Since founding Thai Square Restaurant Group more than 20 years ago, Haim Danous has seen his fair share of rivals come and go. As he relaunches his Islington branch after an 11-month closure, he talks to MCA about sticking to his guns, the pitfalls of private equity investment and new avenues.
For many operators, the closure of a site for the best part of a year would have been be a disaster.
But as a property magnate and freehold owner of all his 13 Thai Square branches, Haim Danous is no ordinary operator.
While the prolonged closure – caused by a flood, subsequent wrangling over insurance, and a major refurbishment – was an irritation, Danous is heartened to welcome back old faces and new.
“I thought after nearly a year of being shut it would be difficult to get customers back, but it seems they are coming back in droves,” he says. “We are very busy. In the third week we are better than the year before.
“The customers have changed completely, there’s a different calibre. They were younger before. Now it’s a bit more middle aged. There is more buzz in the feeling of the restaurants.”
The Iraq-born restaurateur’s optimism is not confined to his Islington branch, and he says while others have suffered in the aftermath of the Brexit vote, his like for like trading figures are up 9%.
Nor is he suffering a staff shortage, saying he is blessed with queues of applicants, which he credits to his good treatment of staff.
And he is scathing of the trend for discounting, which he sees as bad for business in the long term.
“We are one of few chains that has increased turnover by 9% since the Brexit vote”, he says. “It’s been a great improvement.
“I always stick to my guns. When the last recession came in in 2008 everyone started discounting. I have never done it and don’t expect to. Once you start with offers you can’t stop.
“It might be good for short term, but in the long term it’s a disaster.
“I don’t follow the trend, I’m the loose cannon of the industry!”
Danous admits he is in a privileged position owning the freeholds of his prime sites, as it takes rent and private equity investment out of the equation, factors he blames for many of the industry current problems.
“Thai Square is the only collection of Thai restaurants that has survived 20 years,” he says. “All the others have gone.
“And now with hedge funds, many of the new ones will be go out of business.
“You can’t run a business by hedge funds. You need an operator who can swim with the tide. Things go up and down in this business. If you cannot adjust you’re out.
“I used my own money, this is why we’ve survived. That and our food.
“We have always stuck with proper cooking; we haven’t gone to a central kitchen. Most Thai chains have been forced into manuals by private equity groups and have to have a central kitchen. Now they are in financial trouble.”
Warming to the theme, he rails at a culture of over expansion.
“Everyone wants to open 20 restaurants a year and be multimillionaires in a day. It’s a recipe for disaster; you need steady growth.
“Even though I had money, I went slowly slowly. You have no control if you expand too fast. Your structure can’t take it. You will be hit with cashflow. You can’t do it in a day. You need patience.
“If you have a good product it’s better to have one good restaurant than 20 bad restaurants. You only open multiples to exit.”
What next for a man who admits he does not need to work?
The hands-on operator is currently refurbishing the entire Thai Square estate, as well as operating spin-off hotels and spas.
He is working with beauty and cosmetics entrepreneur George Hammer to roll out The Chippy, the upscale fish and chip restaurant which has a single site in Mayfair, and a second forthcoming at his property at Minories in The City.
And he is working on another major project – a members club-style complex set to include a restaurant, sisha bar, cinema and hotel under one roof, which is currently in planning, and is set to open in one of his freehold properties.
Still hungry for more, Dannous is interested in launching new concepts, and suggests Indian cuisine could be an avenue for him.
“I am open for anything,” he adds. “Anything that makes money and makes me happy. I would like to go into Indian.
“If you slow down you’re dead. It’s fun, life is fun. New challenges are nice. Nowadays, even if the business doesn’t work, I own the freehold of the building. It’s a win-win situation for me.”