expansion trail with the acquisition of the leasehold interest of two pubs, Propel has learned. The business has acquired the Hare & Hounds in Leyton and The Cherry in Mile End. This takes the total number of Frontier pubs to 12, all situated in residential areas around London. Frontier is chaired by Jones, who is also the chair of Mowgli and Hawksmoor, with a management team headed up by Peter Myers and Jo Cumming, the team behind the successful growth and subsequent sale of Food & Fuel. Jones told Propel: “We are delighted to be welcoming these two lovely pubs into Frontier. Frontier is trading strongly against pre-pandemic levels and it’s great to be in expansion mode once again.”

Taro eyes regional expansion play: Taro, the Japanese restaurant group, which recently opened its sixth site in London, is looking to explore possible openings in regional cities, alongside further expansion in the capital. The group, which was founded in 1999, recently took over the old Manze Pie & Mash shop in Walthamstow. A company spokesperson told Propel: “The expansion plan is to open more Taro sites in Greater London and in the future look to open outside of London, potentially in the Brighton, Bristol and Manchester areas.” The first Taro restaurant opened in Soho’s Brewer Street, with further sites subsequently opening in Balham, Kennington, Finchley and Pimlico. Known for its bento, donburi, fresh sushi and sashimi, Taro also serves up a plethora of hot bowls of udon and ramen, which are all cooked fresh to order.

Birmingham Indian street food concept to open 15th site next month, aims for 50 more ‘over next few years’: Birmingham Indian street food concept Karak Chaii will open its 15th site next month and said it is aiming to open 50 more locations “over the next few years”. The franchise brand’s 14th site was opened in The Parade, Leamington Spa, by Josh Sander earlier this month. Site number 15 will follow in Southall, west London, in March. Karak Chaii has three sites in its home town of Birmingham, with the latest there, in Coleshill Road, opening in January. It also has sites in Acton, Cardiff, Ealing, High Wycombe, Hounslow, Kingsbury, Luton, Neasden, Peterborough and Slough. Its website states a further site in Coventry is “coming soon”, with “a further 50 national and international sites set to open over the next few years”.

EL&N signs partnership to go into more travel locations, eyes Birmingham opening: Café and lifestyle brand EL&N has entered into a partnership with Lagardère Travel Retail, which has become its exclusive franchisee in travel locations. EL&N, which was founded in London in 2017 by Alexandra Miller, said it is adaptable to different formats. EL&N, which stands for Eat, Live, and Nourish, operates 25 stores across Europe and the Middle East including ten in London, six in Saudi Arabia and two in Kuwait. It also has stores in Paris, Milan, Doha, and Dubai. It said Lagardère will support its current travel retail outlets at London’s Heathrow airport and St Pancras station and help the cafe group explore opportunities in new markets. Miller said: “Over the past five years, we have successfully solidified our position within the food and beverage landscape as innovative market leaders, but now feels like the perfect timing for us to bring our offering to new territories within the travel retail environment. This is the beginning of a dream partnership with Lagardère and we look forward to working together with the team to tap into a new demographic for EL&N.” Lagardère Travel Retail European vice-president foodservice, Mélanie Guilldou, added: “The addition of EL&N to our portfolio is of great value in the travel retail environment, where travellers are constantly looking for concepts and offers that are unique and differentiating. This opens up a tremendous opportunity to appeal to new profiles of consumers.” Last week, EL&N, which made its UK regional debut in Scotland at the end of last year, confirmed it is to open a second site outside London, in Manchester. Propel revealed last month EL&N was set to take space in the city’s Circle Square development. It has now agreed a lease for a 2,150 square-foot site within the mall at Trafford Palazzo. Propel understands the brand is also eyeing its first opening in Birmingham, and is in talks to take a site in the city’s New Street/Bullring area.

Greene King builds Hickory’s pipeline: Brewer and retailer Greene King has begun building its pipeline of sites for conversion to the American-style smokehouse and barbecue Hickory’s Smokehouse brand, which it acquired last October. As previously revealed by Propel, the Nick Mackenzie-led business had chosen The High Park Pub & Grill in Bradley Road, Huddersfield, to become the 18th site under the Hickory’s brand. Propel understands a second Hickory’s conversion will be a current Hungry Horse site. It is understood Greene King is set to convert the Bonnie Prince pub in Chellaston, near Derby, to a Hickory’s this spring. Greene King acquired Hickory’s, which had been backed by private equity firm Piper, for an undisclosed sum. It said at the time that it saw the potential to grow Hickory’s into a national dining brand and the investment underpinned the company’s strategy of growing its reach through “compelling brands and unlocking value by making the most of each of its sites”. It was always thought that a good proportion of any conversions from Greene King’s existing estate would come from its Hungry Horse portfolio.

