Itsu to receive £4.3m of new funding and begin operational turnaround plan if CVA approved: Itsu, the healthy Asian food chain created by Pret A Manger co-founder Julian Metcalfe, is to receive £4.3m of new funding and begin an operational turnaround plan if its company voluntary arrangement (CVA) proposals are approved, Propel has learned. It’s understood Itsu’s shareholders, which include Ambrosia Investments, have provided a letter of comfort to the company confirming their intention to support an additional funding need of up to £4.3m should it not be successful in obtaining this financing from an external source prior to the funding need arising. However, this additional funding is conditional on approval of the CVA proposal. If the additional funding isn’t made available, this would leave the company with a substantial funding deficit and no ability to address that. The CVA proposal document states: “The directors are firmly of the view the company has now exhausted all solvent options available to it and, unless the CVA is approved, it will be likely to file for administration or liquidation. The proposed restructuring terms in the CVA provide the only bridge to a sustainable and profitable future for the company.” As part of the proposals the company and its adviser AlixPartners have carried out an assessment of the company’s property portfolio and divided the sites into six main categories, with each category of lease affected differently pursuant to the terms of the CVA. Category A comprises 19 sites, which are already on sustainable rent terms. Category B comprises the group’s two airport concessions at Gatwick and Heathrow. Category C comprises 46 sites, which will move to turnover rent under the proposals at 9% up to £950,000 of yearly store turnover and 10% on additional yearly turnover, with a rent “top-up” every six months during a “rent concession period”. Sites demised under Category C leases are listed as core sites to the business the directors consider could trade profitably in the period while the business recovers from covid-19. Category D comprises 9 sites that made little or no profit before the covid-19 outbreak but which the company believes could be made profitable if rent is adjusted to a suitable level. Category E comprises five sites – Chancery Lane, Lime Street, Ludgate Hill, Old Broad Street and Sackville Street, which were trading at a loss, are close to expiry or are wholly sub-let and which the company wishes to exit as part of the CVA. Finally, there are also two non-trading premises leases in a final category. Until now, Itsu has been mainly funded through equity rather than debt, with shareholders who have never taken dividends out of the business. Shareholders have invested £40m into the company during the past four years and it has predominantly had relatively low levels of external bank debt. The business plans to open the majority of its estate in September as expectations of London footfall begin to increase, albeit from a very low base. Itsu currently has 15 stores open, with trading said to be at low levels compared with 2019 sales. Certain stores that geographically benefit from lock-down and those with strong delivery catchment areas are showing “slightly stronger” signs of trade. The CVA meeting will be held on Wednesday, 19 August.
TRG offered £1.6m to buy back five Food & Fuel sites out of administration: The Restaurant Group (TRG) offered £1.6m to buy back five sites from the 11-strong Food & Fuel business, which was placed into administration in March, Propel has learned. On 24 April this year TRG exchanged on a deal for Coco Momo sites in Marylebone and Kensington, The Queens in Crouch End, The Roebuck in Chiswick and The Queens Arms in Pimlico, with completion due to have taken place by 12 June. In June, Propel revealed London pub operator Market Taverns had acquired another four sites from the former Food & Fuel estate – The Sporting Page in Chelsea, The Queens Head in Holborn, The Lots Road Pub & Dining Room in Chelsea, and The Prince Of Wales in Putney. In the administrators report, a consideration of £200,000 was received from Market Taverns and a deal for The Lots Road Pub & Dining Room, The Prince Of Wales and The Sporting Page was completed in May. It is envisaged a sale of The Queen’s Head will be completed shortly. Of the two remaining pubs placed into administration, The Duke in Richmond and The Grosvenor in Hanwell have been taken back by their respective landlords. The Steam Packet in Chiswick wasn’t included in the administration but transferred to TRG’s gastro-pub brand Brunning & Price. Administrator RSM said multiple parties submitted offers in respect of each site. Food & Fuel’s turnover in the year to May 2019 was £11.74m, with a pre-tax loss of £3.74m. For the seven months to the end of last year, its turnover stood at £6.37m, with a pre-tax loss of £1.9m. RSM said the property, plant and equipment across the 11 pubs had a net book value of £2.41m. TRG acquired the then 11-strong Food & Fuel in September 2018 for £14.9m.
