A firm favourite of the London’s restaurant scene, Polpo has taken its first steps outside of the capital with a launch in Brighton. Mark Wingett talks to managing director Luke Bishop about taking the concept on the expansion trail
It’s refreshing to start a conversation with a managing director, who starts by confessing that his company had considered selling one of its flagship sites, when it would have been easier to dodge the question. But after spending a couple of hours with Luke Bishop, who is leading the growth of Polpo, its clear that being up front about things is part of his and the brand’s DNA.
So Bishop, who has been with the Richard Beatty and Russell Norman-founded group since 2010, starts by confirming rumours that the group had considered disposing of its Shaftesbury Avenue-based site Ape & Bird, but pulled back from this to bring it more under the Polpo umbrella.
He says: “Ape & Bird was brilliant in terms of what we were trying to do with the food and drink offers, with that more pub feel, but it wasn’t Polpo. We decided we are better at running Polpo restaurants than anything else. We classify it as a Polpo restaurant now, but with an A4 licence and a strong drinking mix. We were genuinely surprised how different the consumer mix was from there to our nearby site in Maiden Lane.
“Our Polpo customers were not going to Ape & Bird. It has focused our parameters on who we appeal to. We found that everyone was going to Ape & Bird to drink and no one was eating, so there was a 150-cover restaurant not being used. We were very happy that the drink side had taken off, but we have a 5,000sq ft site that was not being fully utilised. That is changing now.”
Overall the nine-strong company has traded well in the past year. It is on track to post turnover of c£13m in its current financial year to April up from £10m in 2014/15. It is 12 months that could be transformational for the company and the seven-strong Polpo brand in particular, as it looks to move out of its central London heartland.
Bishop says: “For the foreseeable future we are focusing on the growth of Polpo. Ideally we would like to do three a year. With our infrastructure and our team we can comfortably open three a year, ideally spread out, but that is not how the world works sometimes. For example, the Brighton site only came to us a few months ago so it is not on our budget for this year. That’s great in terms of income but obviously you have to spend some money to get it up and running.
“The biggest success of this year was Polpo Chelsea, which we opened in May, which we will get 11 months trading out of. It has beaten our expectations by a long way. It is hitting Beak Street turnover levels. So the average weekly sales it is hitting is net £40k – just under Beak Street. We have had stellar weeks there, but is has a big outside space, so the performance swing can be very big depending on the weather. For the year we are very happy with it.
“Property in central London is crazy, hence we have started to look elsewhere. We are very fortunate to have the estate in central London we have. We don’t have the finances to pay million-pound premiums, we don’t see the point. We don’t want to and we would never get any ROI doing that.”
Aside from regional opportunities, London villages is the group’s latest focus, such as Twickenham, Wimbledon, Dulwich or Greenwich, “that Zone 3 or 4 area”. The company, which also operates Mishkin’s and Spuntino, in the capital, is currently in negotiations on a site in Lewisham.
Bishop says: “We think we’d have a good chance of doing well in these places. I am believer in the Nick Jones-effect, if you build it they will come. Regionally, we are looking at university, market towns such as Cambridge and Canterbury. It’s a balance. You don’t want to follow everybody, but they are opening and trading there for a reason.”
To aid expansion plans, the group has secured a £2m loan from RBS that combined with cash flow will allow it to add up to six to eight sites under the Polpo brand over the next two years. “We try extremely hard to have sub £500k fit-out costs and to not pay premiums for that reason,” says Bishop. “In the last nine sites we have paid three premiums, so we have done alright. This next 12 months is a big learning year for us. Part of the RBS deal is that we need to open six to eight restaurants over the next couple of years and we to push the brand. We want to test it, flex it and prove it will work in Brighton. We’d be confident then it will open in say Bristol, Guildford and Exeter.”
After that two years, Bishop admits that the group, which was approached regarding investment by Hugh Osmond earlier this year, will look to assess their funding options. Help with that decision should come from Jon Lake, former M&A/lead advisory director, specialising in the licensed retail sector at Deloitte, who has become a non-executive director of the group. Bishops says: “Jon has been a brilliant help to us. He has given us sensible, detached advice. There is no personal point of view from him, whereas after five years building this, we can’t give that.”
We have very strong team. Richard is more in the background, but deals with the legal and finance side, everyone knows who Russell is and I am the person who runs the business and does everything else day to day. We have a strong ops manager and good head chef. I am quite confident we can match our plans with a small team.
For Bishop – whose career began 20 years ago as a waiter at The Seafood Restaurant in Padstow and led to him working for a number of international restaurants in Sydney and London, including senior management positions at Conran (now D&D) Zuma and Smiths of Smithfield – the groups’ evolution and the welfare of its staff will be the key foundations to its continued growth.
He says: “Without sounding arrogant we don’t tend to change our offer as we look to expand further. We think our pricing is good value for London and I don’t see it being any different in Brighton. I believe strongly in having faith in what you do. If something is really not working then we will take it off the menu, but we aren’t looking to change for change’s sake. You need confidence in why you have been successful already. It’s a fine line all restaurant businesses have to face. You don’t want to come over as arrogant, aggressive or ignorant of the neighbour-hood you are in, but you can’t be submissive and wait to be told what to do.”
The company currently has c330 members of staff, and is keen to continue to keep them engaged. Bishops says: “The majority of our staff, I hope, are happy. For the first time this summer we did a survey and sent them all a questionnaire. We asked them what they thought was good about the company, what they thought was wrong etc. It was quite open ended. I was slightly concerned that we would get a backlash, but the overwhelming response was that they liked working for Polpo, they enjoy the environment. I was pleasantly pleased with the result and from it we made some small incremental changes that have made them happier still.
“There is more to the relationship than remuneration. We are trying to encourage them that it more than just the salary. Its environment, autonomy and personal growth so they can go on and have a career in the sector.”
