Suddenly Bay Restaurant Group seems an appropriate name. Having been tossed about in some choppy financial seas, with its future looking uncertain, chief executive Paul Symonds has steered his ship into calmer waters.
The debt-for-equity deal he brokered with banks Kaupthing and Commerzbank concludes one of the more turbulent periods in UK restaurant chain history, and secures Bay’s financial future until at least 2012.
It’s the second financial restructure Bay has been involved with in the past 18 months; the first occurred when a controversial pre-pack administration split Laurel Pub Group into two companies – Bay (consisting of La Tasca, Ha Ha and Slug & Lettuce) and the pub-oriented Town & City – while sloughing off 90 underperforming sites. Symonds was chief executive of Laurel back then. When pushed to comment on the pre-pack, he responds: “While it was an extremely difficult time for everybody, we protected 6,500 jobs. I think that’s rather important.”
Given Bay’s history and the improvement of its financial position, it’s perhaps not surprising that Symonds is keen to talk about the future of his company rather than the past. “The restructuring is now done. It means we’re properly financed till 2012 so that gives us plenty of time to see the back of this nasty recession and get the business growing again,” he says.
While market conditions remain tough, the Bay business has already been in growth for a number of weeks, adds Symonds. “We’re completely focused now on driving our operating standards. The whole team is working hard to make the guest experience better,” he explains.
But what does that mean in practical terms? Well, at La Tasca, there’s a significant menu redevelopment programme in progress. The brand’s central kitchen was closed in February and food production switched to the individual sites. The difference – fresher food – is noticeable. It’s been a considerable commitment. “The training investment in the kitchen has been absolutely huge,” says Symonds. “It takes a long time to grow the skills and the teams to do the volume of food we do. So it’s been a big journey for us over the past 18 months. But the stuff we’re serving’s getting fresher and fresher, and as we up-skill the kitchenswe’re getting more adventurous with what we’re prepared to put through the engine room.”
Without doubt, the food is a major improvement on what I remember the last time I ate in La Tasca, three or four years ago. Symonds agrees there used to be an over-reliance on fried food. Now the menu is lighter, fresher and offers considerable variety.
The seminal tapas dishes you’d expect to find are still there – chorizo, albondigas and patatas bravas – but how about fresh Scottish salmon served on a bed of wilted spinach with raisins and pear? Or Romano pepper stuffed with vegetables and cous cous with a tomato sauce and honey?
The menu will continue to evolve. Symonds has just sent his team on a food tour of Spain to look at regional food. “Spain is such a vast country with such diverse styles of food,” he explains. “We’re now looking at regional variations and at how we start to bring some of those ideas into the menu.” Ha Ha has also undergone a menu makeover and is currently the star-performer within Bay’s portfolio. It’s surely no coincidence that Ha Ha’s success has occurred just as the chain is being rebranded and converted - from Ha Ha Bar & Canteen to Ha Ha Bar & Grill. The kitchens have been upgraded and food has taken centre stage. "We're pitching the food at really quite a high level but we're charging low prices," says Symonds. "So the customers are getting tremendous value for money. The business is really taking off."
Along with operational improvements, Symonds is also looking to expand: “We’re actively looking for sites now because there are a few – not loads – a few really good opportunities that are starting to throw themselves up.” There are currently 77 La Tascas in the UK (with a further five in Washington DC). Symonds believes the brand can grow to 150. If that seems a bit conservative in the long-term, he explains that he wants “to keep the quality of the restaurants really high”. He also plans to double the 25-strong Ha Ha brand – “we need a bigger venue for Ha Ha because we’re trying to do more things in the building.”
Of Bay’s three brands, the less food-oriented 85- strong Slug & Lettuce has struggled the most. Tellingly, Symonds’ plans for Slug’s expansion are less ambitious – “the early hundreds” – but, as he makes clear, his roll-out plans are dependent on availability of good sites; all his brands, even Slug going forward, require decent-size sites for success.
“A restaurant that has 40 covers may work in fine dining, but it doesn’t work in my environment where I’m trying to create a particular atmosphere,” he explains. “I want to have 130, 140 people sitting down having their lunch or dinner, and then they get that whole atmosphere.”
With food quality so improved in La Tasca and Ha Ha, a major aim has been to get lapsed customers, and new customers, to sample the menus. A summer campaign to get people over the threshold at La Tasca has been very successful.‘We’ve had a fantastic response,” says Symonds. The deals being offered are very attractive indeed. A lunch of five tapas dishes shared between two currently costs £10 and, should you want, a bottle of house wine comes in for under a tenner. There’s also been a 50% offer being run with dinner; it requires customers to sign up to the La Tasca club. “It’s a big incentive,” says Symonds of the deal, “but they join our database and I get to talk to them. Yes, it’s a big investment, but at this point, while we are growing our audiences, I think that’s an investment worth making.”
Moreover, the operating landscape that’s emerged as a result of the recession means offering a good deal is critical if you want to ensure footfall. Symonds, who has spent his life in quick-service restaurants, fast-casual dining and pubs, believes consumer behaviour is changing and he’s never seen anything like it. “In all the consumer groups I’ve sat with over the years I’ve not seen people so articulate about how they’re modifying their behaviour,” he states. “These people are planning how they’re going to dine out, they have their little portfolio of offers and coupons that they’ve pulled off the internet and they’re discussing with their friends who’s going to get their business tonight. These are our core target customers that have decided they’ll put a bit of energy into their research. And they’re only coming if you give them a deal. That’s a new behaviour that we’re having to adapt our trading strategies to.”
Bay’s focus on special offers and its internet activity (regular communication with the thousands of customers on its database) means it’s adapting pretty well. La Tasca, Symonds reports, has seen strong growth in the last couple of months. Last week, its busiest restaurant took £90,00. “That was all on tapas,” smiles Symonds. “Can you imagine the washing-up?”