M Restaurants, the vehicle devised by former Gaucho managing director Martin Williams, is looking to open a further three sites in London, after signing on what it plans will be its fifth site in Canary Wharf.
Williams has already signed heads of terms on what he believes will be M’s fifth site, in a new high-rise build, located on the building’s second floor, the planned 10,000sq ft restaurant is due to open in 2019.
Restaurant three will be in the West End, either Soho or Mayfair (“I’m not going lower than Piccadilly”) and Williams says that despite looking in this highly sought after location he isn’t prepared to pay a premium.
Initially needing to raise £2.3m, his main backer, who stumped up a third of this figure, is his father in law. Ten further investors who knew his track record in the industry have interests of up to a couple of hundred thousands pounds each.
These investors have signed up to a plan to open three restaurants in three years under the M brand, all of which will be slightly different to reflect the local area, with Williams then looking to refinance in year four.
The plan is for each restaurant to have a turnover of at least £4m and an EBITDA of £700,000, which Williams says the group’s original site inThreadneeldle Street will reach by the end of next year.
Its recent opening in Victoria, meanwhile, will hit £6m turnover in year one, he predicts.
“Threadneedles Street is only a five-and-a-half day operation but Victoria is seven, so it will do bigger numbers. It will become easier as the brand becomes more recognised.
“I didn’t pay a premium at Threadneedle Street and I’m not going to pay it elsewhere,” he says, “there’s enough opportunities with new leases out there. It’s not in my model to do so. Threadneedle was much less than people think. The capex was £2m. Most people would expect double that given the scale of it. I was up against some serious players, but the majority only wanted half the unit. It has a relatively attractive rent and space to be able to facilitate my vision - without trying to sound like a dick.”
Not paying a premium and getting good deals on sites - although he did have to pay £100,000 to change the usage of the Victoria Street site from A1 to A3 in spite of it being a new build - has meant his restaurants are also less risky than they might first appear.
The breakeven at the City restaurant is £40,000 a week, and Williams claims to have beaten this figure every month, except in January and in the summer when it broke even. “July and August were horrible, and so are bank Holidays,” he recalls, adding that each tube strike costs him about £20,000 in lost revenue.
