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Fri 3rd Nov 2017 - Propel Friday News Briefing

Story of the Day:

Burning Night Group embarks on £2m fund-raise to launch new sports concept, identifies four sites: Bar company Burning Night Group is to embark on a fund-raise on crowdfunding platform Crowdcube to launch a new sports-themed concept – Sportskeller. A Burning Night Group spokesman told Propel the company had already identified four sites for the new concept and was looking to raise up to £2m in the campaign with a minimum target of £750,000 in return for an equity stake of 3.61%. The company operates six sites under The Bierkeller Entertainment Complex banner, which house three concepts under one roof – Bierkeller Bavarian bar, sports bar Shooters and Around the World. Sportskeller will unite some of the most popular elements of the Bierkeller and Shooters brands – the long bench seating and Bavarian stompers show, which drive Bierkeller’s lively atmosphere on weekend nights, and midweek highlights from Shooters such as Champions League football and student specials such as Sportskeller’s Got Talent. The company said it had already identified four potential Sportskeller sites and is launching the crowdfunding campaign to roll out the concept into towns and cities smaller than those that house the full Bierkeller Entertainment Complexes. Burning Night Group chief executive Allan Harper said: “Our bars are thriving so we are ambitious to expand further and we already have several sites in excellent locations earmarked for development. Our existing bars are consistently busy and we know our customers love what the Bierkeller Entertainment Complex has to offer – that’s why we want to give them and potential customers the chance to get involved at the beginning of our newest brand.” Harper said the Sportskeller bars would focus on an area of the market where the company had a proven track record. He said: “Shooters is already hugely popular with fans wanting to watch big matches or title fights live on a giant screen. The atmosphere is always fantastic – it’s the next best thing to being at a stadium – so we want to recreate that but in a new and different way. Sportskeller will have a lot of features that people love about Bierkeller and Shooters combined – so it’s the best of both worlds.” Burning Night Group also locates, develops and manages Potting Shed and Fire Pit branded bars on behalf of the Potting Shed Group and will launch its latest concept, American-style barbecue restaurant Smokin’ Bar & Kitchen, in Leeds this month. It employs more than 500 people and had a turnover in 2016 of more than £17m.

Industry News:

Propel launches sector’s most comprehensive marketing conference: Propel has launched the most comprehensive marketing conference the sector has seen with a two-day event. Restaurant Marketer & Innovator, in partnership with Think Hospitality, will take place on Wednesday, 17 January and Thursday, 18 January at One Moorgate Place in London. The two-day event will bring together marketers, strategists and business leaders from the foodservice sector to understand trends, share success, and define the future of the sector. A total of 40 speakers from four countries, representing more than 30 brands, will provide advice and insight. The first day, curated and moderated by James Hacon, will include Dominic Smales (Gleam Futures), Professor Charles Spence (University of Oxford), Jozef Youssef (Kitchen Theory), Russell Danks (Futurist), Olivia Fitzgerald (Zonal), Lizzy Barber (Cabana), Stephanie Lloyd (New World Trading Company), Lisa Campbell (Las Iguanas), Jim Rogers (Tony Roma’s), Mark McCulloch (WE ARE Spectacular), Michael Ingemann (Claus Meyer Restaurants) and Ewan Turney (England Rugby). The second day, curated and moderated by Ann Elliott, will feature Emma Woods (Wagamama), Susan Martindale (Mitchells & Butlers), Katrina Lawson (Costa Coffee), Kathryn Austin (Pizza Hut Restaurants), Kate Eastwood (Revolution Bars Group), Luisa Fernandez (YO! Sushi), Mel Marriott (Darwin & Wallace), Helena Hudson (Real Eating Co), Pamela McNamara (Bluestone Wales), Tania Rahman (Chit Chat Chai), Laura Sheffield (Corazon), Celia Farrer (Eat Poke), Eve Bugler (BabaBoom), Hayley Simpson (The Breakfast Club), Camilla Katte (Giggling Squid) and Sarah Weir (Albion & East). Prices for the two days are £525 plus VAT for operators and £795 plus VAT for suppliers. A one-day rate of £345 plus VAT is available to operators only. To book, click here. For more information or any queries contact Jo Charity on 01444 810304 or jo.charity@propelinfo.com or Anne Steele on 01444 817691 or anne.steele@propelinfo.com

