After the blink-and-you-would-miss-him stint as Byron chief executive by Andy Manders and speculation that the Hutton Collins-backed burger concept was finding trading challenging, it came as no surprise that the company moved quickly to avoid losing any further momentum, hiring Simon Cope as its new managing director. But, does his appointment and the continued search for a chief executive throw up even more questions?
Scope to double in size, check. Possible international expansion, check. Grabbing market share, tick that box off as well. As first public utterances go, Simon Cope’s words in his new role as managing director of Byron were straight out of the private equity-backed, growth-brand play book.
To be fair what else was he going to say? How about: We’ve lost some key people, we’ve lost some momentum and our rivals have probably reclaimed back some of the market share we took off them over the last few years? Of course not, but these are the immediate challenges that I would suggest Cope needs to get to work on in his new role at the Hutton Collins-backed chain.
It has been a bumpy 12 months for the 71-strong burger brand. Speculation has persisted for some time that some of the group’s less established sites have been underperforming but the group is not alone in facing such rumours at present. The furore surrounding the deportation of 35 of its staff after a HMRC sting last summer and the unwarranted backlash that ensued will have dented morale. Then there was the departure of founder Tom Byng at the end of the year, which was followed by the group’s operations director, head of food and property director.
It would be harsh to suggest that Byron has plateaued, especially as it is not alone in facing an increasingly challenging trading environment. But as I said after Byng’s departure it certainly stands at a crossroads. Long-term rival GBK is under new ownership, trading off the back of a fully-invested estate and moving ahead in terms of its use of delivery, including its fledgling link up with Deliveroo Editions. At the same time, groups such as Honest Burgers are starting to increase their presence both in the capital and regionally; while the machine that is Five Guys is showing no signs of slowing down its expansion plans here.
There has also been a suggestion of an over-reliance on the growth in the delivery side of the group’s business covering for a shortfall in eat-in sales. Something that was also highlighted after David Campbell’s recent departure from Wagamama.
Hutton Collins will be very aware of how an unsettled management team can result in a business losing momentum. It has already experienced the same issue at its other sector investment Wagamama, with Steve Hill stepping down as chief executive in June 2012, to be replaced by Steve Easterbrook, who then stood down in April 2013. It took the appointment of Campbell in July of that year to put the noodle chain back on the path that has seen it outperform the market for 152 consecutive weeks.
They have moved quickly to make sure that doesn’t happen with a familiar face in Cope, who joined Wagamama a month or so before Campbell and became a trusted lieutenant to the latter in putting in place the return to kaizen strategy that has underpinned the group’s resurgence. The skillset that he has developed under Campbell, plus the work he put in place on that brand’s marketing and property functions should prove hugely valuable to Byron.
As I understand it Cope was one of the two final names in the hat for the chief marketing officer’s role at The Restaurant Group until recently, highlighting the speed of his appointment (Hutton Collins going for a known quantity and safe pair of hands – giving them more time to appoint a chief executive), and both the fluid nature of management teams in the current challenging environment.
It has been suggested that with a chief executive in place, it will be a bit squashed at the top of Byron, especially as there has been no suggestion that Cope’s is an interim appointment. I understand that there are currently three names in contention for the chief executive role. One could conceivably be Cope’s, a try before you buy so to speak. However, whilst Byron will certainly benefit from his skillset it is thought the top role has probably come too soon for him.
So who could be in the frame? It is thought that before Byng’s departure Hutton Collins looked at the experienced management teams heading up Casual Dining Group’s portfolio of brands for a possible successor. Nick White has since left the company after reinvigorating Bella Italia. He is thought to be currently enjoying some time away from the corporate world, but could he be tempted back to work in tandem with Cope?
Another name thrown into the mix, some would say mischievously so, has been Alasdair Murdoch, chief executive of long-term rival GBK. Highly-regarded, it’s surprising his name isn’t linked to more jobs in the sector after the work he has carried out at righting the GBK ship, steering it into smoother waters and a positive exit for backers Yellowwoods. A lot would depend on his relationship with new owners Famous Brands and whether he sees the Byron role as a massive step forward. Would he cross the floor to go up against everything he has built at GBK? Doubtful.
Danny Breithaupt, the former TRG chief executive, certainly has a point to prove and I could imagine him throwing his hat in the ring. Although, unfortunately it is thought he is still perceived as slightly damaged goods after his departure from the Frankie & Benny’s operator.
One non-operator name, which I believe has been linked to the process is Duncan Gibson, the ex-managing director of The Brakes Group and Abel & Cole, who stepped down from the former after the completion of its sale to US company Sysco in a deal worth $3.1bn (£2.2bn).
However, you would think with executive chairman Dalton Philips being from outside of sector, and the brief stint of Manders (ex-managing director of retail chain Fired Earth), Hutton Collins would be more inclined to seek an out-and-out industry person. It is thought that at the time of Byng’s departure the private equity group were looking for someone with a marketing background who would look to enhance the proposition and embrace new revenue streams. Now Cope has joined, Hutton Collins seems to have covered off those bases, making the appointment of an out-and-out operator more likely.
Hutton Collins finds itself coming up to four years into its investment, after acquiring the then 34-strong Byron from Gondola for £100m in October 2013. It may well take them another two to three to get into a position to get a healthy return on their investment, unless a sale to a trade buyer is explored in the interim.
Of course the consumer remains mostly ignorant to the group’s boardroom moves. Although the brand’s performance may be suffering a bit, Byron remains an exciting proposition to consumers and is an important brand in the UK’s eating-out landscape, with as Cope says, scope for further expansion in a market that is still to mature. Byron needs to move through the gears again, with the right driver or drivers to steer it back into the fast lane.