BrunchCo paid £500,000 for bulk of Le Pain Quotidien UK: BrunchCo paid £500,000 to acquire 15 of Le Pain Quotidien’s 26 UK sites through a pre-pack administration, Propel has learned. The new company, a subsidiary of Belgium-based investment firm Cobepa, the chain’s existing backer, acquired the bulk of the Le Pain Quotidien UK business in June. The move saw Steven Whibley, who was managing director of the brand at the turn of the decade, return to the role. In April, Propel revealed an emergency sales process for the UK business had been launched, with Alvarez & Marsal overseeing the auction. This process generated 11 offers for the business, five were for the shares of the company (solvent offers) and six for some or all of the business and assets of the company (insolvent offers). The solvent offers ranged from £1 to £2.1m, while the insolvent ones ranged from £450,000 to £2.4m, all with a number of conditions including a new licensing agreement from the parent company. However, the solvent options were seen as unachievable and all the insolvent offers as challenging in “some regard”, including a requirement for the parent company to provide a licence to use the Le Pain Quotidien brand, which it had indicated it was unwilling to do in respect of some of the bidders. Following the progression of a restructuring of the parent company on 1 June, it subsequently submitted an offer, which was concluded provided the best outcome for the company’s creditors as a whole. Prior to March, Le Pain Quotidien UK was funded through a group-wide cash pooling arrangement managed by the parent company. As at 31 December 2019, the company’s accounts showed an operating loss of £3.3m (2018: £0.6m loss). On 2 April 2020, the parent company informed Le Pain Quotidien UK it did not intend to provide it with further financial support beyond a loan of $1m (circa £800,000). This loan was provided to pay critical expenses, including employees’ salaries and wages in March, while the company considered the restructuring options available to it. On 6 April, the company was presented with a statutory demand for £34,500 and a final demand on 9 April for £213,391, which it was unable to settle. Last month, Whibley told Propel the company was in talks about taking on a further three of the brand’s London sites. Whibley said: “At present, we’re planning a staged reopening from August.” Whibley said the group would spend six to nine months looking to put in foundations to revitalise the brand and look to open a new site in 2021 before embarking on an expansion strategy of opening three to four sites a year from 2022.
Franco Manca operator raises £2.25m in oversubscribed share placing: Fulham Shore, operator of Franco Manca and The Real Greek, has raised £2.25m in a share placing that was oversubscribed. A total of 36 million new ordinary shares have been issued at a price of 6.25p. The new shares represent about 5.91% of the issued share capital and total voting rights of the company. Directors of the company subscribed to new shares as part of the placing, including managing director Nabil Mankarious, who acquired almost three million shares; chairman David Page, who bought more than 2.2 million shares; and finance director Nick Wong, who acquired more than two million shares. Page said: “We are pleased to have concluded the fund-raise, which was oversubscribed, at a premium to the previous day’s closing share price. This raise, along with our new bank facilities, places us on a sound financial footing.” On Thursday (6 August) Fulham Shore revealed it had entered into a new £10.75m debt facility and agreed new terms for its existing £15m banking facilities. The company said it had traded at 72% of last year’s level since reopening after lock-down. Meanwhile, Fulham Shore will reopen its The Real Greek site in Reading on Saturday (8 August), meaning 15 of the brand’s 18 restaurants will have reopened.
PizzaExpress to reopen 63 restaurants next week taking total to more than 300: PizzaExpress is to reopen 63 restaurants on Thursday, 13 August, taking the total to have reopened to more than 300. The company, which this week revealed plans for a major restructuring that could see 67 sites shut permanently, said the move follows the successful phased reopening of dine-in, delivery and click-and-collect services at selected pizzerias from last month. The latest sites reopening will include Cheltenham, Haywards Heath, Northampton and Worcester. Social distancing measures at reopened sites include a physically distanced layout, hand-sanitiser stations, heightened hygiene procedures and cleaning measures, along with regular health checks of team members. There is also a new online booking service, a new digital menu and cashless payment. PizzaExpress managing director Zoe Bowley said: “The initial signs from the restaurants that have already reopened have been very encouraging and we’re delighted to be welcoming even more customers back into our restaurants. The response to our online booking system, new digital menus and cashless payments has been fantastic, and we continue to encourage everyone to use these services as much as possible as their local restaurant reopens. We are very grateful for the way our customers have embraced our new procedures.” All PizzaExpress’ reopened restaurants are taking part in the government’s Eat Out To Help Out scheme this month. As well as the major restructuring, PizzaExpress said it had also hired advisers from Lazard to lead a sales process for the business.
