One Friday in July last year, Sam Harrison gathered his team together at his Balham restaurant and informed them that he was selling up and that Harrison’s, after eight years of trading, was closing. Following this shock announcement, he promptly got in a taxi and sped over to his Chiswick restaurant, Sam’s, giving staff, some of whom had worked with him at the restaurant for a decade, the same bad news.
“Some of the staff had been with me right from the start. They were like brothers and sisters,” he recalls. “People got emotional about it. It was very draining.”
The closure of Harrison’s two eponymous restaurants and their subsequent change into Foxlow, Hawksmoor’s neighbourhood restaurant brand, is in itself unremarkable. In a sector of rising premiums, a scarcity of vacant sites and increased competition from potential buyers, restaurant groups are targeting businesses that are still trading as part of their expansion plans. In the face of upward rent reviews and rising rates, many other independents are simply forced to close one night never to reopen again.
Yet in Harrison’s case there was a difference. While this was the end of his two restaurants, there was a chance to say goodbye to customers, secure jobs for his staff and leave with a clean track record. Here’s how it played out:
How did the deal come about?
Will Beckett [Hawksmoor co-founder]: I’ve known Sam for 10 years. Sam’s started in 2005, Hawksmoor in 2006, and we knew each other from mutual people. I had the impression that Sam wasn’t enjoying [the restaurant business] that much any more and I wanted to offer him a way out. In my view, it’s quite difficult to know how to get out of a business like this. You can sell the sites individually but, like all of us, lots of independent restaurant owners care about the people who work for them and are not sure how to retire for fear of worrying where their staff and customers would go. They don’t really want to leave in the dead of night.
Were you anticipating a sale?
Sam Harrison: Everybody dreams that one day somebody will make them an offer. Over the years, I’ve had approaches to buy each restaurant individually – never both of them – but I haven’t wanted to sell them individually. Will’s offer came out of the blue and I had mixed feelings about it. Part of me thought ‘of course it’s not for sale, it’s my baby and livelihood’, but then reality kicks in and you realise that everything has a price. If the price is close to what you think is right you’d be a fool not to consider it. It was a combination of right price, timing and selling to someone I wanted to sell to. Very few restaurants get the opportunity to go out on a high and, in some ways, I was being offered that.
What were the biggest considerations in the early days?
WB: Timing is crucial in deals such as this. You know you’re closing, you’ve exchanged contracts but not completed, so what do you do? How long do you let it run before you tell the staff? Eventually Sam called a full staff meeting in both restaurants on a Friday saying he was selling to us. Then we came in on the Monday and called another meeting.
SH: I wanted to tell my teams as soon as possible, but you have to go through quite a process before doing a deal. Businesses like mine are based around the individuals who run it for you and I hated having to keep it secret from them, but I couldn’t afford to tell them. Some will say I told them too soon, but we were confident the deal would get through. A lot of people were coming to look around the sites, surveyors, bank managers and the like, and you can only disguise it so many times. I’ve done it when looking at potential businesses myself, where I’ve pretended to be the gas man. People were growing suspicious and someone was going to find out.
What was it like telling the staff the news?
SH: It was very difficult. After the Friday meetings, I sent an email out later that day explaining the decision to everybody, as it was easier to put it in writing. I called everybody personally who couldn’t make the meeting. Out of 62 staff only two weren’t told in person because they were abroad. Over the weekend, I then made sure I was around and on the floor to answer questions. A few people were angry that, in earlier job discussions, I had spoken about promotions, but that’s to be expected.
WB: I told them that I couldn’t help it that I wasn’t Sam, but that I could still give them some control of their own destinies. I also made sure I made regular trips to the restaurants to be on hand to answer questions and concerns.
What were their options?
WB: We offered all the staff a choice of either taking redundancy, reinterviewing for a job at Foxlow or interviewing for a job in Hawksmoor. We gave them a month to think about it, during which time we could answer any questions they had, and then four weeks to try us out. If they didn’t like it after that time they could fall back on redundancy. One manager who had been there for a long time worked with us for a while but, in the end, decided on redundancy because it was worth a lot of money. Broadly, around 20% of Sam’s staff left, 70% stayed to work in Foxlow and 10% now work in Hawksmoor.
How did they react?
SH: A lot of the staff realised this was a great opportunity and that they were potentially joining a great restaurant group offering amazing opportunities. I had assistant managers in both restaurants who, because I hadn’t opened a third site, were a bit stuck. And suddenly there was Will with 10 restaurants now giving them great opportunities. What helped me was being able to look them all in the eye and tell them that if they were serious about working in restaurants then this was a good opportunity. When you hear Will talk about his business you want to work for him – I almost asked him for a job.
Describe the changeover process
WB: We shut Sam’s for eight weeks, Harrison’s for 12, and gave everybody work in our restaurants. We took that on as an extra cost for those eight to 12 weeks. It was good training but fucking expensive training – we don’t normally train people for that amount of time. We didn’t replace employees, either, it was all extra people in our restaurants. They all worked in central London – in the West End and Knightsbridge – no one was sent to Stoke Newington or Manchester. I think they appreciated that.
SH: There was a month between exchange and completion. I had to say to everybody, ‘I need one final push and work with me until the end of the month’. I made myself more visual than normal – that last month included some of the toughest days in all of my past 10 years. I did lunch and dinner service every day. I felt that if my staff saw me, still caring about the business, they would too. I was also up front with the customers, asking them to come and celebrate the last 10 years with us. It was certainly not a party, but we tried to make it as fun as possible.
What were the biggest staffing challenges?
WB: Getting all the staff back together [following training in the company] was interesting. If you take a team of 30 people who have never worked with each other before and try and mould them to behave as you want them to, it’s quite difficult, but we’ve all done it. But if you take a team of 30 and 25 have worked together before they all have a very clear idea of how they work and have a team identity, and that proves more difficult. Even after 12 weeks of teaching people how we do things, once they got back with people they had worked with for two years they returned to their old routines. Trying to break this attitude took longer than we anticipated.
And operational ones?
WB: We take two weeks to get up to speed, which is why we do two weeks of soft launch. At Chiswick it took four, but we still had only two weeks of softs. For two weeks, we were a soft-launch standard restaurant charging full price, which was an issue. Also, as we grow beyond central London, we deal with different customers. When we opened Seven Dials people would come in and go ‘what the fuck is this? – the staff haven’t shaved, they’re wearing trainers and sticking steak on a white plate and charging £65, that’s ridiculous’. We haven’t had that for five years – everyone knows what its like when they go into a Hawksmoor now – but its happening for Foxlow. People in Clerkenwell and Stoke Newington know what Foxlow will be like but, with Chiswick, the customers didn’t really get it at first. When you’re not at the standard you should be and customers don’t understand it, that’s a bad combination.
How do you regard the outcome?
WB: Sam has got something relatively rare, the ability to walk away with head held high, money, publicity about doing it for the right reasons, staff and customers taken care of. He sold it to someone he liked and the whole thing felt nice. The vast majority of people don’t get that.
SH: We are still very good friends. That, in itself, tells a story.
The above article is from the March issue of Restaurant magazine. To subscribe to Restaurant email customer.service@wrbm.com
