Business Profile: Busaba Eathai

By Mark Wingett

- Last updated on GMT

Busaba lured Jason Myers back to the UK
Busaba lured Jason Myers back to the UK
Under CEO Jason Myers, Busaba Eathai has been reinvigorated and is now making a serious play to become the nation’s foremost Thai restaurant chain.

Happy and successful in the Middle East, Jason Myers was determined not to return from Dubai unless the opportunity that presented itself was irresistible. So when the chance to ensure Busaba Eathai fulfilled its undoubted potential and, even one day, make it as big as Wagamama arose, it was tempting enough to get him on a plane.

Myers was more than a little familiar with the Thai chain before joining it as CEO back in July 2014. He had been a long-time admirer of its creators, Hakkasan founder Alan Yau and his wife Jale Erentok, who had headed up the business for 14 years when Myers joined.

A previous stint at the then Gondola Holdings-owned Zizzi had also seen Myers and boss Harvey Smyth run the rule over Busaba as early as 2008 when it operated just three sites, before it was bought by Phoenix Capital in a deal valued at £21.5m. “We just saw a massive opportunity for it,” he says. “We used to come here all the time and stand in the queue like everybody else.” Some things are just meant to be.

Myers experience is varied, encompassing everything from marketing to operations to managing director roles at companies including Spirit Group, Greene King, Zizzi, and most recently Jumeirah Group, as vice president of Worldwide F&B operations, and managing director of Jumeirah Restaurants, the Dubai-based hospitality company. With 21 years in the hospitality industry, he is well placed to talk about building businesses for growth.

The opportunity to run Busaba, he says, was pretty much the only UK job offer that could tempt him home. “I enjoyed the international scene. To come back, the opportunity had to tick a lot of boxes. There was a gap in the market for the cuisine and it is a brand I admired, with longevity and strong funding.

“It had been consolidating and needed someone to take it to the next level. Busaba hadn’t achieved what I think the ambition for it was. It had done well with 12 sensational sites, but needed to take that next step. It was turning over around £35m in the casual-dining market from those 12 sites. Not many people are doing that, if any.”

A re-energised brand

There is much activity in the UK Thai chain sector at present, with brands including Giggling Squid, Chaophraya and Rosa’s Thai Cafe all on the expansion trail Myers says the quality of Busaba’s food, which is freshly prepared and cooked to order, has helped the now 15-year-old brand to continue to grow, even against this backdrop of increased competition, and he believes the group sits in its own category within the Asian food sector.

“We’re one of the few groups that’s actually in our own category. To lump all the Asian brands together is wrong, there are differences in the category. I have a job to show to the business community where Busaba sits and what our difference is. We are the only ones in the premium-casual market. Our average price point is £18.50, which is incredible value. We will never compromise on food quality.”

busaba-eathai

Despite believing to sit in its own niche, Busaba went through a period of doing little to capitalise on this, with expansion having faltered before Myers took over. The first 12 months in his new role were spent building a structure, evolving a management team, raising debt and rebuilding relationships, especially with landlords.

“We had to re-energise the landlords because we hadn’t opened a site for three years. A million brands launched during that period. Everyone forgets how popular Busaba was. It won numerous awards; it wasn’t in decline, but it had slipped under the radar.

"Businesses are about energy and momentum and the brand was seen to have lost that. You have a window of  opportunity and you have to take advantage of that. I know that if we can get landlords sitting in our restaurants, by the end of the meal, we will have secured whatever site we are after.”

Myers describes 2016 as a 'big year' for Busaba, with sites in Manchester, Liverpool, St Albans either newly opened or set to do so shortly. He says he is currently working on 14 different deals, two which have been signed, one which is being fitted out and another starting next week in London. Four more are in legals, two are signed for next year and one already for 2018.

“We traded in Bicester (now closed), and it was our second-best site in terms of turnover. We have traded well outside London so I know we can outperform our peers in a secondary town. We have gone to Shoreditch with a new format and it is going gangbusters. Manchester, on its first day, did more than 650 covers.” 

Indeed, the group’s sites perform well despite many of them being in less-than-obvious locations and the chain having a no discounting policy, with the business on track to see turnover rise from £26.2m to £35m in the year to 30 May 2015.

Building longevity

Busaba’s short-term plan is to get to 30 sites by the end of 2018. “I like the way Franco Manca works on its pipeline, by signing sites and mothballing it for the future,” says Myers. “There are so many variables that can impact your expansion plans, so I tend to stay quiet on that aspect of the business. There is also a lot of on-the-job training because the progress of the business is so full-on.”

