“The main thing that has surprised me is the potential for Bella Italia and how powerful it can be. Of our three main brands it has the highest margins and highest sales per square foot and has potential growth, that is a plus I hadn’t expected.” So said John Derkach a year in to his stint as Tragus chief executive back in October 2013.
Derkach spotted the growth potential of Bella, which he argued had been neglected by Tragus as it focused on Strada and Café Rouge. He said: “I think getting to grips with the potential for Bella Italia is our single biggest opportunity going forward.” To aid that step, Derkach brought in Nick White to oversee the turnaround at Bella and help it reach its potential. White joined the group from The Restaurant Group, where he had overseen its Chiquito and Garfunkel’s chains for two and half years. Previously he spent 10 years at Pizza Hut UK, including nearly four years as vice-president of operations. It is a significant compliment to White’s work that through all the upheaval as Tragus morphed into the Casual Dining Group and new chief executive Steve Richards brought in his own teams, that he has remained a constant. Indeed, as I have commented on before the success of Bella has given Richards the breathing space to get other parts of the business, including Café Rouge, into a better shape.
That success based on improvements across the board – service, quality of product and of site design, now sees the brand in its fourth year of like-for-like sales growth and it is understood that its like-for-like sales performance consistently out-performs the wider market, critically this is driven by both volume and modest spend growth. At the same time, it is believed that its return on investment in new sites is at industry leading levels and its most recent openings are trading significantly ahead of expectations. And there have been quite a few openings.
This year alone it will open 25 to 30 sites but CDG sees significant headroom for future expansion without the risk of cannibalisation of our existing business. Indeed Richards has said he believes the brand is capable of making up half of his stated goal of CDG growing to c600 sites. The brand has already opened 10 sites this year and will have a further eights opened by the half year. Its pipeline for 2017 and 2018 is already taking shape. White says: “We are very clear on our target locations and where we get the best returns so we have no need to experiment and take risks in unproven locations.”
Of the wider estate, the brand only has 16 sites which are not refurbished to the new Bella standard and White says that the group continue to invest in these sites over the next 18 months to two years.
White has built a strong team around him, with the recent appointment of Simon Holroyd as chief operating officer further enhancing the brand’s ability to drive its growth agenda at a pace while making sure its core estate continues to grow in terms of sales. It also has a new openings team, headed by operations director Brian McGeown with a team of 12 dedicated to the opening of new sites. White says: “We have forward invested in key roles so we have the right people ahead of time, this makes opening at a pace and with quality very achievable.”
This week Bella will reach two prestigious milestones – its 25th birthday, and its 100th site. The flagship 300-cover Bluewater restaurant will represent an investment by Bella Italia and CDG of over £1m. White says: “Value for money, a key measure for the brand, is rated very highly and significantly ahead of competition.” At present, White is making sure Bella represents value for money for Apollo.
Special Kayes set to go again
I couldn’t help having a sense of déjà vu on Wednesday when Tasty, the listed operator of the Wildwood and Dim T brands, used its full-year results to announce a number of key appointments and investment plans for its infrastructure as its gears up for further expansion. With Prezzo sold at the start of last year, it felt like only a matter of time before the full strength of the family’s focus was turned on Tasty.
Over four decades, brothers Philip and Reggie Kaye, and their sons Adam, Sam and Jonathan, have floated half a dozen successful groups and opened c600 sites with brands ranging from Garfunkel’s and the Golden Egg to Strikes and Deep Pan Pizza. Five of the companies have been sold on for a total of c £800m in real terms. It will be a surprise if Tasty doesn’t join that list, probably once it has doubled or more likely tripled its current estate size, which stands at 43 Wildwoods/Wildwood Kitchens and seven Dim Ts.
Shrewd site selection, alongside affordable food, has always been family forte and the confirmed appointment of David Street as property director will only strengthen the group’s ability to pick up the best sites for their brands. Street had been with Prezzo since June 2013 and helped the then Jonathan Kaye-led group add c100 sites to its estate. The former Whitbread property director will bring now that knowledge to bare at Tasty, which in the medium term has plans for 15 new sites and an expansion of its geographical footprint over the next year.
Wildwood has been evolved since its launch to have an ‘all day’ appeal, which has been improved by the development of a delicatessen in newer sites, which has driven additional morning and mid-afternoon trade. Adam and Sam Kaye’s part in the growth of Everyman Cinema has also been transferred to the brand, with the group looking to utilise space where possible with the addition of a cinema. Primarily based on the high street, the group has been broadening the brand’s appeal over the last two years, with openings in leisure parks and retail schemes. It has also made sure that former core brand, Dim T, has not been forgotten, with the successful return to the expansion trail at the Whiteley Development in Fareham, leading to a review of the brand and mixed retail and leisure developments being identified as a key area of expansion.
Alongside the Dim T in Whiteley, the company opened a Wildwood, the first time it has operated these two brands in the same location. It said that both sites are trading above expectations and pave the way for similar future openings if the opportunity should arise.
With further investment set for back office functions and marketing, this should prove a significant 12 months for the company. It has been said about the Kayes before that there knack for launching and expanding mid-market chains is unrivalled. It seems they have a good chance of keeping that record intact with Tasty. Or as serial sector investor and Fulham Shore founder David Page once said: “I would recommend anyone to back this family. There are no highfalutin’ ideas. They just get the model right.”