Twists and turns

The travails of the Ed’s Easy Diner brand may come to be seen as a case study for the correction in the casual dining market.

Just five years ago, the management team at Ed’s was talking up the possibility of 150 sites across the country in a market seemingly ripe for informal eating out options. As the group initiated a beauty parade for would-be investors (with a rumoured price tag of £90m), it signed a flurry of leases for future development as well as partnership deals to capitalise on locations in the growing travel hub market.

But, when the music stopped, the downfall of a once vibrant brand was fairly ignominious. A CVA was avoided in 2016 before it was acquired in a pre-pack deal by Boparan Restaurant Group (BRG), in favour of informal talks with landlords and the brakes were well and truly put on the rollout. As a succession of management teams tried to steady the ship, there was little evolution of the brand’s offer, which has struggled in an ever more competitive market and amid rising consumer expectations.

With the planned seven closures as part of the CVA for Giraffe Concepts Ltd, the Ed’s estate will have sunk below the 20 mark. While it is understood that parent company BRG intends to keep the brand, it would seem unlikely that this is the end of the closure/conversion plan, with the brand’s flagship Soho site already flipped to a Slim Chickens.

While BRG is understood to have gone through the motions of finding a buyer for the brand, and sister concept, Giraffe, there seemed an inevitability that the process would move to a CVA. A half-hearted brand refresh was attempted last year, in which the company itself kept forgetting that the “Easy” was supposed to have been dropped from the name, and a retail range was launched. It all felt like sticking plasters for a wider problem.

Giraffe, equally, has had little momentum since BRG acquired a brand that Tesco seemed to have little idea what to do with. Various brand extensions have been trialled, including Burgers & Cocktails and Giraffe Stop!, but the core brand has remained a prime casualty of the difficulties of the high street. The CVA process will see it lose almost 50% of its estate.

If the CVA is successful, BRG is thought to be willing to invest £10m in the remaining Ed’s/Giraffe estate to attempt to stabilise the brand, with trade at these sites thought to be stable.

It is thought that the process has been entered into with the support of landlords, and no significant objections are expected when the vote takes place on 21 March.

The management team at BRG, who deserve credit for the handling of a very disparate estate of brands at different stages in their brand evolution, will be keen to manage this process sensitively and move on to growth opportunities in other areas, with a return to the expansion trail for Fishworks, with a Covent Garden site secured, and a strong pipeline for Slim Chickens.

In Ed’s, meanwhile, there remains a book to be written on how a brand can rapidly go from boom to boost.

More changes at the top

While it is the brands that are the focus around BRG, for the UK’s two major casual dining players, it is the boardroom that is the focus of attention at the moment.

With Steve Richards’ decision to leave his role as chief executive of the Casual Dining Group coming just weeks after Andy McCue’s announcement that he is to step down from The Restaurant Group, it means the sector’s two flagship companies are without longterm leadership.

The task of replacing them with a suitable candidate will not be an easy one. As one senior recruitment executive put it yesterday: “Why would you risk your reputation by taking on a senior role in casual dining right at the moment? There will be egos that will be attracted to these jobs but the scale of the challenge will make most very wary. There are much easier options out there.”

Much has been written about those challenges at TRG – notably the juggling act of reviving Frankie & Benny’s and Chiquito while maintaining momentum at Wagamama.

I would argue that the headaches facing the next CEO of CDG are not quite as daunting, but the fact remains that the company is highly exposed to the downturn in the branded restaurant sector and weakening consumer confidence.

The £30m refinancing package led by KKR last year has stabilised the company’s finances but the question remains as to how ambitious the group’s backers are. The arrival of Rooney Anand as chairman, with the M&A credentials he brings, would indicate that there is an appetite to bolt on. Las Iguanas remains a brand with further growth potential but does the group need a game-changing acquisition to inject momentum back in the business? If so, who would be the target? Giggling Squid is an available brand with clear growth potential but has already all but ruled out a trade buyer. Where else can CDG turn to a fresh angle? The pub and bar sector may provide more fruitful pickings, and would play to Anand’s strengths, but the vibrancy of the sector will mean high expectations from vendors on what returns are available.

For now the focus will be on securing a replacement for Richards, one of the most high-profile leaders in the sector. His departure is thought to have been amicable and while speculation will inevitably point towards Anand taking executive control, that is not thought to be a long-term consideration.

If internal candidates are being considered, then chief operating officer James Spragg will surely be top of the list but there are no shortage of external candidates who will inevitably be linked. Both ex-Wagamama boss Jane Holbrook and Greene King’s COO Richard Lewis have been mentioned in connection with TRG and their names came up again yesterday in speculation about CDG. Both seem unlikely and it should be noted that Lewis is still firmly in place at GK. Other names suggested include SSP’s Kate Swann, who was strongly linked with the Greene King role last year, ex-Carluccio’s bos, Neil Wickers, and Jason Cotta at Costa. 

Whoever takes on the mantle at TRG and CDG will be leading the charge to re-establish casual dining’s place in a much-changed consumer landscape. It will take a broad range of skills, and no shortage of confidence, to take on the challenge.