Rebecca Mascarenhas: “I'm astounded by the short-sightedness of some landlords"

By Joe Lutrario contact

- Last updated on GMT

Rebecca Mascarenhas owner Elystan Street, Kitchen W8, Church Road

Related tags: Fine dining, West london, Chefs, Coronavirus

The respected West London restaurateur behind Elystan Street, Kitchen W8 and the recently launched Church Road on the dangerous lack of clarity from Government and why landlords should be using rent deposits to cover rent arrears.

How are your re-opening plans gong?
We've done a lot of financial modelling. On the two metre we're not going to open, we just can't do that. And even the one metre rule is hard. Each restaurant has to look at their demographic of customers and their space and their structure. We have a lot of space between our tables so the metre rule won't have as big an impact on us as it will on restaurants that have counter seating, or cram their customers together. But on the other hand we have a slightly older demographic who are perhaps going to more nervous about going out.

Do you think you might be at a bit of an advantage running more neighborhood-geared restaurants?
Yes we're slightly better placed than the West End and City restaurants that rely so heavily on tourists and office workers. Most people round here aren't going to work and are interested in keeping their locals restaurants and shops going. 

How are you going to ensure your restaurants re-open in as economically viable way as possible?
We went into this crisis with no debt, which has a big impact on how we're going to come out of this. We've paid all of our suppliers. That's a fortunate position to be in. We're looking at rotas, and that all links back to the menus that we will offer. We will probably be opening with smaller menus. That will mean smaller teams. We're trying to give our staff choices but we don't know what business is going to be like when we re-open. We don't want to make anyone redundant so we might look at having everybody do slightly fewer hours. We've also had some staff go back to their home countries. They say they want to come back, but we don't know for sure.

How receptive have landlords been?
Two of our landlords are being helpful but two aren’t, one is demanding the next quarter's rent, which just isn't possible at the moment. The Government should make it mandatory for landlords to take the dead money in rent deposits to cover rents - if they haven’t already granted a rent holiday. Technically the money does not belong to the landlord, it's mine. The landlord is no worse off apart from having a higher risk profile, but the risk profile is high whatever happens. By not being supportive landlords run a substantial risk of tenants handing back their keys and walking away from their debt. Using the rent deposit would give me six month’s breathing room. I can't understand why more people aren't asking for this. Our other two landlords have been more helpful. They are willing to talk to us about what the future will look like. I'm not adverse to exploring a base rent plus a rent that is linked to turnover.

What's your view in the Government's recently published code of conduct for landlords and tenants?
It's risible, it's utterly useless. Our company paid the exchequer in excess of a £1m last year. Surely it's better for the Government to keep us going and all our people in employment by providing the right support for the sector, espcially as many of the things the likes of Jonathan Downey are asking for won't cost it a penny. 

How confident are you about getting your group through this?
I think the industry will come through this. We have had moving and wonderful emails sent by clients saying that they cannot wait to come back. But it's going to take a long time. It might take up to three years until we can once again be certain about what is happening. Everybody's situation is different. I'm so sorry for the people that have just started off and were repaying their debt in a structured way. And now they have that debt and no income plus the likelihood of having to borrow even more money.

Tell us about your hospital project...
We've been really busy because Phil and I have supplying 150 meals a day to the Brompton and Marsden hospitals for the teams on their intensive care units since the beginning of April. A customer donated the money for ingredients and we have donated the labour, it's actually mostly been Phil as the team is on furlough, although some of them have been cooking on a voluntary basis if they are able to get to the restaurant without using public transport. It's not tasting menu stuff but it's a step up from lasagne, we're using the same suppliers as we use at the restaurant, and many have been extremely generous. We've just stopped because the ICUs are no longer full and on high alert so they don't need them, which is great. 

Why wait so long to introduce a delivery service?
We were busy with the hospital project. But there was also quite a lot of logistics involved. We needed to plan it probably as we wanted to be true to who we are as a restaurant rather than offering something completely different. We haven't marketed outside our own database and our take up is 100% to 110%. We're cooking about 100 meals a day. The cash generated is primarily being used to top-up our furloughed staff's wages. We're delivering only in West London. People are desperate for restaurant-cooked food and they're keen to support the industry as well. People want to keep their local businesses going, and local restaurants are high on that list.

From a structural perspective what are the consequences of this going to be for the industry long term?
It will be a leaner industry. We have had a bull run of restaurant openings backed by crowdfunding, enterprise investment schemes and hedge funds. A lot of that is going to come to an end. Banks are going to be very nervous about lending anyone any money. There is going to be a lot of empty restaurant space. Which is why I'm so astounded by the short-sightedness of some landlords. Retail has declined over the last five to ten years, and landlords have looked to restaurants to fill the gap. A lot of places have now been overdeveloped and I think in this climate people aren't going to be willing to take sites, especially large ones in office-driven areas. Developers and landlords should be looking to work with tenants that have shown they can run a business and pay their rent up to this point. On a more positive note, there have been too many restaurant openings which had a devastating effect on skill levels, which pushed up costs. This may result in that leveling out. A lot of people were opening restaurants without really thinking about the long term benefit to them. I've been in this business a long time, it's very different now to when I started out. 

You invest in a number of other restaurant businesses. Do you think there will be opportunities for investors in the midst of all this chaos?
For me, no. Chaos is the right word. I'm not looking to invest in anything. There may be opportunities but it's too risky. It's time to batten down the hatches. If I'm going to be doing anything I'm going to be looking at ways we can support our existing business and our fantastic people. Both Phil and I are also very committed to the suppliers that we have been working with for a long time. There have been some heartbreaking stories about cheese makers and farmers and fishing boats. It's difficult out there.

What does the industry need from Government at this point? 

Clarity. What I'm most worried about is not knowing what's happening. If we could just know what the guidelines are. I'm a person that needs to have a plan. It's all very late. The June quarter rent default is a lot more worrying than the March one. We've been closed since the middle march, there's just no money. This is the first time ever we've seen successful businesses facing financial meltdown through no fault of their own. But there's no use moaning, you just have to be realistic and focus. I have an incredibly supportive bank and feel that as a business we have done everything right. We have the loans in place should we need them. We have staff that want to come back. We have supportive customers. But it's odd not knowing. I write business plans, I don't know whether they are true or not. 

Related topics: People, Restaurant, Chef

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