Megan’s to launch first site outside London, in St Albans: London-based cafe and deli concept Megan’s is to open its first site outside London, in the former Jamie’s Italian in St Albans, Hertfordshire, Propel has learned. Megan’s head of people Fernanda Antonio said: “We are excited to be able to extend our Megan’s family with our first out-of-London location. We will create 30 jobs in St Albans and are looking for ambitious managers, chefs and waitresses who have that Megan’s magic.” The company, owned by Tossed founder Vincent McKevitt, operates eight venues in the capital – in Balham, Battersea, Clapham, Fulham, High Street Kensington, Islington, Parsons Green and Wimbledon.
Greene King to install electric vehicle charging points across pub estate: Brewer and retailer Greene King is to install electric vehicle charging points in all suitable sites across its 2,700 managed and tenanted pubs. The initial phase will see installation of chargers in 900 of Greene King’s managed pubs within the next 12 months as part of the company’s commitment to support greener thinking and its sustainability strategy. The Churchill in Royal Wootton Bassett, Wiltshire, has become the first Greene King pub to offer electric vehicle charging points. Tony Hodgson, head of estates at Greene King, said: “We have been working hard to develop our sustainability plans as we continue to build a greener business. With more people buying electric cars in a bid to be more environmentally friendly, we want to support our customers who come to dine or stay with us by offering electric charging ports in those of our pubs that are able to do so.”
Estabulo Rodizio Bar and Grill secures site at York shopping centre as owner shifts focus from national to regional operators: Yorkshire-based Brazilian restaurant Estabulo Rodizio Bar and Grill has secured a site in York. The company has agreed a deal to open at Vangarde Shopping Park in premises previously occupied by Boparan Restaurant Group-owned brand Giraffe. The letting is part of a shift by Vangarde to move away from national chains towards a diversified offering of leisure, retail and regional restaurant operators in response to “changing demand and difficult trading conditions”. The restaurant will be Estabulo Rodizio Bar and Grill’s eighth venue following its launch in Beverley, East Yorkshire, in 2016. The concept specialises in cuts of meat that are skewered and cooked over an open flame. Customers pay a fixed price and use a two-sided disc to control the pace of their meal. The green side indicates to the waiter to serve more meat, while the red side indicates a pause. To help with the change of direction, Vangarde has brought in Hartnell Taylor Cook and Emanuel Oliver to join existing agent Lawrence Hannah, which secured Estabulo Rodizio Bar and Grill. Lawrence Hannah director Miles Lawrence told The Business Desk: “The food and drinks market is moving away from national chains and regional operators now represent by far the most exciting options for landlords. With this in mind we were delighted to secure Estabulo, which us well loved throughout the region and brings a whole new flavour to the scheme.”
Lollipop to open French-inspired venue in Chelsea as it puts plans for concept based around cooking at home on hold: Immersive hospitality group Lollipop is to open a French-inspired venue in Chelsea after putting plans to launch a concept built around the nation falling back in love with cooking at home on hold. The group, founded by Sebastian Lyall, was aiming to launch Kitchen Storey in King’s Road, which would see diners cook part of their own meal. However, Lyall told Propel the fact destination trade is struggling because people aren’t coming into London or are unwilling to travel across the capital, had led him to pivot Kitchen Story into Jolie. He hopes Kitchen Storey will now launch in the winter. Set to open on Friday, 28 August as part of Lollipop’s Chelsea Funhouse venue, Jolie is described as a crossover between a restaurant and cocktail lounge. It will serve sharing plates inspired by the different regions of France, including its signature smoked cote du boeuf, and bottomless cheese fondue. The cocktail list takes inspiration from the smells and scents of different regions in France, including the Versailles – a champagne-based cocktail with homemade caramel peach cognac and vanilla gold spray. Lyall said: “We believe restaurants are more than just about eating, they’ve become places for people to socialise and continue their night after their dinner. With restrictions on travel and people wanting to stay in a venue for the whole evening, we think this new dining experience comes at the right time.” Lollipop, which Lyall founded in 2015, has a number of restaurants in London and Paris. It was also behind nude restaurant The Bunyadi, which Lyall hopes to bring back as a permanent site, and a pop-up owl cafe.
