A relentless pursuit of consistency and quality has placed Côte at the forefront of the UK’s casual-dining sector and recently seen the business change hands in a c£250m deal. Mark Wingett talks to joint managing directors Harald Samuelsson and Alex Scrimgeour about how this ‘traditional’ concept is staying ahead of the game
Halfway through talking to Côte’s joint managing directors Harald Samuelsson and Alex Scrimgeour, there is one passage of conversation (below) that underlines why their French brasserie chain has proven so successful and running ahead of performance, and recently changed hands for the second time in 22 months.
So why, when everyone is looking at becoming more fast-casual or struggling to remain a ‘traditional’ casual-dining operation has Côte managed to stand out? Samuelsson says: “It has been a relentless focus on consistency.” Scrimegour interjects: “Consistency, quality and value.” Samuelsson adds: “Focusing on what it is all about when someone walks through the door of one of our sites. They want to eat something and have a good time, so let’s give them fantastic food and fantastic service.” Scrimgeour says: “How can we exceed their expectations when they come through that door? There is this relentless focus on those key things every day, week and year, which we believe will bear fruit.”
Combined strengths
This seamless relationship that has been 10 years in the making (or “for ever” as Scrimgeour quips) and takes in meeting at Strada, is the bedrock to Côte’s continued success.
Scrimgeour says: “There is not a lot we don’t know about each other. There is no cautious treading about what the direction of the business should be. We can pretty much predict each other’s reaction to situations. There hasn’t been a change in that since Côte launched.
“One of the strengths of the business is that we have highly complementary skill sets. That marriage of front (Samuelsson) and back of house (Scrimgeour)has worked really well. We are both deeply involved in all parts of the business, but having those different backgrounds in the separate sides has definitely been one of the things that we believe has made Côte so successful.”
That success has seen the business change hands for c£350m across two private equity deals in under two years, the most recent seeing BC Partners take over ownership of the brand from CBPE Capital. Scrimgeour: “CBPE, as an investor, was as good as it gets. They backed everything we wanted to do, they were supportive of the business plan and things that weren’t in the business plans, as long as we justified it. They had a good understanding of the business and didn’t pretend to be restaurateurs.”
Samuelsson adds: “They were realistic. They didn’t say that because we opened 10 to 12 sites before we bought you that we should now do 30 openings. They wanted sustained growth.”
Enter BC Partners and, while an early turnaround in ownership had been mooted, the speed of such a move took many in the industry by surprise. Not however, its managing directors.
Scrimgeour explains: “We were ahead of plan in terms of performance, which CBPE was delighted with. The market had moved. You go back two years and there was a lot more nervousness in the market, now there is more money in M&As and more people looking to invest. In our previous process, we were either a little too big for some people or a little too small for the traditional private equity players. We ended up growing into a sweet spot for BC. The early signs are that they will be as supportive as CBPE. There is this culture at present of private equity groups that want to back management teams to do their job.”
Samuelsson says: “It is also very simple. If you come up with a plan for the future and outperform that plan, they will be supportive and leave you to get on with it. If the business is going the other way, they have every right to be all over you like a rash, because it is their investment.”
Out of the shadows
In many people’s eyes, the CPBE deal allowed Samuelsson and Scrimgeour to step out of the shadow of Strada and Côte founders Andy Bassadone and Chris Benians, and also away from the backing of Richard Caring. The latest deal has further endorsed their abilities and the fact that Côte is their business.
Scrimgeour reveals: “It was always our business but, at that time, people didn’t really know that.”
Samuelsson adds: “As Alex says, it always was our business, but we didn’t ‘PR’ that fact. So there was that perception. For us, the past two years has been about doing the same things that we were doing before but now everybody sees the performance has continued with private equity backing and that perception has changed.”
Scrimgeour says: “It is a very easy parallel to draw between our progression and Scott and Roberto’s at Bill’s (joint managing directors of the Caring-backed chain, which counts Bassadone and Benians as directors). Harald and I both recognise the contribution that Andy and Chris made. The success of Côte is not about any one particular person, it is the sum total of a lot of talented people, who have all been in the right place at the right time and made various contributions to its success.
“I know Harald feels the same way as me, we couldn’t have better mentors, certainly in the Strada days. It got to the point where we were ready. When we did the deal with CBPE, we were ready to step out at that time to take the business on.”
Staff and store progression
That progression will see the company open its 70th site this month in Bishop’s Stortford. Scrimgeour points out that the work commissioned by BC Partners when the private equity firm did due diligence around the recent deal suggests that Côte could triple its presence in the UK, which would take it up to c200 sites.
He says: “When you grow your business you get more confident about where you think it will also work well. It’s given us more confidence that there are plenty of opportunities for further openings in the UK. But whatever we say now might change in three years’ time. The UK eating-out landscape is constantly changing and there will be places we might not consider now but we could open in the future and that’s the same for all our rivals.”
In line with that projected growth, the company is to enhance its efforts to improve staff retention levels with the launch of a dedicated training academy. Samuelsson says the company hopes the academy will “encapsulate the whole journey an employee can go on” with the business. He says: “Staff retention is a major focus of ours and that comes with welfare. Whether that is offering a meal per shift, which is a quite an attraction or working with fresh food in the kitchen, we are looking of ways to enhance the experience of working for Côte.
“We plot out a whole career path. At the end there will be NVQ certification.”
Scrimgeour says: “We have a whole layer of management developed from within. We probably have more area managers and area chefs on average per restaurant than most of our contemporaries.”
Although the group has had approaches about taking the brand overseas, with companies in the Middle East the most vocal, UK expansion remains key, along with the pair exploring M&A opportunities and a new concept. They are both tight-lipped about the final possibility, although an Italian-influenced format has been mooted. Scrimgeour says: “One way or another, it is highly likely we will do something during the next three to four years that we hope will add value to the current business.”
Whichever route they go down, it is a safe bet that the pair will bring consistency, quality and value to the project. You can hang your hat (and coat) on that.