Despite keeping quiet on where and when the group will open, Myers is building more longevity into the brand. “We’ve had to put in a national supply chain. We’ve also redesigned the kitchen to make it more efficient.”

Busaba-eathai-1

He has strengthened his management team, with Marc Lombardo, ex-finance director at Joules, Blacks and Greene King, Retail, joining as its new chief operating officer, while Joel Falconer has been promoted from development director to managing director.

“We have put in place the structure that will allow this business to grow to up to and over 50 sites. We’ve signed deals for several other sites across the UK but, unfortunately, we can’t talk about them yet.”

It is thought that Busaba is close to securing a further site in London and one in the Midlands. The group, which agreed a new £10m banking facility with Barclays last year, has already secured a site in the £75m South St Andrew Square development in Edinburgh for next year.

“There are a number of brands we sit comfortably with, for example, Wahaca and Red’s True Barbecue in Liverpool. People may find this strange but Wagamama is even one. Our Manchester site is directly next door to Wagamama, not because I want to target it, but  because we see it as complementary.

"Time will tell, but our research shows that to be the case. And [Wagamama] is back to its best, which is hats off to David Campbell and his team. They have got the buzz and speed back into the brand. They are pioneering the way for us.”

The ‘classic’ v ‘restaurant’ offer 

One of the big research pieces the business has carried out is differentiating the brand into two: ‘classic’, which is the original London model with big sharing spaces and tables, and a high turnover of covers; and ‘restaurant’, which will go into secondary towns. The latter follows a more traditional restaurant operation that better chimes with its smaller town audience and more neighbourhood locations.

“We have been testing this for a while in Shoreditch, says Myers. “The initial findings look very favourable.”

A further site under the classic banner will open off Oxford Street later this year, depending on planning, but will have some more ‘bells and whistles’. Each subsequent one will be slightly different, but with the Busaba DNA incorporated.

busaba

“The brand has got to tell a lot more stories. If you had never been there before you would say ‘what’s all this about?’. You see it on TripAdvisor. We either get rave reviews or the ‘I don’t get it’ reviews. We have to be much better – and we are really focused on this – on getting a consistent message across of what makes up the Busaba experience. It’s the freshness of the food, the talent behind the offer and the quality.”

There is also tentative talk of a return to the aborted all-day dining concept Naamyaa. “There was never a confidence issue with the core brand, just a nervousness about taking it outside London, but there was a genuine feeling within the business that there was an opportunity for another format. It was a timing issue.

"Naamyaa hasn’t been ditched, because the idea of the format is brilliant. But, at the time, it stretched the team here when it should have been solely focused on the core brand. It needed more time, development and resource. We may go back to it, but it won’t be any time soon because we are so focused on Busaba.”

The big challenge, adds Myers, is ensuring the culture of the company continues as it expands, particularly as it moves further away from its central London roots into regional centres such as Manchester, Leeds, Bristol, Glasgow and Oxford. “It is one we have already started to tackle with consumer research, demographic studies and plans for further investment in technology that will feed into Busaba 2020, the company-wide vision for the brand for the next six years.”

Phoenix rising?

The group’s growing momentum under Myers has also led to inevitable questions about Phoenix’s ownership. Myers concedes that every brand backed by a company such as Phoenix is “up for sale at any point” but says that it has invested heavily in the business and that the chain is poised to expand. This means the owners are “unlikely” to sell in the short term, he says.

“Phoenix has owned us since 2008 and they can sell us. But why sell us now when they have put so much money in to sell it cheaply? Phoenix is backing me and the management team.

“We have been approached by everyone in the past six months, which is flattering, but I believe we are 18 months away from where we need to be in terms of Phoenix achieving value in its investment. Someone would really want Busaba right now and want to pay for it ahead of that time scale, because they would be getting incredible value. Busaba can be as big as Wagamama. I genuinely believe that. It has real scope.”

Certainly, Phoenix has been supportive of Myers’ plans. The company will open its second site in the northwest at the end of February in Liverpool. The group has invested just short of £2m in Manchester and just short of £1.3m in Liverpool, and is looking to get a return on investment within three years.

“The business has grown very slowly and, unlike many others in the sector, it has, therefore, grown very healthily. Everything has evolved for a reason and it all joins up and everything works. The reality is we’re right at the start of our growth curve.”

Related topics: Business, Restaurants

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