Ennismore to start expansion of Tandoor Chop House concept with Notting Hill site, introduces ‘tacos’ offer: Glenagles owner Ennismore is to start expansion of Tandoor Chop House, its concept inspired by the communal eateries of Northern India and the classic British chop house. Ennismore launched Tandoor Chop House in Adelaide Street, Covent Garden, in 2017. Now it will open a venue in Notting Hill on Wednesday, 12 August featuring a new Tandoor Tacos menu alongside the regular Tandoor Chop House offering. The venue in Uxbridge Street will initially operate from 5pm to 10pm, Wednesday to Sunday, for dinner only. It will offer a menu of small plates such as bhaji onion rings with smoked aubergine raita, and dishes from the tandoor oven such the signature house tandoor chicken. The Tandoor Chop House Mighty Thali – a “mix of the best bits” on the menu – will be on offer for groups of two to three to share. Tandoor Tacos will be available to eat in and feature paratha bread filled with a combination of Indian and Mexican flavours, spices and pickles. The five paratha tacos include The Jack Route (jackfruit tikka, charred aubergine raita, pickled carrot, swede and red onion). Both menus will be available for delivery via Deliveroo. When Ennismore launched the concept, then head of restaurants Graham Hall, who is now a director of Drake & Morgan, told Propel: “It’s a simple but good offer. It’s ideal for lunch and for pre-theatre dining, hence the Covent Garden location, with a selection of plates to share as well as individual dishes. We’re looking to roll it out over the next couple of years.”
LGH warns about 1,500 staff at risk of redundancy: About 1,500 staff at hotels managed by LGH in England and Scotland have been told they are at risk of redundancy because of the coronavirus crisis. LGH, which manages 55 properties, including some Crowne Plaza, Holiday Inn and Hallmark hotels, said the staff were in a consultation period. LGH manages about 2,500 staff on behalf of hotels, many of which are franchised. Joanne Monk, group people and development director at LGH, said no hard and fast decisions had been made about how many jobs would be cut. However, she said LGH’s hotels were being run on skeleton staff at the moment, which was likely to continue. Monk said because of the effects of coronavirus on the hotel industry and the economy as a whole, it was likely that only a small number of staff out of those who were made redundant would be able to be redeployed within LGH hotels. However, she added some staff may be retained on casual contracts. The majority of staff at risk of redundancy are operational – such as chefs, bar staff, front-of-house workers and cleaners – although LGH-managed staff are also at risk across the board. The “central staff” – that is, higher management within the firm – are also at risk, Monk said. She added the winding down of the government’s job retention scheme from the beginning of August was a factor in the timing of the consultation but the main reason the firm had warned staff about the risk of redundancy was it didn’t expect demand to pick up within the next year, Monk added.
Butchies to launch at former VQ site in Clapham next week: London-based chicken sandwich concept Butchies is to launch a site in Clapham on Tuesday (11 August). As revealed by Propel last month the concept, which was founded by Garrett Fitzgerald in 2013, has secured the former VQ takeaway site at 122 Clapham High Street. The grab-and-go site will have a 4am licence and offer Butchies’ all-day menu, which includes six fried chicken sandwiches in soft butter-toasted buns alongside buffalo wings, buttermilk chicken tenders and popcorn chicken. Butchies has also launched its first children’s meal, which includes six pieces of popcorn chicken, house barbecue sauce, small fries, and a blackcurrant and raspberry juice from Pip Organic. The company, which is chaired by Draft House founder Charlie McVeigh, has two other sites, in Shoreditch and Fulham (Market Halls), and also operates a dark kitchen in King’s Cross. However, when the Clapham grab-and-go site opens the company will close its unit at the Foodstars kitchen in Battersea. Fitzgerald said: “At the beginning of lock-down we launched a delivery-only kitchen in Battersea, which has been a huge success for us. We are super excited to migrate that kitchen to Clapham High Street, which allows us to continue serving all our delivery customers as well as allowing us to serve the beautiful people of Clapham in the flesh.” Kit Alexander, at Etch, acted for VQ.
