There has been an undeniable appetite for the restaurant industry in 2015. February marked the £250m acquisition of Italian chains ASK and Zizzi, which came on the back of the pair achieving a ten per cent sales increase.
This is due, in part, to consumers paying an increasing amount of attention to the luxury of embracing hospitality. Data from Visa Europe in April found that there was a 7.1 per cent increase in the amount British consumers are spending on eating out, hotels and bars.
The other part responsible for the growth of ASK-Zizzi, which is now owned by private equity firm Bridgepoint, was an ongoing “transformation” to offer a modern design and complementary menu to reflect that.
Bowmark Capital first invested in Las Iguanas back in 2007, at which time the business had just 14 restaurants, with most sites in the South West. Under the private equity firm’s watch, however, the Latin American chain has almost tripled in size to open restaurants as far afield as Aberdeen.
That growth has resulted in the arrival of 1,200 new members of staff, helping to cater for the three million customers visiting the venue each year. According to Bowmark, the £85m sale of the company has generated the company a fourfold ROI.
Ron Pearson, Bowmark partner, said: “Las Iguanas has delivered strong like-for-like sales growth throughout our ownership, even during the recession. We have worked closely with the business to achieve a truly national footprint and this success is a tribute to the quality of the management.”
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Zomato is a fine example of how significant the food industry is, as the restaurant finding service wins when its clients do. Real Business spoke to the company’s UK CEO Kimberly Hurd in February, and she explained that independent venues are struggling to compete with chains which is why it offers a selection of promotional tools to unlock new revenue streams.
“Chains are taking over more and more because they’re the only ones that can afford the real estate, so they develop a portfolio approach,” she explained.
London alone has more than 23,000 restaurants to choose from, making it clear there’s an absolute need to stand out from rivals. It appears Las Iguanas’ growth is the result of forging a niche for itself to indeed adopt the “portfolio approach”.
“We wanted to create something special, something alive, that made people feel good about themselves and feel good about life in general,” said founder Eren Ali of the brand’s ambition. A Happy Hour that runs for the majority of the day is certainly a good strategy.
Las Iguanas launched in 1991 and growth was comparatively modest before the arrival of Bowmark. New owner the Casual Dining Group (CDG) will look to supercharge the steady expansion even further as it enters a new cuisine territory.
CDG’s French-themed Cafe Rouge counts over 95 locations, while Bella Italia boasts more than 90 restaurants. Elsewhere, the firm also owns smaller scale properties with Belgian brand Belgo, which has five locations scattered around London, as well as one-offs with Italian Amalfi and British bar and restaurant Huxleys.
The Las Iguanas deal will see CEO Mos Shamel stay in command, although founder Ali will relinquish his role as executive chairman.
“The business has never been stronger,” Ali said. “It has been a privilege to work with the team at Las Iguanas and Bowmark Capital to build such a strong brand. I have every confidence in the potential of the business and look forward to seeing it flourish under its new ownership structure.”
Jamie Oliver is currently in talks to sell shares of his restaurant empire to further growth and based on the results Bowmark has achieved for Las Iguanas, he’s got the right idea.
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