Novus opens Late Night London to all capital’s operators with social sharing and storytelling focus: Late Night London, the venue and events service within Novus, has opened its website for the first time in a decade to all bars, restaurants, pubs and clubs in the capital with a focus on social sharing and storytelling. Operators already listed on the new website include Casual Dining Group brand Belgo, The Breakfast Group, Camm & Hooper, ETM Group and the new Balham site from Simmons Bars. Operators are able to gain a shop window to more than 250,000 active users and more than 30,000 visitors per month. Novus said Late Night London would give venues a platform to increase brand awareness, engage with potential customers, and generate additional leads for their business. One new feature is an area on the listings page where operators can display their social media posts on an interactive “social wall”. Late Night London’s new proposition invites customers, social influencers and venues to blog, share stories and interact socially about their days and nights out in London. Novus customer experience director Simon Gaske said: “Our objective is very clear with the relaunch of Late Night London. We want to create the ultimate experience for London’s customers while also adding value to their visits. Our plan is to disrupt and turn traditional review websites on their head by creating a community mentality that encourages social sharing and storytelling – so a huge step away from how traditional review sites currently operate. We want real stories about real experiences written by real people.”

Kingston Council’s decision to dismiss late-night levy is victory for common sense, says ALMR: Kingston Council’s decision to dismiss proposals to introduce a late-night levy is a victory for common sense, the Association of Licensed Multiple Retailers (ALMR) has said. ALMR chief executive Kate Nicholls said: “Kingston Council has acted with pragmatism and common sense by dismissing a possible late-night levy in the area. It is a measure that would have only increased burdens on hard-pressed businesses and led to further closures without having an appreciable effect on any perceived areas of alcohol-related disorder. Other councils considering the measure would do well to follow Kingston’s example and avoid introducing a discredited measure that harms businesses.”

Company News:

Yum! Brands reports strong sales growth for KFC and Pizza Hut in the UK: Yum! Brands has reported strong sales growth for its KFC and Pizza Hut brands in the UK for the third quarter to 30 September 2017. Pizza Hut system sales in the UK grew 14% in the quarter and have increased 7% so far this year. The UK accounts for 5% of Pizza Hut’s system sales globally. Meanwhile, KFC system sales in the UK grew 9% in the quarter and have grown 7% so far this year. The UK accounts for 6% of KFC’s system sales worldwide. Globally, KFC like-for-like sales increased 4%, with US like-for-like sales flat – system sales worldwide increased 7%. Operating profit increased 14% to $260m, driven by refranchising and like-for-like sales growth. KFC opened 291 international restaurants in 51 countries, including 249 units in emerging markets during the period. Pizza Hut sales were up 3% globally, with like-for-likes increasing 1%. US system sales, which account for 48% of global sales, were down 1%. Pizza Hut opened 192 international restaurants in 47 countries during the period, including 144 units in emerging markets. Operating margin increased 7.2% driven by refranchising, partially offset by higher franchise and licence expense due to incremental advertising spend associated with the Transformation Agreement. Operating profit fell 1% to $82m. Taco Bell like-for-like sales increased 3% and system sales rose 6% while achieving a 21.9% restaurant margin. Operating profit grew 3% to $147m. Taco Bell opened 70 restaurants during the period. Yum! Brands’ total revenue in the quarter fell 5% to $1.44bn as it sold more restaurants to franchisees. It refranchised 209 restaurants – 72 KFC, 46 Pizza Hut and 91 Taco Bell sites – for gross proceeds of $395m. At the end of the quarter, Yum! Brands’ global franchise ownership mix increased to 95%. Chief executive Greg Creed said: “I am pleased to report another strong quarter, with 11% core operating profit growth and 22% earnings per share growth excluding special items, as a result of the continued focus on our four key growth drivers. We are maintaining our full-year 2017 guidance and remain on track with our multi-year transformation strategy. As we celebrate our first anniversary from the spin-off of Yum! China and our 20th anniversary as an independent company, I am proud of our accomplishments. I’m especially proud of our ability to leverage our culture to rapidly transform to a more focused, more franchised and more efficient company that delivers more growth to our shareholders.”

