Mark Fox yesterday became the latest sector head to leave his post, as the shareholders of Bill’s, the Richard Caring-backed chain, seemingly lost patience in their search for an exit and looked to ex-Punch chief executive Duncan Garrood to lead the c80-strong business into another “new phase of development and expansion across the country”. He does so against the backdrop of a casual-dining sector going backwards, with a brand in need of a kick-start and with a main backer arguably distracted by some “new toys” to play with. Mark Wingett looks at what went wrong and what’s could be next for the business.

It is fair to say that it has not been the best of times for the majority of the companies nominated in the Retailers’ Retailer Best Emerging Concept category in 2008. That year saw Jamie’s Italian hold off competition on the night from Bill’s Produce, Busaba Eathai, Byron, Cote, Gusto, Taybarns, and Wahaca to collect the award. A decade on, only Cote and Gusto have so far emerged unscathed from the last 18 months, Taybarns doesn’t even exist anymore. Yesterday, it was the turn of Bill’s to have its own bump in the road, however it is thought this one had been developing since last summer.

Mark Fox, the former managing director of Starbucks UK and managing director of Pizza Hut’s delivery arm, did not waste any time stamping his mark on the then 74-strong business, which he joined as chief executive at the end of May 2016. A restructuring of its management team, saw chief operating officer Roberto Moretti and managing director Scott Macdonald leave the company with immediate effect.

At the same time, Ron Lento, formerly director of food & beverages for Whitbread Hotels & Restaurants earlier this year, joined the company in the new role of innovation director; whilst Graham Ford, the former chief executive of Jackson & Rye, moved to chief operating officer.

These changes, coupled with a slowing down in the group’s openings programme, after its previously opened c60 sites in three years across the UK under Moretti and Macdonald as joint managing directors, pointed to a company needing to refocus. Unsurprisingly after that rate of growth, speculation grew that consistency of offer across the group had become variable; whilst at the same time some consolidation of the existing estate was needed.

The group had already started to look at ways of evolving, conscious that both the market towns and all-day dining sector it had come to dominate was getting increasingly crowded. It was still determined to double its restaurant count (Fox believed 150 was a good number, Caring, who invested in the then two-strong business had mooted 200), but you felt the next stage of its expansion would need to be more measured, less frantic.

In regards to an exit from the business, Fox’s appointment was seen as a rallying point for that eventual process, if his reset plan worked. When I spoke to him at the start of 2017, Fox had further strengthened the management team - Nicola Frayne, previously at Whistl and Unite Group, joining as chief people officer; and Catherine Salloux, formerly of ASK, as marketing director – a new pipeline of openings was being worked on, and a new look, aiming to capitalise on the group’s strength at breakfast and lunch but also boost its evening sales – with more emphasis on the bar area – was launched at sites in Chelmsford and Southampton, with others to follow.

There was also renewed talk of the launch of a grab-and-go format, developed under the working title “Little Bill’s”. Fox described the new format as “Pret meets Leon with a difference”. The group was at the time close to securing one or two sites in London for the format and, if it tested well, Fox believed the company could eventually open 300 to 400 sites under the brand.

All was set fine, but as the year progressed, an opening for the new format was put back. A site in Chancery Lane had been identified, a new name chosen in Vitesse, design and menu worked up but there remained no launch date. At some point at the end of the summer the new concept was put on the backburner, the chosen site would eventually become the first Freshii in central London.

At the same time, Caring and his erstwhile business partners and fellow Bill’s shareholders Andy Bassadone, Chris Benians and Nick Fiddler were testing the waters for a sale of the then £110m-turnover business, which saw EBITDA increase 8.9% to £13.5m in the year to the end of July 2016. I understand that talks regarding a sale to BC Partners, the current backer of former stable mate Cote, took place during last summer, but were eventually shelved.

It is thought that the failure to get “Little Bill’s” off the ground, with development costs of the project throught to nearing the £1m mark, on the back of not securing an exit, began the process, which has seen Fox leave the business to be replaced by Garrood. On top on this, the business has, like the rest of the casual dining sector, had to face a downturn in trading. Although it has a number of exceptionally good sites, it also has a number of underperforming units, which are believed to have dragged down overall like-for-likes sales, with suggestions that they have been tracking at –c4.5% in some places. I understand, again like many, if not all of it peers, it has placed a handful of quietly on the market, plus a few more that it would sell if the right offer came up.

The latest throw of the dice, came last week when MCA revealed that the company was rolling out three concept sites to test drive an evolved experience and menu. The c75-strong group’s sites in St Martins Courtyard in Covent Garden, Westfield and St Albans have been refurbished and their menus reimagined to “further dial up the eclectic British style created by Bill’s founder Bill Collison”. It is thought that the redesign has been overseen by Benians. Looking at imagery from the St Albans site, it is hard not see some similarities with Caring’s new pet project (until Harry’s Dolce Vita’s roll out begins), the Ivy Collection, which like Bill’s before it is on a march across the UK at present, taking the best sites and staff in each city and town it enters. (Sub discussion – The Ivy Collection is the new Jamie’s Italian?).

Enter new chief executive Duncan Garrood, refreshed following a sabbatical after his two-year stint at Punch (Taverns). During which time he oversaw, in his own words “a transformation from a financially distressed business, through to the development of a customer service and hospitality focussed outlook and the roll out of a thriving retail model”. More importantly, for the shareholders, he led the company through its acquisition by Patron Capital and Heineken, stepping down last September. I understand Garrood, who was previously president of food at international franchise operator MH Alshaya – the Kuwait-based retailer that franchises brands including Starbucks and Shake Shack - was one of two men linked to the Bill’s role, the other being ex-Wagamama chief executive David Campbell. Both men come with turnaround credentials, but also for getting businesses ready for a sale. Bright and engaging, Garrood built a number of bridges at Punch, putting an acceptable public face on a business that had for an number of years lost the PR war with its tenants and the wider world.

Garrood also has another skill set that may come in handy with his new employer, as one person put it: “Duncan has worked in the Middle East, where you often have to deal with big egos/expectations and illogical decisions, so he’s well used to working with founder-run businesses, which might be a better fit for Bill’s.”

It is thought that the company will see how the three new concept sites bed in, before looking to roll them out elsewhere, but I would not be surprised if by the end of the summer/start of Q4, with say a further two or three more converted units under its belt, a tidied up estate and some stable trading, the group’s shareholders begin testing the waters on an exit again. Some have suggested that the business may now be valued at c£70m, others at lower than that. Whatever the valuation, it feels like Garrood has been hired to get the job done, sooner rather than later, before its main investor’s “new toy” delivers it, and others, a knock-out blow.