Expanding SFI revamps Bar Med and Slug and Lettuce

SFI Group is stepping up expansion as it carries out a revamp of its Bar Med and Slug and Lettuce bars.

It plans to open 30 new outlets over the next 12 months after opening 24 in the previous year - an increase of 25 per cent.

But chairman Tony Hill (pictured)​ admitted that it had failed to get the locations and offer right at some of its Bar Med sites.

He also said that it was testing a new look to the Slug and Lettuce concept that it bought last year.

SFI's confident plans for growth were revealed as it reported a 67 per cent increase in pre-tax profits to £16.4m for the year to May 31.

Mr Hill said: "The land bank to support the group's organic growth through new openings is stronger than ever. The platform for the business to continue its historic rate of growth is in place and we are confident of continuing to deliver in future."

Last year, it opened 12 more of its high street pubs branded as The Litten Tree, increasing the chain to 45. Their average net weekly sales were £17,689 while like-for-like sales were up by 5.4 per cent.

Bar Med expanded from 22 to 31 sites, but Mr Hill admitted that the chain's performance had been "uneven, ranging from outstanding and industry leading to disappointing".

He explained that SFI was evolving the bar brand after trying to stretch it across too many trading styles.

"The brand's real potential is not as a modern continental-style cafÈ-bar but a large multifunctional bar offering quality daytime food and a mainstream late-night entertainment venue in which to party," he said.

"Where we got it right, Bar Med is proving to be consistent and exceptionally profitable. In a few cases, it is clear that we made wrong location choices and we will consider rebranding these sites in the future."

He said Slug and Lettuce, which has grown by one site to 32 since last year's deal, was "well established with strong brand awareness".

But, after a revamp by its previous owners in 2000, SFI is now testing a "new-look brand template" in a sample of outlets under the code name of Slug 2001.

The new Fiesta Havana bar in Liverpool has established the template for developing its Latin bars, which it bought from Capital Radio Restaurants two years ago.

"It is trading considerably above expectations, and there is an excellent prospect that the new name will be appropriate as an identity to brand the other Latin bars," Mr Hill said.

SFI continues to hold on to the tableside dancing venues For Your Eyes Only after talks to sell them fell through earlier this year.

It is believed that the clubs' management team came up with a buyout offer, but Mr Hill said it was now looking for an "alternative exit".

"Discusssions with parties interested in acquiring the business have not achieved the shareholder value we believe is appropriate, primarily due to difficult market conditions in raising private equity finance," he said.

The four venues have been transferred into a separate company, ringfenced from the rest of SFI's business, with a new board of directors and chairman.

"The directors of the new company are in the process of raising bank finance for the development of its business at arms length from SFI," Mr Hill said.

Trading across the whole group, which now has 143 branded and unbranded outlets, has been "encouraging" in June and July.

Over the previous 12 months, SFI's turnover was up 87 per cent to £115.2m while earnings before interest, tax, depreciation and amortisation (EBITDA) was up 80 per cent to £28.4m.

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SFI "close" to sale of tableside dancing venues (May 13, 2001)