Arc Inspirations to step up openings programme as it looks to grow Banyan and Manahatta brands: Arc Inspirations managing director Anni Opong has told Propel the company plans to step up its openings programme as it looks to grow its Banyan Bar & Kitchen and Manahatta brands. The company will launch its seventh Banyan Bar & Kitchen this week, in Ilkley, having acquired a site that formerly housed Tasty brand Wildwood. It will be the company’s 16th site to date and Opong added it had two sites lined up for the beginning of next year – one Manahatta and one Banyan Bar & Kitchen. Opong said: “We intend to increase our number of openings to three-to-five sites a year. Our intention is to step up the growth of the business. Banyan and Manahatta are the two brands we’re focusing on but we would also like to start growing our sports bar concept, The Box, if the right opportunity comes up. It’s a very cost-efficient venue to run. It’s 80% wet and 20% dry and the concept is very focused.” Opong said expansion would be based on areas within a two-hour drive of Leeds and the company would try to build clusters of sites with its different brands. She added: “We are very hands-on – we want our area managers to visit their venues regularly to coach our teams so they need to be within a couple of hours’ reach ideally. Any acquisitions we do will be on a site-by-site basis.” Opong said current trading was mixed, with some of the sites performing “extremely well” while others were “more challenging”, but she remains very happy overall and thinks the company is outperforming the market. She added: “Despite the apparent fall in consumer confidence, we think that with the right location and right product there are still enough people out there to visit our venues and make them very successful.” Opong said the company had worked hard to manage costs and maximise sales with her motto being “every penny and every hour counts”. She added: “There are a lot of exciting things happening and we look forward to growing our business as well as our teams. It’s all about putting our people first and getting the best people in the right place at the right time.” 

Loungers considers moving into accommodation sector by adding rooms to Bedford site: Cafe brand Loungers, which is backed by Lion Capital, is considering diversifying its offering by adding rooms to its portfolio. The company has been given the go-ahead to transform the first floor of Albero Lounge in Bedford into accommodation, which would be its first site to offer rooms. It has been granted permission by Bedford Borough Council to add five en-suite rooms to the site, which is based in the Cowper Building in Riverside Square on the banks of the Great Ouse. Loungers launched Albero Lounge last month and the rooms proposed would support restaurant activity on the ground floor. A spokeswoman told Propel: “At this stage permission has been granted but it’s not something that is definitely going to happen. The company is keeping its options open.” Earlier this week Loungers, which also operates the Cosy Club brand, reported like-for-like sales increased 7.4% for the 24 weeks to 8 October. Chief executive Nick Collins told Propel the company’s continued growth was being volume-driven rather than price-led.

US-based grill sub sandwich concept Jon Smith Subs to make UK debut, plans up to 45 sites: US-based grill sub sandwich concept Jon Smith Subs has signed a franchise agreement to make its UK debut with plans for up to 45 sites in the next eight years. The first outlet, which is also its first internationally, will launch in Kingston, Surrey, early next year. Jon Smith Subs has partnered with United Franchise Group to fast-track its global expansion. The licence partner in the UK is Hasna Sheikh Ali, who currently owns and operates Pepe’s, a chicken franchise restaurant in Bournemouth. In addition to the Kingston site, Ali plans to open two additional Jon Smith Subs locations – in Bournemouth and Kensington High Street in west London – in the coming months. The move into the UK is part of a larger international expansion plan for the Jon Smith Subs brand, which until now has been wholly based in Florida. As well as 40 to 45 sites in the UK during the next eight years, other near-term international targets include Canada, France, Ireland, Germany, Singapore and the United Arab Emirates. Ali said: “I am honoured to be part of this major milestone for the brand and to help expand the Jon Smith Subs franchise internationally, starting in the UK.” Jon Smith Subs president Scott Stuck added: “We’ve been looking for strategic and savvy owner-operators to take Jon Smith Subs global, and Hasna is a great partner to lead that charge. We look forward to watching her succeed and the brand’s continued international growth.”

