Inside Track by Mark Wingett
It was nice to catch one’s breath on Sunday afternoon, after a couple of days that saw four new appointments flagged up and two businesses placed in play. Picking the bones out of some of these announcements is another thing.
Let’s start with the biggest surprise: Steve Easterbrook’s decision to leave a second leading chain after spending less than eight months there. His return to McDonald’s highlights the fact that he is surely in the pole position to take the fast food chain’s top job at some point; not, as some have suggested, that he is so institutionalised when it comes to McDonald’s that he found it hard to settle in the fast-casual/casual sector.
The question is, what did he bring to Wagamama in his short tenure? One leading operator suggested that the group’s latest openings had demonstrated a more mature brand, in terms of design and offer, but is that a natural evolution for the concept that would have been seen anyway?
The group’s faltering US campaign was also going to be seen as a measuring stick for Easterbrook’s appointment. The fact that chairman David Williams has said that the board has recently approved plans to accelerate growth in the UK and the US and has a number of “exciting initiatives underway to support this expansion”, one of which is believed to be a new million pound central kitchen based in Greater London, suggested that Easterbrook has at least laid the ground work for a successor.
And who will be that successor? Anyone who kept up with M&C Report’s twitter feed over the weekend (@MCReport) will know that several names have already been put forward, including Paul Symonds, the former Bay Restaurants chief executive, Alasdair Murdoch, chief executive at GBK, and Kevin Bacon, the former The Restaurant Group director and Jamie’s Italian International MD, who is close to launching a new chicken concept called Whyte & Brown.
The good thing for any new chief executive is that in his short time at Wagamama, Easterbrook had not tinkered with the management team that has served the brand so well over the last seven years.
In a quirk of timing, surely not lost on Gondola CEO Harvey Smyth, a few hours after the announcement of Easterbrook’s departure, Richard Hodgson, formerly of supermarket chain Morrisons, was announced as his successor at PizzaExpress. He comes into the industry with a good pedigree across the retail sector, seen as one of the rising stars and could again underline Smyth’s eye for talent spotting. Hodgson will now look to build on some of the fine work James Spragg has been doing at the 420-strong chain since his appointment as managing director of restaurants last year.
The third appointment in this Wagamama/PizzaExpress saga should be Steve Hill. The former chief executive of Wagamama and one of the main driving forces behind its growth is in advanced talks to become chairman of Pho, the Isis Equity Partners-backed Vietnamese fast-casual concept founded and led by Stephen and Juliette Wall.
Hill, who spent time at PizzaExpress in the 1990s, has been on a sabbatical since he stepped down from Wagamama last June after six years as chief executive of the noodle chain. The man who oversaw the doubling in size of Wagamama’s estate in the UK and its growth internationally should prove a useful sounding board for the Walls as they look to grow Pho’s national presence.
After the sale of Giraffe to Tesco, Luke Johnson has now decided to crystalise his investment in 3Sixty Restaurants, which is behind the Rocket and Ego chain. He and chief executive James Horler, who bought out former backer LDC, the private equity arm of Lloyds Bank, three years ago, have appointed Coffer Corporate Leisure to advise on its options after a receiving a bid from an unnamed private equity player.
The 12-strong group, which sold its Rocket site in Mayfair for a significant premium late last year, generated sales of £12.7m in its most recent financial year, with site EBITDA at £1.48m. It is thought that the chain is valued at more than £8m.
Horler told M&C Report that all options were available to the group, including staying on. He said that Ego in particular had had a “phenomenal” nine months. It is thought that the private equity team that have made the unsolicited approach have its own management team ready to go. If the process if successful it is thought that Horler and Johnson, who both have significant stakes in the business, would look to do another deal together.
As with Cote, the sector will keep a close eye on this process. It is too early to say that the logjam of deals is about to be eased, but it looks at least like that magical word momentum may be coming into play.
