Steve Richards, CEO of Casual Dining Group, has said that the group will look to acquire more brands and sites to scale its business.
The company bought La Tasca last year, primarily for the attractive locations of sites, and reduced the number of restaurants trading under the La Tasca brand from 44 to eight, replacing them primarily with Bella Italia restaurants.
Speaking in regards to the site acquisitions, Richards said: “The conversions of the [La Tasca] sites into Bella Italias and everything else we’ve put into those sites have been fantastic for us. It was the sites that did it for us. And there will be more of that.”
Richards admitted the potential implications of Brexit were a concern given that, like other restaurant chains, it employs a high number of staff from EU countries, but said it had not deterred from expansion.
“Until the situation is resolved it will be unsettling for investors. What we have decided to do is buy more brands. It’s a good time to buy and to scale our business.”
When asked about CDG’s purchase of Las Iguanas and whether the group would be looking to buy any more similar brands, Richards said: “Las Iguanas was about the right size, the right size chunk. We bought it with 37 sites and it has now got 57, so it’s grown very quickly and it generates a lot of cash whilst not sucking in a lot of cash.
“But equally we’re setting up an innovation fund – an incubator fund as we call it – to find small sub-scale brands of around five or six sites. And if we can pick a few winners we’ll put them in this fund, back the management team and help them grow.”
Speaking on the reasons for Las Iguanas’ success, Richards commented: “Fundamentally, it’s a very, very well defined brand and it’s got a great management team. We didn’t synergise it and rip the heart out of that business, we backed the management. A combination of a great brand, great management and a scalable business.
“We’ve just taken it from the high street and put it into leisure parks, which opens up another 100 sites. Also, it’s franchising, so we’ve signed deals in the Middle East for it. The flavour of the food is very attractive to the Middle East, so we can see the sustainability.”
Steve Richards was speaking at the Lunch! show at the Business Design Centre in London last week.