Wright Brothers to open fifth site, at Battersea Power Station in December: Wright Brothers, the oyster specialist and seafood wholesaler, will open its new site at Battersea Power Station in December for its fifth site in the capital. The company, founded by Ben Wright and Robin Hancock, will open a 150-cover restaurant at the development, which is undergoing a £9bn regeneration. The venue will open on Monday, 11 December and feature an open theatre-style kitchen complete with Josper charcoal oven, marble tables, an oyster display bar and bespoke leather banquette seating. There will also be a private dining room for up to 24 people and a riverside terrace with views of the power station. Wright Brothers Battersea will follow the group’s “sea to plate” ethos, offering high-quality sustainable seafood and shellfish. The menu will feature new additions alongside favourites such as Isle of Lewis langoustine, grilled prawns, and roast crab. Since founding their seafood wholesale business in 2002 and launching their first restaurant at Borough Market in 2005, Wright and Hancock have opened further venues in Soho, Spitalfields and South Kensington. The wholesale side of the business has moved from Borough Market to Billingsgate to aid the expansion of its operations across London.

Franchisee bids to bring Wimpy back to Shrewsbury after ten-year hiatus: Franchisee Ali Riza Akyuz has submitted plans to open a Wimpy site in Shrewsbury more than ten years after the burger brand’s previous two sites in the Shropshire town closed. Akyuz has applied to open the venue on the site of a former charity shop in Claremont Street next to Major’s clothing store, which is the oldest retail business in Shrewsbury having been established in 1874. Wimpy has closed many of its restaurants in recent years in the face of competition from McDonald’s and Burger King, with its number of UK sites dwindling to about 80. However, speaking earlier this week following its financial results for the six months ending 31 August 2017, Famous Brands, which operates Wimpy in the UK, said the business delivered a “satisfactory performance in sterling terms” while “new site prospecting is under way and discussions with existing franchise partners have been fruitful and augur well for growth prospects in the year ahead”. The Shrewsbury application comes less than a year after McDonald’s pulled out of the town. A spokesman for Wimpy UK told the Shropshire Star: “We would very much welcome the opportunity to open a new Wimpy in Shrewsbury.”

Cygnus launches £1.5m Swansea redevelopment featuring restaurants and distillery: Cygnus Investments has lanched its £1.5m Swansea redevelopment that features two restaurants and a gin distillery. The company has converted a site in York Street that used to house its rum bar concept Fancy a Rum? The complex features 96-cover “relaxed fine dining” bar and restaurant Juniper Place on the ground floor and Cuban-themed eaterie Old Havana on the first floor. The site also features the Cygnet Distillery, which is on view to diners and produces its own gin and rum from a hand-made, 300-litre copper still. Cygnus Investments director David Bellis told Wales Online: “It has been almost three years since we began this journey and it’s great to see everything come to fruition.” One-fifth of the development was funded by the Swansea city centre regeneration programme. Council leader Rob Stewart said: “It’s another example of the Team Swansea approach, where the public and private sectors are working more closely together than ever before for the benefit of the city.”

JD Wetherspoon lodges plans to add 39 bedrooms to St Austell pub: JD Wetherspoon has lodged plans to add 39 bedrooms to its pub in St Austell, Cornwall. The company has submitted an application to Cornwall Council to convert first-floor space at the Rann Wartha pub in Biddicks Court. It also wants to demolish former Conservative Club buildings next door, build a first-floor extension above the pub, and add a three-storey wing with new bedrooms. Wetherspoon said the development, which includes an enhanced garden area, would create 50 jobs. The application states: “The application combines the creation of new hotel bedrooms and an enhanced external garden area. Underused or undeveloped floor space is made available to be converted for use as hotel bedrooms, benefiting tourism and commerce within St Austell. The whole development will enhance existing buildings and bring others of little architectural merit into active commercial use.”

