Various Eateries, the owner of restaurant chains Strada and Coppa Club, is planning to raise £25m through an AIM listing as it seeks to buy competitors that have fallen victim to the coronavirus crisis.
The firm, which was founded by Hugh Osmond, who led the rapid expansion of Pizza Express, is aiming to expand by snapping up distressed brands that have buckled under the pressure of the pandemic.
Various Eateries plans to list on AIM at the end of this month or early October to raise £25m to buy struggling restaurant chains.
It said a significant number of casual dining competitors were closing sites following the coronavirus lockdown, presenting an opportunity to roll out its Tavolino and Coppa Club concepts.
Osmond said today that there are a “number of well-known brands out there that are struggling to navigate the pandemic and various other industry pressures”.
“Should the right opportunities present themselves, we would consider supplementing our organic growth through acquisition, offering distressed brands a more sustainable future as part of the group,” he said.
Various Eateries is also eyeing cheaper rents, saying turnover-based rental agreements will become more common as the economic fallout of the crisis continues.
This week Pizza Hut announced it would close 29 restaurants following the lockdown, while Pizza Express has previously revealed plans to shutter 73 sites.
The Casual Dining Group, which owns Cafe Rouge, Bella Italia owner Azzurri Group and Carluccio’s have all fallen into administration during the pandemic, although parts of their businesses were later rescued by new investors.
Julie Palmer, a partner at restructuring specialist Begbies Traynor, said it is likely that more businesses will follow suit and take advantage of the economic disruption caused by the pandemic.
“Within every sector there are those prospering,” she said.
“There are always customers available, it is only the trick of getting their attention that becomes harder. With this move Various Eateries is seeking to buy low, grow high and reap the rewards.
“Within every crisis there is opportunity and Various Eateries can expand its own business while offering others a lifeline.”
Palmer added: “High-paced acquisition will only be the start of the work. Various Eateries will still have to operationally transform these businesses to make them sustainable.
“Altering structure through home deliveries and click & collect orders, learning to create profit while complying to the government’s new ‘rule of six’ and finding ways to break free from heavy reliance on a co-dependent relationship with high street retail will be just some of the challenges ahead for anyone moving into the casual dining sector.”