Thai Leisure Group wants to be recognised as the best in its field in the UK. The way the tide has turned when it comes to gaining finance in this competitive sector had led to the company’s desire to open more restaurants. Mel Flaherty finds out more
Rags to riches, romance, grit and determination, and triumph in the face of adversity – the Thai Leisure Group story has it all. For restaurant industry watchers, however, it is the next chapter that could prove particularly gripping.
Martin Stead, the chief executive half of the husband-and-wife team that co-owns the business behind the Chaophraya, Yee Rah and Thaikun restaurant brands, has a crystal clear vision for his company to, in his words, “own Thai in the UK”.
It sounds a bold ambition. Especially for a company that has, to date, proved itself only in northern England and Scotland, and is in a blooming market segment with a number of operators equally keen to grab the top spot, most of whom started in more traditional birthplaces for scaleable restaurant concepts, aka London and the south-east.
But Stead and his wife, Kim Kaewraikhot, chef director of the outfit, which now has 12 restaurants, have a habit of doing things differently and a track record in achieving what they want.
The fact that they recently secured £10m of funding from Santander to open the next 11 restaurants on the way to their medium-term goal of 40 restaurants in 40 months with turnover of £75m and EBITDA of £10m, gives you a flavour of how contagious their determination is.
The Spanish bank came through with an 11th hour deal that was too good to refuse despite Stead’s 18 months of liaising with Business Growth Fund, who, he is at pains to point out, were incrediblysupportive of the group’s aims.
“I don’t want to sound big headed, but there aren’t many restaurateurs who get to £27m turnover and £3.5m EBITDA with just bank funding as we have. And, not being flippant, but to get a bank to lend you £10m, they have got to believe in you,” says Stead of the deal, without a hint of insouciance or conceit.
Not, he emphasises, that it was easy to get to this place: “For the first six or seven years we were flying by the seat of our pants and, during the past 10 years, I have spent a lot of my time down on my knees asking for funding.”
He vividly recalls the opening night of their first restaurant, Chaophraya in his native Leeds.
He had used his flat as collateral for a £100,000 bank loan, borrowed money from his mum, and Kim had put in all her savings. They had run out of cash to complete the fit out so at 5pm on the opening night, he was painting the walls with his dad.
But the hardest part so far, he says, has been the transition from small company to a much bigger operation – the group now has 600 staff and, according to Stead, is the largest employer of Thai people in the UK.
“Finding sites, getting funding, getting the staff – that all comes with the territory but we have gone through real emotional pain to let go and let people fly,” he says.
In practical terms, this has meant building what at present is a top-heavy but foreseeable future-proof senior management team. As well as taking industry heavyweight Kevin Bacon on to the board, the group now also has a finance director, operations director, culture director, marketing director and area managers and is still in the throes of the “painful process of turning each restaurant manager into a business manager”.
Kim’s role has evolved into that of a development chef who also oversees detail to ensure the authenticity of the brands continues as the business grows, while Martin is responsible for the macro view, looking at the future direction for the whole company. Together, he says, they “sprinkle the magic dust”.
Both have come a long way from that first Leeds restaurant. Kim was recently shortlisted in the Entrepreneur of the Year category of the Women in Business Awards run by the Downtown in Business club, and last year was inducted into the Women 1st Top 100 Club. Her back story, though, is the stuff of movie scripts.
Her family was the poorest in their village in north Thailand. She left school aged eight and moved to Bangkok when she was 14, working in a sweat shop, making clothes to make money to send home. She eventually set up her own garment factory, but her real passion was Thai food so she launched an eatery on the main street in Bangkok, which is where she and Martin met. Together they recognised the opportunity to develop Thai restaurants in the UK and moved to Leeds in 1999, working hard to open their first restaurant five years later.
As for Stead, he left school at 16 with two CSEs, learnt the print engineering trade on a YTS then moved to his family’s tool manufacturing business. The whole Thai Leisure Group journey has been a big learning curve for him, but he attributes part of its success to the fact that he, and a fair proportion of his senior team, have come from outside the restaurant trade, giving them the ability to think outside that clichéd box.
One of the big lessons for him particularly, though, has been to rein himself in a bit. His creativity and willingness to experiment led to two other sub-brands, that will now not be progressed – the smaller, buffet format ChaoBaby operating at Manchester’s Trafford Centre and Meadowhall, in Sheffield (likely to be converted to Thaikun), and the Palm Sugar cocktail bar operating at four of the six Chaophraya restaurants. Also, Stead has previously gone on the record as saying that one day the group could create a Thai village concept in the UK complete with shops and massage parlours and may even look to create products to sell at supermarkets. Now the group is totally focused on rolling out its core brands – principally Thaikun, the casual-dining concept, with a couple more Chaophraya restaurant and bars (the group’s inaugural upmarket Thai brand, born 10 years ago in Leeds) along the way. Stead says Yee Rah – the bar and grill serving a mix of Thai and international dishes, conceived to suit the unit the group took on at the Liverpool One shopping, residential and leisure complex – is a work in progress and may also be rolled out to a lesser degree.
Overall about 90% of new sites will be Thaikuns, averaging 3,500-4,000sq ft each and with a fit out cost of about £800,000. Stead says turnover at the first two sites, which opened last year in Manchester then Aberdeen, is averaging £47,000 a week each, so it’s easy to see why that’s the brand getting the biggest push. Cambridge was due to open early June, the second of five, possibly six, restaurants the group plans to launch in 2015 followed by eight in 2016, and 10 in 2017, although Stead says his funding situation means there is no pressure to open if the right sites are hard to find.
He reckons Thaikun could open in London in about 18 months and has the legs to roll out to 120 sites UK-wide.
The day of this interview was the launch date of the firm’s most southerly restaurant so far, in Oxford. As with all of the group’s openings, nine monks from the UK’s Thai temples, which the business supports, came to bless the site and the staff. After the formalities, Stead takes a moment to have a walk about the site. He is in awe:
“The last time I saw this restaurant was in November and I let a team of people get on with creating Thaikun here. They have absolutely ruddy well nailed it.”