Good Food Society to launch Mediterranean concept Hovarda in Soho this month for third London site: The Good Food Society, led by Levent Büyükuğur and Sanjay Nandi, is to launch Mediterranean concept Hovarda this month for its third London site. Hovarda will open in Rupert Street, Soho, on Friday, 17 November and offer the company’s take on Aegean food including seafood dishes dictated by the catch of the day. The 5,670 square foot venue will also offer grilled dishes such as organic slow-roasted lamb with lamb’s-fat potatoes, oregano and lemon, while desserts will include spiced ice cream with honey and walnuts, Hot Dinners reports. As well as the 180-cover ground-floor restaurant, the venue will feature a 70-seater cocktail bar upstairs with offerings including the signature Hovarda (Yeni Raki, cinnamon, yogurt, brown sugar, Turkish honey, cardamom and espresso). The Good Food Society launched Turkish-style restaurant Yosma in Marylebone in summer 2016, while it opened Frescobaldi, a high-end Italian restaurant with the famed wine-making family, in Mayfair at the end of 2014.

Bright Hospitality Group acquires tenth hotel: Bright Hospitality Group has acquired Staindrop Lodge in Sheffield for its tenth site. The Greater Manchester-based, family-owned business acquired the 37-bedroom hotel in Chapeltown from David Slade and John Wigfield in a deal brokered by agent Fleurets. The venue was marketed off an asking price of £1.6m. The building dates to the early 19th century and was substantially extended in 2003. The hotel includes the 100-cover 1806 Brasserie restaurant while the hotel bar, Toms, can seat about 60 plus a further 28 seats in an adjoining conservatory. The hotel also offers conference facilities. Zishan Zaman, of Bright Hospitality Group, said: “Our hotels extend from the south west to the north of England and we are pleased to add Staindrop Lodge to our group.” Nick Thomas, of Fleurets, added: “Staindrop Lodge attracted a great deal of interest from individual and group buyers nationwide as well as overseas, demonstrating the strong demand for hotels we are currently experiencing.” Bright Hospitality Group acquired its first site in 2005, with its most recent acquisition the 42-bedroom Cheltenham Regency Hotel in Gloucestershire.

London-based Italian restaurant and bar concept La Tagliata launches Fitzrovia sister site: La Tagliata Wine Bar & Italian Kitchen in Spitalfields has started expansion by opening a sister site in Fitzrovia. The venue has opened in Grafton Way at a site formerly occupied by Sardinian restaurant Sardo and is larger than La Tagliata’s debut site. The restaurant specialises in traditional pasta dishes and small plates, while it features a 25-seater wine bar that offers a range of 50 Italian wines, Hot Dinners reports. The menu also features lamb skewers – a signature dish of the Abruzzo region – and, in homage to Sardo, the venue has taken on the restaurant’s signature dish, crab linguine. Tagliata, which means “cut” in Italian, was founded by Lorenzo Boldi and Carlo Palumbo.

Nottinghamshire-based Blue Monkey Brewery drops Southwell pub plan: Nottinghamshire-based Blue Monkey Brewery has dropped plans to convert a former bank in Southwell into its latest pub in the face of opposition. The company, based in the village of Giltbrook, applied to Newark and Sherwood District Council to convert the former NatWest bank branch in Church Street. Blue Monkey Brewery wanted to convert the banking hall into a pub and turn a large office at the rear into a restaurant. However, following opposition from neighbours as well as the town council, the company has withdrawn the application. Blue Monkey Brewery owner Trevor Vickers told the Newark Advertiser: “I can understand their objections and that is part of the reason I have withdrawn the application – it’s just one of those things. I thought what a great place it would be for a pub and restaurant. It got a lot of opposition and a lot of support but the opposing side were more vociferous.” Blue Monkey Brewery operates four pubs in the East Midlands – in Canning Circus, Arnold, Newark and Loughborough.

