Three times a habit for Byron insolvency

As the saying goes: ’Once is a mistake. Twice is a pattern. Three times is a habit.’

Byron’s succession of insolvencies is very much starting to look like a habit, as sources close the company reveal that it has filed a notice of intention to appoint administrators.

It will be the third restructure of the business in five years, and comes just two-and-a-half years after its last pre-pack administration sale.

Certainly, the brand has undergone an extraordinary decline from its position as one of the most promising casual dining brands of its generation.

Founded by Tom Byng in 2007, he was inspired by the simple fast-grill hamburgers of America, that didn’t exist in the UK at the time.

“For us proper means letting the flavour of the beef come through,” he said. “The idea of a classic burger is a great bun, great beef, simple toppings, which we have tried to take to its natural conclusion. Find that great beef, exclusively from Scotland, a bespoke recipe, a fresh approach.”

Launched in 2008 by Gondola Holdings, then the owner of PizzaExpress, Ask and Zizzi, the ‘proper hamburgers’ tagline was in contrast to what the Bryon team saw as the over-complicated offerings of the time, which were laden with ‘exotic’, ‘posh’ or ‘gourmet’ ingredients.

Replacing Gondola’s Joe Shmo’s burger format as the focus of its rollout plans, by 2010 Bryon had already grown to ten sites, and two years later was expanding outside the capital with a site in Bluewater shopping centre and Oxford.

One of the first to move away from the cookie cutter approach to openings, it embraced the industrial chic look of exposed plaster, brickwork and ventilation.

Pioneering a new growing trend for premium ‘better’ burgers, Byron soon attracted interest from potential suitors, and Gondola agreed to sell the brand to private equity group Hutton Collins for £100m in 2013. 

Sold under a plan to open 10 sites a year and eventually grow to over 100 units, the then 34-strong business continued under the leadership of the entrepreneurial Tom Byng.

What he might have lacked in restaurant executive experience, he more than made up for in enthusiasm, passion for the product and a sharp focus on happy teams.

Byng also gave due credit to Gondola CEO Harvey Smyth for its “good parenting” of the brand.

“I had a sounding board on my doorstep. A bunch of people more than happy to give their perspective to help,” he told MCA. “To be able to have good people that close to call on was a great benefit, but also to have the space to develop something entrepreneurially where there was no pressure in terms of suppliers, marketing or recruitment. You know some people when they start up may look back and say they had cut corners to get where they were, we were determined to not do that. That is where the good parenting of Gondola paid dividends.”

As the business was taken to the next stage, Byng was determined not to let corporate jargon seep in, playing ‘bullshit bingo’ in head office, in a bid to keep everyone in the business talking common sense.

Prioritising a strong work culture, Byron boasted a 25% manager turnover, compared to 65% industry average at the time.

And still the growth continued. By 2015, Byron was 52-strong, with enhanced ambitions to open 15+ sites a year.

The brand was not alone in the fast-growing category, a point Byng was acutely aware of and something he did not see as a great disadvantage. But it was a factor that would surely go on to hurt Bryon in subsequent years, as the brand and offering was diluted through successive changes in ownership and management.

“What has happened in the past four or five years is that a new category has been created in the burger market,” Byng said. “That category is taking more and more people on a journey from what they thought a burger was to something that is infinitely more enjoyable, which they are happy to pay a bit more money for.”

With GBK, Five Guys, MEATliquor, Honest and Ed’s Easy Diner all part of the so-called burger wars, Byng saw clear differentiation in terms of offering, format, menu and branding.

Nor did Byng see any conflict with the burgers of the QSR space. “We are not targeting the stalwart customers of the fast-food market, but people that spend £12 to £20 on eating out. We are giving that casual-dining customer a premium burger experience that previously didn’t exist.”

Led by a British management team, and thus “restrained and proper”, Byng was reluctant to talk big numbers, but nor was he short of ambitions for the business.

“Do we think this is a business with huge potential? Yes we do.”

Yet initial cracks did soon begin to show. Byon inevitably lost cool points when the then Chancellor George Osborne was pictured eating a Byron burger in 2013.

Osbourne faced ridicule in the press over the idea he was passing off himself as a man of the people while eating what the tabloids called a poshburger.

Meanwhile, it was pointed out Byng came from the same cabal as fellow Old Etonians David Cameron and Boris Johnson.

The business faced more negative press when it was accused of betraying its staff, by inviting them to a training day, only for them to be effectively handed over to HMRC for immigrations breaches, leading to protesters releasing live insects into its restaurants.

By 2016 Byron had reached 65 sites, though speculation was starting to build at this point that some of its sites were underperforming, as increased competition for consumer spending squeezed the casual dining sector.

By the end of the year, Byng had taken the decision to step down from the business after ten years, and the brand has arguably never been the same since.

What followed was a series of different management teams and owners largely trying and failing to recapture Byron’s lost momentum.

Byng’s successor Andy Manders stepped down as chief executive after just five months.

Simon Cope, joining from Wagamama, was next up first as MD, later CEO, and was seen a safe pair of hands by Hutton Collins.

