Fast-growing restaurant and bar chain Loungers has ambitions to reach in excess of 500 sites in the UK and is already in locations that mass chains such as Costa and Wetherspoon aren’t, one of its founders said yesterday.
The company now operates 142 sites, comprising 119 Lounges and 23 Cosy Clubs. Its 143rd will open in Sheffield next week and it remains on schedule to meet its target of 25 new launches a year.
While many other chains have been reducing stores or implementing CVAs in the past 12 months, chairman Alex Reilley said the company had only ever shut four sites in its 17-year history – one of which was due to an expired lease – and remains firmly focused on expansion.
“The growth of the business has certainly been substantial but I think it is fair to say that it has been fairly measured. We have been quite deliberate in how we have managed the roll-out of the business and we are looking to continue growing at a rate of 25 sites a year, and we think there is the potential for up to 500 sites for us in the UK –100 for Cosy and 400 Lounges.”
Speaking at the Casual Dining Show yesterday, Mr Reilley said the business originally grew “very slowly”, with one new site a year in the early days. It then ramped that up to five a year, then nine, then 15 and then 20. It is now opening at a rate of one restaurant every two weeks, while revenues last year reached £150m.
“It might appear that we have not been around that long but actually we were doing our thing in the Bristol suburbs for a few years before anyone even noticed we were around. So we have been at it a long time.”
Mr Reilley said the chain’s business model was suited to small, provincial towns as well as big cities and while it is likely to expand into Greater London it has no plans to move into zones one or two because of the cost of rents.
“If you look at the amount of food programmes on TV, people aren’t necessarily cooking these things themselves but they are becoming educated on the food and they are aspiring for more. We come in with a broad offer and are not wedded to any one particular cuisine so we can manipulate our menus. We are reflecting trends that we are seeing at the moment coming out of London, for example, which means we can keep it very fresh without being pigeon-holed.”
Asked if Loungers could replicate what the likes of Wetherspoon, Pret and Greggs have done in building a chain with hundreds of outlets, he said: “In terms of scale, we can certainly break into that multiple hundreds locations in the UK and I think we have demonstrated that to date because we are in locations where Wetherspoons isn’t and we are in locations that even Costa isn’t in yet. I think that gives us great confidence that when we talk about the potential for 400 Lounges we think that is actually quite a conservative number.”