Hotel Chocolat to open shop+cafe site, in Eastbourne: Hotel Chocolat is to open the latest site for its shop+cafe format, in Eastbourne, East Sussex. The company will open the venue on Friday, 10 November in Terminus Road at a former Thorntons store that closed earlier this year. The new site will sell a range of chocolates and gifts as well as serving food and drinks in the Cocoa Bar Café. Chief executive Angus Thirlwell told the Eastbourne Herald: “Every one of our stores is designed to be a real sanctuary for our guests, which connects with the escapism of Hotel Chocolat. We go to great lengths to ensure they are restful, elegant places that are easy to navigate.” Hotel Chocolat has expanded the number of shops with cafes it operates to 16 and said it saw scope for many more when it announced its full-year results in September.

Hull-based operator opens second French restaurant, in Beverley: Hull-based operator Khaled Bouhenache has opened his second French restaurant, this time in Beverley. Bouhenache has launched Fleur De Lis in the Georgian Quarter having acquired the lease of the former Rolando’s restaurant site. The new venue, which seats 62 people, serves authentic French food, a range of French wine and specially selected French beers. It has Victorian-style decor with framed pictures of France on the walls, a wooden floor and a specially designed suspended ceiling. Bouhenache, who launched Cognac in Hull two years ago, told the Hull Daily Mail: “I have always seen Beverley as a place where I wanted to open a restaurant. It has a continental feel to it, which I have always admired. I have always respected all the other restaurants that operate in the town. I thought I could bring something that could complement and not compete.”

Goodbody – UK most likely to be the growth driver for Dalata from FY19: Goodbody leisure analyst Gavin Kelleher has said the UK is most likely to be the main growth driver for Irish hotel operator Dalata from FY19. Retaining its ‘Hold’ recommendation on the shares ahead of Dalata’s capital markets day on Tuesday (7 November), Kelleher said: “The group reported a good set of numbers in early September. We make small changes to our FY17 and FY18 Ebitda expectations. FY17 benefits from the slightly better revpar growth being shown year to date, while FY18 reduces slightly due to timing of openings and assumptions around some pre-opening costs. Incorporating the new depreciation guidance given with the first-half sees group adjusted earnings per share increase 10% in FY17 and 7% in FY18. At the capital markets day, the group will provide an overview of its operations in the UK and an update on its UK growth strategy. While only 23% of group profits at present, from FY19 onwards the UK is likely to become the main growth driver of the group. We continue to believe Dalata is a top-quality operator and the Dublin and regional Irish hotel markets should remain in good shape for the rest of this year. However, revpar growth in 2018 in its main markets is likely to be more muted due to falling UK visitor numbers to Ireland, potential for new supply to come on stream, and more difficult comparatives. We see limited scope for positive upside surprise and, for us, the valuation feels up with events at this stage. We retain our ‘Hold’ recommendation.”

Easyhotel launches Liverpool site: Easyhotel, the owner, developer and operator of “super budget” branded hotels, has launched its 78-bedroom venue in Liverpool. The upper floors of 47 Castle Street have been converted into the hotel, with the reception on the first floor and a restaurant operated by a third party on the ground floor. The hotel is within a three-minute walk of the Liverpool ONE shopping complex and ten minutes from the main train station. Easyhotel marketing manager Jorge Rodriguez said: “We are absolutely delighted to open our doors in Liverpool and look forward to providing our trademark welcoming, affordable foothold for visitors to this amazing city.” Easyhotel’s other five owned hotels are in London, Glasgow, Croydon, Birmingham and Manchester, with others due to open next year in Ipswich, Sheffield, Leeds and Barcelona, as well as a lease in Oxford subject to planning consent. The company also secured a freehold site in Cardiff last month. Easyhotel has a further 20 franchised hotels in Europe and Dubai totalling 1,750 rooms.

 
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