Tequila Mockingbird secures second West End site: South London bar operator Tequila Mockingbird has secured its second site in Covent Garden, Propel has learned. The seven-strong business has secured a site at 3-5 Burleigh Street, which runs between the Strand and Covent Garden. The group has taken a unit within the Strand Palace Hotel, which was once known as The Nook Sports Bar. The site, which is due to open mid-March, is approximately 2,500 square foot on the ground floor, and the company has obtained a new 1am licence for six days a week. The business, which was founded in 2015 by cousins Jonathan Bas and Jake Bas told Propel it was looking at options with regard to external funding or investment to fuel its expansion, as it saw turnover break the £5m mark for the year to the end of 2022. He said: “We are currently in negotiation on a number of new sites to widen our London presence this year and are now looking at options with regard to external funding or investment to fuel our expansion both locally in 2023, and nationally from 2024 onwards.”

Several directors of West Sussex brewery Bedlam acquire brand out of administration: Several directors of West Sussex brewery Bedlam have acquired the brand out of administration in a pre-pack deal. Bedlam was placed into administration on 17 February, ending its almost 11-year history. Despite sales in 2022 up 40% versus 2021, the business estimated some 18 months’ worth of revenue has been lost since March 2020 as a result of the pandemic and more recently the cost-of-living crisis. The company stated: “In the current challenging climate, our customers understandably have less to spend on discretionary items such as beer in pubs and/or at home so are drawn to the unfairly low-priced products on offer in supermarkets that are able to subsidise sales through other parts of their businesses. In addition, input costs have increased materially over the last 12 months, including ingredients, packaging and utilities, all of which have conspired to decimate the company’s finances.” Based on a list maintained by Beer Nouveau, Bedlam was the 95th small craft brewery to close since the start of 2022. Following a rigorous sales process, a new company, Renatus Brewing, owned by several of Bedlam’s directors, has acquired the Bedlam brand and all the current stock. It said this would ensure continuity of supply and retention of key personnel, “albeit with a skeleton team in the near term”. It added: “We are optimistic any disruption will be minimal to our customers. We are determined to continue to produce our fabulous beer and service our loyal customers. Watch this space, our story is not over yet, it is just the end of this chapter.”

Team behind Asian street food brand Chi opens permanent Bird Haus site: The team behind Asian street food brand Chi has opened a permanent site under its fried chicken concept Bird Haus. After being available as a virtual brand through Deliveroo in the Cambridge and Norwich areas, the business has opened the first restaurant under the concept in the Beacon Centre, Eastbourne, where it already operates a Chi site. The concept offers a range of dishes including its speciality dish of buttermilk-fried chicken. Vegetarian and vegan options are covered, and there’s a “something different menu” of dishes such as cajun shrimp Po-Boys and quesadillas. Owner Lamen Reddy said: “The feedback has been great and it has prompted us to take the next big step and open a restaurant. We think our plucky easy-going concept fits in perfectly with the local culture and we look forward to getting involved with the local community.” Asian street food concept Chi plans to grow to 20 sites by 2025. The business is the brainchild of Aidan Tjinakiet and Reddy. The eight-strong business made its debut in London, with an opening on the ex-Ichiryu unit in New Oxford Street, last year. The company currently operates four sites under its larger restaurant format – in Eastbourne, Huntingdon, Rushden Lakes and London. It also operates four sites under its smaller grab-and-go format – in Basingstoke, Cambridge, Norwich and Watford. Chi was launched at The Grafton shopping centre in Cambridge in March 2019, with a second site opening at Intu Watford in December of that year. The concept offers “Asian street food with a modern twist served on a base of bao, banh mi, noodles or rice with a wide range of snacks and sides”.

Irish hospitality group Press Up set to expand The Dean hotel brand to UK: Irish hospitality group Press Up is set to expand its The Dean hotel brand to the UK. The group – whose growing estate of more than 65 venues includes The Dean, Stella Cinema, Elephant & Castle, Glasson Lakehouse, Wowburger and The Mayson – plans to open The Dean hotels in Belfast, in 2023, and Birmingham, in 2024. The Dean is a boutique hotel brand that also has locations in Cork, Dublin and Galway, with Belfast set to be its first Northern Ireland site and Birmingham its first in England. Before that, the group will later this month open an extension to its The Dean Dublin site, adding 49 bedrooms as well as a new cocktail bar and lounge, outdoor courtyard and dedicated events space. Called The Dean Townhouse, it will be located next to the original The Dean Dublin site at 36 Harcourt Street. Established in 2009, Press Up’s portfolio includes restaurants, bars, hotels, and high-end cinemas – mainly across Ireland and more recently the UK, with the opening of two restaurants in Doncaster.