He was tasked with arresting the plateau of the brand, as key people left the business and momentum was ceded to rivals.

Amid a trough trading environment, four sites were placed on the market, which would foreshadow the financial woes on the horizon, as profits came increasingly under pressure.

Speculation swirled towards the end of 2017 that Byron was looking to restructure as its problems intensified, with an accelerated sales process reportedly on the cards.

By early 2018 it emerged the burger chain had lost £10m the prior year, with a company voluntary arrangement proposal (CVA) confirmed.

The restructure saw Byron acquired by Three Hills Capital, with around 20 sites closed and c£21m of debts written off.

Having managed the transition to the new owner, Cope departed at the end of 2018, handing over to Simon Wilkinson, previously chief executive at La Tasca, and Parkdean Resorts.

In his first interview with MCA, Wilkinson acknowledged the once high-flying Byron had endured a rough time.

“It’s fair to say it had a tumultuous three years,” he said. “Byron was the market leader, one of the first really premium burger brands, but in the last three years it stood still a little bit, it had lots of internal issues, and was probably caught up and overtaken by the competition.”

Three Hills Capital injected £10m into the business to help the business get back on an even keel.

Yet an overhaul of the menu and branding did little to arrest the decline, and the introduction of a chicken smashed avocado burger and brunch waffles failed to connect Byron to it’s ‘proper hamburgers’ origin story.

A bid to revamp the branding and fascias, which had previously been individual across the estate, and less overtly branded than their high street rivals, struggled with a logo that was difficult to read and which was quietly dropped.

The arrival of Covid-19 inevitably piled pressure on a business that was still struggling to rediscover its mojo, and by March 2020 Bryon had engaged advisors to assess options for emergency funding to shore up its balance sheet.

Restructure number two occurred later that year in August, with Three Hills Capital calling in administrators as cash dried up.

As part of the pre-pack administration sale to Calveton, 31 restaurants closed, the Byron estate brutally hacked back to just 20.

Wilkinson stayed on to lead the downsized group through the subsequent Covid-hit months under new name Proper Brands, later Famously Proper.

As a result of the 31 site closures, just 550 of Byron’s 1,200 employees were retained, with 650 jobs lost.

Commenting at the time, AlixPartners MD Graeme Smith suggested fast-expanding casual dining brands like Byron were often a “victim of timing”.

“If you are choosing to roll out and aggressively expand at the time where were others are also doing the same, it just becomes incredibly difficult to be able to prosper, whilst doing that at the same time as others.

“Unfortunately, for Bryon after having completed a restructuring to right-size it’s estate, it then gets hit with this crisis, which was really challenging from a timing perspective, and obviously they have no option but to go through a further restructuring process.”

Not long before his own departure, Wilkinson reflected further on the decline of the once edgy, cool brand.

“When Hutton Collins owned Byron, the focus was on numbers and growth,” he told BigHospitality. “And in their quest to hit those numbers, they probably chose locations that weren’t right, on rent deals that weren’t sustainable. They took their eye off the ball. They became complacent, and probably got a bit of greedy; and the business became tired and old.”

Wilkinson said the offer was “over-complicated”, necessitating a new strategy to bring Byron back to its roots.

“Strategically Byron had gone off on a tangent,” he added to MCA. “What lockdown enabled us to do was to talk about what the strategy actually was. It is very much about what Byron was famous for, which is premium burgers, craft beers and the best milkshake in the market.”

There was some positive news for the brand, with the acquisition of a secondary brand, fried chicken specialist Mother Clucker.

Wilkinson departed in 2021 to be replaced by Gavin Cox, who was unknown to the sector, with experience at Adelie Foods and McCambridge Group.

Speaking to MCA last year, Cox set out his ambition to bring Byron back to 50 sites, as well as roll out Mother Clucker, with a flagship opening on Upper Road Islington.

“I’ve never professed to be a foodie,” he told MCA. “My focus has always been to take a brand and try to make it better.”

For Byron, this again was a “back to basics” approach with menus and operations.

Yet the revamp of the sides, with the likes of ‘pimped up’ halloumi fries, mac & cheese with pulled beef, and stir-fried greens & glory, were hardly a simplification of the menu.

Meanwhile the brand seemed to fall back into the discounting trap with family meal deals, a practice the industry has long sought to extricate itself from amid anguish over devaluing the product.

With major cost pressures on the entire sector, in November 2022, the company looked to be struggling again. Sky News reported it had hired Interpath Advisory to seek new investors - just two-and-a-half years after its last brush with insolvency.

This has now come to pass, with sources close to the parties confirming Famously Proper has filed a notice to appoint administrators, and that it is confident it can secure the long-term future of the business.

While Mother Clucker is not thought to be part of the process, its only restaurant on Upper Street is now listed as closed some six months after opening, the brand currently only available as delivery-only.

Famously Proper’s fate will emerge in the coming days, and despite the attempt at positivity over Byron’s future, this third insolvency is nothing short of another bruising episode in its painful decline.

Facing a brutal trading climate and a fickle consumer not inclined to stay loyal to a brand that has been both messed about with and left behind, more closures and a further erosion of equity seem likely.