Administrators dealing with Exchange Hotel in Cardiff resign after concluding property is ‘unsaleable’: Administrators dealing with the company behind the Exchange Hotel in Cardiff have resigned from their position having concluded the hotel is “unsaleable”. The move leaves the future of the Cardiff hotel and the millions of pounds still owed to creditors in limbo as official receivers or a potential liquidator will now take over, despite assurances from the hotel operator it would reopen within weeks. Kelly Burton and Lisa Hogg, joint administrators at Wilson Fields, have stepped down saying they would be unable to recoup monies owed. The announcement comes days after the Exchange Hotel posted on social media saying a reopening was imminent and the hotel was no longer part of Signature Living. Signature Living Coal Exchange, which owns the freehold to the historic Coal Exchange building, went into administration on 6 May owing at least £25m and with just £17 in the bank. A statement from Wilson Field said: “The former joint administrators resigned from their position due to funding for the holdings costs associated to the company’s principal asset, namely the Exchange Hotel in Cardiff, being withdrawn. This meant the former joint administrators would be unable to achieve the statutory purpose of administration.” Despite the building’s owners going into administration, the separate operating company that runs the hotel on a day-to-day basis, The Exchange Hotel Cardiff Ops, was unaffected. The operation of the hotel business itself is still considered viable. Eden Grove Properties, a company with a registered address in Cwmbran, has applied to renew the Exchange Hotel’s premises licence, which had lapsed while the hotel was closed during lock-down. Wilson Fields confirmed it hadn’t reached an agreement with any party regarding the sale of the hotel or had allowed any party to trade the hotel.
Steve Drake reopens Michelin-starred restaurant Sorrel: Chef patron Steve Drake has reopened his Michelin-starred restaurant Sorrel. Drake opened the venue in Dorking, Surrey, in 2017 with the venue awarded a Michelin star in 2019, which it has retained as well as four AA Rosettes. The restaurant features new safety measures including a one-way system to help guest flow, bookings for a maximum of two households (including support bubbles) up to a table of ten, staggered bookings and hand sanitiser available at the entrance and throughout the building. Members of staff have been appointed to oversee the new procedures, while the number of tables have been reduced. Sorrell will also offer single-use menus.
C&C Group rebrands Irish business to Bulmers Ireland, launches online ordering platform and customer portal: Drinks company C&C Group has rebranded its Irish business. The move sees C&C Group combine its two main operating businesses, C&C Gleeson and Bulmers, under the unified trading name of Bulmers Ireland. A spokeswoman said: “Our objective is to better align our business units in Ireland under one corporate identity, which reflects the strength and standing of Bulmers, one of Ireland’s most iconic brands. The modernisation and simplification of our business model in Ireland will support our customer base and enhance our service. As we navigate the challenges of covid-19, we have listened to the changing needs of our customers. As those needs evolve, we aim to deliver solutions that add value for our customers and enhances the service we provide.” The company has also launched an online ordering platform and customer portal system entitled Bulmers Direct and an app to support the on-trade. The spokeswoman said: “To support the hospitality industry, we have launched the Local app and website, which aims to support pubs, clubs, restaurants and bars looking to offer delivery or collection services but with no technology solution. Transaction fees of 2% per order will be reinvested into Local, with any excess income generated during 2020 donated to healthcare charities across Ireland.” Last month C&C Group appointed David Forde as group chief executive. Forde will join from Heineken, where he has been managing director of Heineken UK for seven years, at the latest in early 2021.