Suffolk hotel group pays back CBILS loan following improved trading and profitability: Suffolk hotel group Gough Hotels has paid back its loan through the Coronavirus Business Interruption Loan Scheme (CBILS) following improved trading and profitability, as it reported turnover passing pre-pandemic levels. The group, which has been run by the Gough family for almost 60 years, operates The Angel Hotel in Bury St Edmunds, Salthouse Harbour Hotel in Ipswich and Southwold Pier in Southwold. It reported turnover of £10,659,891 for the year ending 31 October 2022 compared with £6,763,604 in 2021 and £9,273,642 in the last full year before the pandemic (ending 31 October 2019). Of this, £8,532,952 came from the hotels (2021: £5,278,913) and £2,126,939 from the pier (2021: £6,763,604). Pre-tax profits dropped from £1,231,153 in 2021 to £975,901. Dividends of £594,789 were paid (2021: £166,270) and the company received £45,760 in government grants (2021: £968,680). In his report accompanying the accounts, director Richard Gough said: “The directors consider the group’s performance for the year to be encouraging given the difficulties endured during the recent pandemic and nationwide lockdowns. The reduced VAT rate of 12.5%, which lasted to March 2022, was a major factor in supporting the business through that period. Revenue remained strong for the rest of the year due to pent-up demand and the desire for people to take holidays. The difficulties in travelling abroad undoubtedly helped. Improved trading and profitability meant the directors were able to repay the CBILS loan and invest significantly in the business. The hospitality sector remains a tough place to trade, with margins under pressure, but the directors remain confident of the group’s performance in the immediate future. The directors consider that in the forthcoming year, turnover levels will increase as customers look towards shorter, quality UK breaks. Repeat business is improving and the spend at the hotels for food and drink is higher. There is also a noticeable increase in non-resident trade. With the pandemic largely in the past, there is a marked pick up in corporate business. The directors will continue to invest in refurbishment of all three businesses as part of their ongoing commitment to growing profitability.”

Gousto slashes jobs and curbs hiring plans: Gousto, the meal-kit delivery service, has slashed its workforce and taken an axe to its ambitious hiring plans. Sky News reported Gousto, which is backed by celebrity fitness instructor Joe Wicks, has cut 14% of its headcount in recent months. A person close to Gousto said the redundancy round equated to fewer than 100 employees, implying that its announcement in 2020 that it would create 1,000 jobs by the end of 2022 had failed to bear fruit. A Gousto spokesman said the affected staff had all left the business by the end of last year. Earlier this month, it was revealed Gousto had sharply cut its valuation after raising £50m in additional funding to steer it through a volatile economic period. The funding round has not yet been announced but took place at a “significant” discount to the $1.7bn valuation at which the company raised funds just over a year ago, insiders said.

Edinburgh launch for new Turkish-style restaurant concept: A new Turkish-style restaurant concept will launch in Edinburgh this week. Shish is set to open in Newington, on the south side of the city, with an ethos centred around the fire hearth, “where cooking and families come together and share in the occasion”. Menu highlights include karisik izgara – a traditional mixed grill platter with chargrilled lamb and chicken, lamb ribs, chicken thigh, meatballs and adana kebab; kafes – whole racks of lamb, carved and served at the table; and levrek – grilled marinated seabass served with olives, capers and asparagus. There will also be a selection of non-alcoholic drinks, including a range of house-made mocktails. Founder Itz Humayun said: “We cannot wait to open and share with the local community our love for Turkish cuisine and what it means to us. We won’t have an alcohol licence, but instead an interesting and diverse non-alcoholic drinks list that might even change people’s perception of having a drink. My business partner Afzal Boskh and I bring to Edinburgh a wealth of industry experience and expertise, and we’re excited to share our combined knowledge and passion, in Scotland’s culinary capital.”

PPHE Hotel Group opens art’otel London Battersea Power Station, offering ‘immersive interior décor experience’: PPHE Hotel Group has opened its new art’otel London Battersea Power Station, offering guests an “immersive interior décor experience”. It has partnered with Spanish artist-designer, Jaime Hayon, for a “one-of-a-kind hotel experience that fuses art, design and hospitality”. Hayon has designed everything from the suites, spa and public art gallery (situated within the Tozi Grand Cafe) right down to the light fittings, creating “a unique identity for the hotel”, which blends “unique interior design with an eclectic collection of paintings, prints, photography, sculptures and tapestry throughout”. Hayon said his vision for art’otel Battersea was inspired by the power station’s history and heritage, as well as its future at the centre of a new cultural district for London. To find out about the art and design, guests can request a guided tour during their stay or download the art’otel “wonderpass” to explore each piece of art. The venue also features JOIA, an Iberian skyline restaurant and bar from Portuguese chef, Henrique Sá Pessoa.

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