Exclusive: Richard Caring hits suppliers with mandatory ‘discount’ amid £1bn sale talks
The Richard Caring restaurant empire, which includes the Ivy Collection and Caprice Holdings, has demanded its suppliers take a 2.5 per cent “discount”, blaming “increased tax burden and cost of employment, cost of indirect products [and] services and also direct cost of food and beverage.”
In a letter dated 3 June, signed by Richard Caring’s head of indirect and beverage procurement Jeremy Evans, the company said: “Our businesses work hard to mitigate cost wherever possible in order to maintain value for money and relevance to their guests. If our businesses are strong and growing then we hope your business will also benefit. To ensure our businesses can remain strong we will apply a 2.5 per cent discount on supplier accounts at point of payment.
“This mandatory discount is being applied in response to the current increased cost of trading. We are asking all of our supplier partners to work with us as we support each other through this difficult period. The discount will be applied from the next available pay run and will remain in place until further notice.”
A spokesperson for the company told City AM: “The letter makes it very clear that if any suppliers have any concerns they should contact us and we will speak with them.”
The move comes amid rumours Richard Caring is in advanced talks to sell a £1b stake in Troia, the company behind the Ivy Collection, with Abu Dhabi royal Sheikh Tahnoon bin Zayed al-Nahyan understood to be interested, according to the Financial Times.
That sale could include a stake in London icons Annabel’s, the George Club and Harry’s Bar as well as the Ivy Collection, which operates more than 40 restaurants in the UK and Ireland.
Caring owns up to a 50 per cent stake in the business, with other shareholders including the former Qatari prime minister Sheikh Hamad bin Jassim bin-Jaber al-Thani.
One industry expert told City AM they believe the letter to suppliers could be a bid to improve margins to help bolster the company’s chances of achieving its ambitious sale.
Earlier this week Tomas Minkley, former operations director at The Ivy Collection, said he believed the Ivy’s expansion has harmed the reputation of the flagship restaurant. The Bob Bob Ricard chief operating officer told City AM: “I think you’d be foolish to think it hasn’t. The reality is everybody knows it has made a bit of an impact on the business. It’ll be interesting to see when the business is sold whether the original flagship in Covent Garden is part of that sale. For me, they’re two completely different businesses, and they should be treated as two different businesses.”
The restaurant business is going through an unprecedented squeeze on margins. This month restaurateur James Robson told City AM the current government is “absolutely killing” the sector. The Fallow, Roe and Fowl founder said: “This government has got rid of just about every international person with money… What they’ve done to business has absolutely killed us. They have scared the international wealth out of London.
“I would wipe out rates, literally wipe them out, because it’s just unfair. We’re competing with delivery companies who have a dark kitchen in a basement and don’t pay tax in this country. I would reduce VAT on food and beverage. And I would stop taxing the hell out of people that create employment.”
Michelin starred chef Tom Sellers echoed that sentiment in an exclusive City AM interview this month. When asked what challenges the sector is facing he said: “The work from home culture, people not coming into town, corporate money being clipped, people just feeling the squeeze generally with the base rate of interest, the National Insurance increase. There are so many factors. The world we find ourselves in, with inflation, cost of produce, cost of labour, we’re lucky if we make 10p on the pound.”