The rags to riches story of Comptoir Libanais founder Tony Kitous is inspirational – and, as Dominic Walsh discovers, he is worthy of such good fortune. But the Algerian still has big plans including the openings of more Comptoirs and Shawas, using the £8m war chest gleaned from a recent IPO.
Tony Kitous, the founder of Comptoir Libanais, is an inspiring figure. When he came to this country aged 18, he had only £70 in his pocket, spoke not a word of English and ended up spending his first night at Victoria station. The self-styled Algerian street boy, who at eight years old, had started selling his mother’s food to football fans outside his local stadium, spent the next three months in a north-London squat, working two to three shifts a day as a pot washer in restaurants. Despite working 18 hours days, he insists it “barely felt like work because I was enjoying the restaurant business and I was driven by the love I have for it”.
In a demonstration of how far such enthusiasm – and hard work – can get you, by the time he was 22 he was able to open his own first restaurant, Levant, on Wigmore Street, then in 2008 he opened his first canteen-style Comptoir outlet, designed to be “accessible to everyone in terms of affordability and atmosphere, but most of all a place that would celebrate the warmth and tastes of our culture”. So on top of the hard work and ambition was overlaid a layer of passion and authenticity that one finds in the very best businesses.
When I met up with Kitous and Chaker Hanna, the Comptoir Group chief executive, at one of their restaurants just before the group’s recent stock market flotation, that boyish enthusiasm was still as strong as ever. The Algerian seemed genuinely delighted not only to share his story, but also to introduce me to the delights of the Comptoir menu (although as it was Ramadan it was left to the equally enthusiastic Hanna to take me through the delicious menu – and insist on opening a bottle of the fabulous Lebanese wine Chateau Musar).
Deserving of success
I have met plenty of entrepreneurs who have crystallised large fortunes through stock market flotations or private equity or trade sales. Yet none has struck me as being quite so deserving of success as Tony Kitous, who cashed in £5m of shares at the IPO price of 50p then watched as the shares leapt to 69p, valuing his remaining 52% stake at £35m in the early days of trading.
Even more remarkable is that this success story was almost killed stone dead by the recession. In 2009, Kitous ran into severe financial problems and he only managed to cling on to the business by closing two of his four Comptoir units plus Kenza restaurant in Liverpool Street and putting his two companies through company voluntary arrangements that paid out just 4.7p and 5.6p in the pound to creditors who were forced to write off a total of £3.27m.
It was a painful lesson, but one from which the ambitious Algerian learnt quickly. Within months he had appointed Hanna. Not only was his new colleague Lebanese, but he was also an experienced restaurant industry executive who had worked with brands including Chili’s, Pizza Hut, Bella Italia and Romano’s Macaroni Grill. The move allowed Kitous to focus on the role of creative director, while Hanna took over responsibility for the management and strategic direction of the group.
The £8m of new funds raised in the IPO will enable the duo to take the business to the next level. They expect to use the proceeds to open at least eight more Comptoirs over the next 18 months and two more Shawa units with a target of having at least 50 restaurants within the next five years, up from 15 currently.
Some people I’ve spoken to have expressed doubts, not only over the punchy valuation of the IPO (although at time of writing, the shares had weathered the post-Brexit vote storms and were still trading at a 10p premium) but also over the brand’s appeal. The valuation point should take care of itself, and if the group’s expansion plans are curtailed, the shares should shed their racy multiple. As for the appeal point, I’m not sure that holds water. When I met up with Kitous and Hanna, they were insistent their customer base was broad and, sure enough, during the hour we spent together, the restaurant filled with customers including a pair of students, two besuited businessmen, three girlfriends having a Sex and the City-style glass of wine together, a romantic couple, a family of tourists (possibly Italian) and two Arabic women wearing hijabs. How much broader can you get?
The other point worth making is that, given the market uncertainty, not only in the aftermath of the shock Brexit vote but also in the weeks and months leading up to it, it is remarkable Kitous and Hanna got the IPO away at all, let alone securing a premium to an already generous valuation. After all, there are plenty of excellent companies that have been forced to put IPOs on ice, including Stonegate Pub Company, Pure Gym, D&D London and Hollywood Bowl.
Mind you, it helps when you’ve got the Kaye family – who have a stake in the business and know a thing or two about building and floating restaurant businesses – backing you.