We are building restaurants to last several business cycles... it shouldn’t matter when you build them”
DES GUNEWARDENA peers into his wine glass and wrinkles his nose. The chairman and chief executive of D&D London has invited me for lunch at the Angler, the group’s new seafood restaurant at South Place Hotel in the City where the sommelier is waiting for a verdict on the wine.
Gunewardena, impeccably dressed in a dark navy suit and a tieless white shirt, has asked the sommelier “to surprise him” but looks unconvinced by the choice. He declares it “too appley” before the sommelier disappears to brush the dust off another bottle.
This attention to detail befits a man running some of London’s most elegant restaurants, including Coq d’Argent and The Grand Café at the Royal Exchange. And it also speaks volumes about the far-reaching ambitions the Sri Lankan-born 55 year-old has for the business.
Gunewardena is in the process of orchestrating the sale of a large chunk of the restaurant group in a deal that will pave the way for the next stage of expansion.
LDC, the private equity arm of Lloyds Banking Group, is the frontrunner to acquire Sir Terence Conran’s 51 per cent stake, plus the 18 per cent owned by private equity firm Caird Capital.
Gunewardena, however, has no intention of cashing out just yet. Management, led by himself and managing director David Loewi, will retain the 31 per cent stake they acquired in a management buy-out in 2006.
It is a momentous period for the group. The sale will effectively see Sir Terence relinquishing his control of the empire he founded two decades ago. And it ushers in a new era for the business under Gunewardena’s continued leadership.
He won’t say more about the deal until the ink is dry – expected to be early in the New Year – except that a new investor will inject the fresh capital needed to drive further restaurant openings overseas and in London.
D&D has powered ahead with openings in the capital, particularly in the City, where Gunewardena believes there is a growing appetite for a more dynamic restaurant scene.
In September, D&D opened the Old Bengal Warehouse, a restaurant venture off Bishopsgate on the site of an old East India Company warehouse.
Two weeks later it also opened the South Place Hotel (see review below) marking the group’s first hotel since it developed the Great Eastern near Liverpool Street in 2000, now owned by Hyatt Hotels. And the group has no intention of slowing down, with another venture shortly to be announced in the New Year.
“London is still the most exciting place for food bar none,” Gunewardena says. Business at both ventures has been good so far and hotel bookings have also been robust.
“We are even more convinced, given the success of the South Place hotel, that in the future we will develop a nice boutique hotel business to sit alongside our restaurants,” he adds confidently.
But what about the four years of recession, jobs cuts in the financial services sectors and the consumer spending squeeze? “The triple dip shortly to be quadruple dip?” he mocks – and insists there isn’t a better time to push ahead with projects.
Gunewardena has worked with Sir Terence since the start of the business in 1991, when the design guru left retailing behind for eating out.
D&D, which has 30 restaurants in UK and overseas, will open in Istanbul and in Leeds next year.
“We are building businesses we hope will last from 10 to 20 years. You are building restaurants to last through several business cycles so it shouldn’t matter when you build them... You have got to be able to survive the bad as well as the good times,” he said.
Hopefully for Gunewardena it will just be good times ahead, with the right choice of wine to celebrate.
CV: DES GUNEWARDENA
Background: Born in Kandy, Sri Lanka until the age of seven when his family moved to the UK
Education: Wimbledon College, London; studied economics at Bristol University; qualified as a chartered accountant with Ernst & Young in 1981
1978 to 1984: Worked at Ernst & Young where he qualified as an accountant.
1984-1989: Joined Heron International where he was responsible for financial planning
1991: Joined Conran Holdings
1995: Took over as chief executive of Conran Restaurants in 1995
Family: Married, with two children
Hobbies: Tennis, skiing and cricket