Restaurant and food group Carluccio's has bought back its Irish franchise from a group of investors and is planning to open six new restaurants across the country over the next few years. The UK-based group has also relied on its greater scale to renegotiate its rental agreement on the brand's only existing Irish outlet in Dublin's Dawson Street.
The development crystallises substantial losses for the Irish investors, who are together thought to have spent more than €4 million on the business but are likely to have received a nominal sum for the franchise.
The investor group involved in the business, which operated from one outlet in Dawson Street, included former KPMG managing partner Ron Bolger and former Anglo Irish Bank chairman, Peter Murray, who together controlled the restaurant. Smaller shareholders included Philip Ryan and Stephen Quinn, with the remainder controlled by a group of about a dozen individuals assembled by NCB, which has since become Investec.
The Dawson Street restaurant has consistently operated successfully but has struggled with high rents, which are understood to have amounted to €680,000 per year when its owners originally leased the premises on a 20-year basis in 2007. The buildings housing the restaurant were purchased for €20 million at the end of 2006 by a group including the then AIB chairman Dermot Gleeson.
Accounts for the restaurant for the year to the end of September 2011, the most recent available, show its accumulated losses grew from €2.6 million to €3 million during the 12 months.
At one point in 2010, the outlet closed for a week as it sought a reduction in its rent, which was achieved. It is believed that a further reduction was sought more recently, as losses continued to mount, albeit at a slower rate, but that these discussions eventually convinced the franchise-owners that it would be better to exit the business.
Second outlet
Simon Koshoff, Carluccio's chief executive, said yesterday that the operating performance of the Dublin outlet left it in the top 10 of the 86 restaurants operated by the company around the world.
He said the company expects to open its second Irish outlet within the year, with locations at Dundrum Town Centre in Dublin, the Kildare Village outlet centre, central Belfast and Cork of interest.
He said central Dublin could also probably absorb a new Carluccio’s location.
“You’re past the worst,” he said of the Irish economy, adding that the problems at the Dawson Street restaurant “had absolutely nothing to do with custom”.
“What we have been able to do is reduce the rent to a point where it can be profitable,” said Mr Koshoff.
Some 50 jobs are being preserved at the Dawson Street outlet, which will close for a €250,000 refurbishment in coming weeks before reopening in late November.
