Emphasis on the theatre of food is all around these days, with open-plan kitchens the norm and the word ‘eatertainment’ firmly in the restaurant-world lexicon. John Gater, CEO of Coal Grill & Bar restaurants owner Charterhouse Leisure, takes the performance analogy so seriously, he still suffers from first-night nerves: “I still don’t sleep the night before an opening and I feel sick for the first week,” he confides.
He’s going to have to get used to tiredness and nausea again this year, as the currently nine-strong casual-dining chain is expecting a growth spurt that will see it more than double in size within the next three years. The gestation period for this rollout programme has been longer than was originally intended when Gater launched the first Coal under the current ownership structure in 2007, but he is happy with that – now.
“I was disappointed we didn’t move quicker during 2010, 2011 and 2012, but with the benefit of hindsight, we are still here and we have done well to have taken the cautious approach,” he explains.
The numbers back Gater up. Sales at the group reached £8.4m in the most recent financial year, with Ebitda up 13.2% and bank debt reduced by 50%.
Average weekly turnover is between £30,000 and £40,000 per restaurant; each restaurant costs about £800,000 to fit out from shell and the payback period is 36 months. Return on investment runs at about 34%.
Expansion plans
Charterhouse now has the funding in place, from its venture capital backers Beringea and Octopus and from Barclays, to push ahead with the expansion of Coal. Openings are scheduled for Gloucester Quays in June, Cardiff in September, Swindon in November and another Coal outlet “close to London” before the end of the year. In addition, Gater says he has agreed four of the six deals for next year and that by the end of 2015 the company will be trading from Manchester to Brighton (he has decided against opportunities north of the border for now, as the travel would be too much of a stretch with this size of company). All new restaurants will be in cinema and retail-led locations.
“We like to go to somewhere with a high footfall and you get that in these centres with cinema and shopping – we can then trade every day of the week except Christmas,” Gater says.
Having said that, he believes the brand would work on the high street too; he’s just not prepared to expose the company in that way until the chain reaches 20 to 25 sites, and before then there will likely be a review of all the usual options for the future direction of the company, such as an IPO or taking over another company.
In the meantime, it’s full steam ahead for the brand. In a bid to quell Gater’s opening-night nerves, the company now has a hardy team of five staff – two for the kitchen, two for front of house and one for the bar – who report to the operations manager and are dedicated to new openings; they will go and work in each of the new sites to help with the six week programme of pre-launch induction and training. Gater admits this is a more costly way of doing things, but says it is worth it. This method was first implemented when the Milton Keynes branch opened last December after an almost £1m investment to create refreshed look, which will be used for all future Coal restaurants. Gater, who remains in charge of all new sites for the first month, says the restaurant was exceeding budget targets within two trading weeks.
Food in the limelight
The new design, with its hot-coal inspired wall features and gas-driven fire bowl, reflects Gater’s fondness for theming, first indulged when he launched the now defunct Ma Potter’s restaurants (sold at 16 sites to Tragus for £14.5m in February 2006).
His first branded chain, Ma Potter’s, was built around a fictional character he dreamt up and staff uniform was designed accordingly by a theatre costumier. The staff didn’t enjoy wearing the costumes and the theming was eventually toned down. Gater has since learned to keep the elements of fun and recognisability in his current brand, but without having the restaurants too identical or the service too staged. Coal is the result of an experiment after a flood at the Cardiff Ma Potter’s enabled him to try out a different idea that would better appeal to the location’s more drink-led market. Tragus bought that site but Gater kept the brand and the other Coal that was then trading in Wimbledon (recently sold to Wahaca, which made an offer too good to refuse).
Food is the star at Coal today, with quality ingredients freshly cooked to order and at reasonable prices resulting in an average spend of circa £7 during the day and £18-£19 in the evenings including drinks, with the sales mix 65% in favour of food. There are dramatic flourishes such as the signature ‘firesticks’ – long skewers of meat or fish brought out on a wire stand and taken off the skewer at the table by the server.
Strong performance
Gater’s first taste of such interactivity between food, server and customer, from an operator’s point of view, was at his first restaurant venture, the Inn on the Quay in Emsworth, Hampshire. To the astonishment of his successful construction business owner father and the concern of his wife, Gater left the hotel industry (a summer job at Claridge’s led him to study hotel management, then work at the Montcalm, Marble Arch, followed by jobs with Hilton and Holiday Inn) to buy a listed sailing club by selling his house and car. This outlet became the Inn and after 20 months of very successful trading he sold it and was able to buy a home and a former tea room in Shere, near Guildford, Surrey, which he turned into La Chaumière, a soon highly acclaimed restaurant.
After this, Gater first converted a bankrupt pub into another successful restaurant near Guildford and then bought a small group of brasseries around Surrey, which led him to London where he created Ma Potter’s, sold the brasseries and brought in private equity.
One of the particularly strong performers for the original Inn was its Sunday lunch, which regularly turned tables four times. Gater says the reason for its popularity was the carvery trolley which was wheeled round to the tables where his Scottish chef, in full whites, carved the meat at the table.
Gater himself seems a little reluctant to stand in the spotlight. He is concerned he is talking too much about himself during our interview and does not want to sound arrogant. In fact, he comes across as a very affable, gentlemanly character who has got on with the business of running restaurants without any fuss, being willing and able to learn as he goes.
“I have always been very entrepreneurial,” he says, “and to not be involved in the intricacy of brand development would absolutely kill me. But after we built Potter’s, and now with Coal, I have realised you can often delegate to people – and, to be honest, they can do it better.”
Open to new ideas
Meetings of managers and chefs, both held monthly, aid the open culture of the business, while Gater himself is at pains to ensure that staff feel comfortable talking to him and the result, he says, is that the group is “very good at not being blinkered about what we are doing – we challenge everything and constantly come up with ideas to improve things.”
One example is the introduction this year of kids’ parties during weekday afternoons. At the time of speaking, these were still under development, but Gater said they would include an element of children creating their own food, as has proved successful at PizzaExpress.
One decision is to introduce two new characters: Captain Coal and his daughter, Coalette – and in true theatrical style, they will have full costume.
