Joining fellow sector bosses Ricardo Guimaraes of KG Hospitality and Ed Devenport of Incipio Group at the MA Leaders Club meeting at BRIX LDN last week, all three said how they are continuing to expand their operations despite the challenging conditions.
On why Inception Group, which has 15 sites in London, including Mr Fogg’s, Cahoots and Control Room B at Battersea Power Station, is growing, Gilkes said: “The opportunities at the moment are huge. There are incredible opportunities and some sites are available at the moment that haven’t been available for years.
“Also with inflationary pressures, we’ve had to accept lower margins but growth is something you can do to counter that.”
On the launch of Cahoots Postal Office in Borough, Gilkes said Inception Group opened an underground bar 15 years ago in Soho. He explained the business wanted to think of a concept and decided “one of the few things we felt would work in an underground bar was creating an Underground tube station”.
“We created this whole narrative that these scoundrels had taken over this tube station, it was based in the 1940s and has traded very well ever since – it’s probably our best-performing site in the group.
“In 2019, the restaurant opposite became available so we created a pub upstairs with the narrative of the ticket hall – we very much try to build a collection, not a chain.
“Cahoots is set in this time period and we wanted to do something else with the brand and sent an email to our database and said, where would you like to see us open? Answer number one was London Bridge, answer number two was Borough. Then an old railway arch came available in Borough Yards so we created a whole narrative around a post office sorting room.”
He joked the site has confused many people because some elderly ladies came with six parcels recently and wanted them to be delivered! A gin and tonic on the house was given to each of them.
Attractive proposition
Meanwhile, Guimaraes – who is the co-founder and managing director of KG Hospitality, which operates Amazing Grace and the Dial near the O2 – agreed there is a lot of opportunity in the market right now and if you work with the right partners, you can develop something that is sizable to the footfall at a location and it means you can build your budget around that.
“If you believe in it and you work with the right team, it’s an opportunity you should take,” Guimaraes said.
Devenport, CEO at the seven-strong Incipio Group. Its venues include the Prince in south-west London, which is a lively sports-themed bar plus fine dining sites across the capital, said: “Because we operate multiple brands, we’ve positioned ourselves as a go-to point for developers and landlords.
“We’ve found, because we have different offerings – whether it be from fine dining to wet-led venues, and everything in between – we have become quite attractive in that proposition.”
He added being a multi-format operator is very appealing to landlords. “We’re, sort of, a one-stop shop for [a landlord] who’s looking to fill, say, 38,000sq ft – that’s where we want to be. For them, it makes a lot of sense having one tenant and from our side, there’s obviously a lot of economies of scale to come with that. It’s a key part of that growth.”
Devenport added Incipio still looks at larger format sites but added this is one of its strategies.
On its Bunga 90 venue in Covent Garden, Gilkes said Inception opened Bunga Bunga in 2011, which was a fun venue with live entertainment, people singing karaoke, “not only in private rooms but to the whole venue”. However, it suffered during Covid as costs got higher so the pricing had to increase and it was “tricky” to get the footfall.
The new strategy was to relaunch the venue while retaining the fun factor, the pizza offer and the karaoke but to make it more ’90s-based.
The live entertainment has been dropped in favour of a DJ and the ground floor was converted into a ‘video store’ with ‘Be kind, rewind’ signs and a machine was introduced that creates a popcorn smell. When a guest goes through a vending machine, they “time travel back to the ’90s”.
Exceeded every expectation
Gilkes explained it was difficult to choose what to do with the site, including whether it became another Mr Fogg’s or Cahoots or even hand the keys back.
“Bunga had so much goodwill and was well known so we decided to give it another shot. It’s a big bet but it’s exceeded every expectation.”
He added the nostalgia for ’90s is strong – even Chris Moyles presented his radio show live there last month (February) – and Gilkes said: “It’s been a real success. It’s much more accessible. People pop in for a beer whereas before you had to really commit to the whole live show so it’s been a twist and an evolution of a brand in a way that we’re really happy with.”
On whether prime sites are worth the cost, Guimaraes explained sites are worth their premium but there are factors that need to be considered. Its Amazing Grace site near London Bridge station has live music every night – and the costs are “huge” but the market is there.
He explained: “It’s doing amazing. The whole area has grown. I’ve been working in the area for 10 to 12 years on other projects and just having that destination and being able to have live music, that adds value. The opportunity is still there.”
He added KG Hospitality has opened a second Amazing Grace – in Canary Wharf – which is “a much tougher site to run because it’s not traditional; Fridays are dead but Thursdays and Saturdays are huge. It’s really about getting your name out there and being able to push that. You can [create] an opportunity if you have a good product to sell.”
On the biggest operational risks for opening a site, Devenport said it always comes down to the quality of the team and there are a lot more people applying for the roles that are available.
“We’re trying to really work out who are the best people for those roles.” He said. “What are their superpowers? What are they going to bring to business and help drive it forward?
“It’s really important to get that recruitment right, particularly in this market.
“When times are very good, it is very hard to grow because the opportunities just aren’t quite there. When times are tough, which they are now, you tend to see more opportunities in your market. It’s about holding your nerve and not jumping the at the first thing that comes your way.”
