Chez Gerard: Serving up a takeover

Would you spend £9m on a dying restaurant chain in the middle of a recession? That's what Brasserie Blanc entrepreneur Mark Derry did, snapping up eight key sites - including Covent Garden flagship the Opera Terrace - from the ailing Chez Gerard group. Now it has re-opened after a three-month refit, will the punters bite?

by Andrew Saunders
Last Updated: 02 Dec 2015

It's opening night at Brasserie Blanc's latest acquisition, the elegant Opera Terrace restaurant atop London's Covent Garden market, and the joint is jumpin'. Alongside the punters and industry types out for a nosey at the funky new decor is a smattering of minor celebs to add a touch of glitz to the proceedings. Tanned, toned and still glamorous after all these years, 1960s film star Britt Eklund holds court in a corner. Pink Floyd drummer and squillionaire Nick Mason takes in the crowds enjoying a complimentary Corpse Reviver No 3 cocktail and a few oysters. Even the doyen of modern British food, Sir Terence Conran, has put in an appearance despite his age and increasing infirmity. And of course there's Raymond Blanc, Michelin-starred celebrity chef and the man with his name over the door, diminutive and beaming, every inch the convivial host.

This is the public face of the restaurant trade, glitter and tinsel; eat, drink and be merry, for tomorrow it's back to work. But, like the proverbial swan, a great deal of energetic and determined paddling has been required beneath the surface to get things this far.

Only a little over six months ago, The Opera Terrace's parent group, Chez Gerard, was in the hands of the administrators, its once respected name a mere shadow of its former self. Before Deloitte was called in, Paramount, the owner, had been run by its banks for two years, in the course of which the value of its debt was written down first from £120m to £65m, then to an ignominious £25m. In 2010 it's reckoned that an offer to buy Chez Gerard for around £35m was turned down - a scant year later that was looking like a pretty deluded decision.

The 250-seat Opera Terrace itself, jewel in the crown of the Chez Gerard chain, was feeling the strain. Paint was peeling, the renowned glass roof leaked, staff were struggling with old facilities and equipment. There weren't even enough knives and forks to go round. A sorry fate for one of the capital's best-sited and potentially most lucrative restaurants.

Back amid the first night crush, doing his own fair share of pressing the flesh, is the man responsible for the transformation, Mark Derry. He may not be even a minor celeb but his record in the hospitality business is impressive. Before taking on Brasserie Blanc he founded Loch Fyne seafood restaurants, which grew to a 38-strong chain before he sold it, with impeccable timing, to Greene King for £70m in 2007. Before that, he was the man who ran TGI Friday's for Whitbread. Then, last year, he made the bold - some might say rash - decision to snap up Chez Gerard's eight key restaurants in the capital, after being contacted by Deloitte.

It's a £9m deal that could transform Brasserie Blanc from a largely provincial purveyor of casual dining into a major player on the lucrative but demanding London food scene. It's the biggest single deal of his career and of all tonight's partygoers, he is the one with the most at stake. But he's ready with a smile and a barking laugh all the same.

Rewind to late 2011, when MT first meets Derry. The economy has just re-entered what will turn out to be the longest double-dip recession in modern history, consumers are feeling the pinch as never before and eating out is hardly a top priority for the nation's hard-pressed wallets, purses and shrivelling expense accounts. Surely it's a crazy time to be making such a major investment? 'It is a risk, but not that much of one,' he says, matter of factly. 'They are great sites and we only have to do the same average business in each of them that we do in our Milton Keynes Brasserie Blanc. If we can't do better than that on Charlotte Street and in Covent Garden it's a poor do.' As well as those two, the deal includes the former Chez Gerard restaurants in the City, St Paul's, Chancery Lane and on the Southbank. They will be rebranded and refurbished - at a cost of another £4m to £5m - and will almost double the number of Brasserie Blancs.

The restaurant shut for three months for the refurbishment; the famous glass roof leaked.

The resulting chain will represent a step change in both turnover and complexity. But, like all good entrepreneurs, the determined Derry sees opportunity where others see danger - the chance to get his hands on so many premium sites at such a knockdown price was simply too good to resist. Even in its then-parlous state, the Opera Terrace is taking £93,000 a week, he says, when the average for a UK restaurant is £8,000.

A tough yet genial Scot, he radiates quiet competence and self-belief. If he says he's going to do something you can bet your boots it will get done. 'It is a transformational deal for us,' he says with a twinkle. And the key to it all is the Opera Terrace: Covent Garden is thronged with shoppers and tourists, handy for business lunchers, only yards from the Royal Opera House. 'It's the make or break site, we have to get it right.'

It's also the one that is the most unlike Brasserie Blanc's usual spots - Derry and his team prefer to go for newbuild retail premises that can be fitted out quickly to a standard plan. The Opera Terrace, on the other hand, sits on top of a London landmark, is old, has an idiosyncratic layout and is not only Grade II listed but also strictly policed by the Covent Garden authorities. It's going to have to close for at least 13 weeks for an overhaul, which will cost £1.4m, and that's just the start. 'It will cost £50,000 a week in rent and rates to be closed, plus another £50,000 on top of that in lost revenues,' says Derry. A further complication is its sheer size - twice as big as any other Brasserie Blanc.

A few weeks before the refurb begins in January, the issue uppermost in the minds of many of the 35-strong lunchtime shift is what will happen to them during the closure. They will be paid their contracted hours but in this business that doesn't mean much. As Lithuanian waitress Lina Pereira, who has worked for Chez Gerard for five years, explains: 'It's not just that we'll get no tips, most of us have only 10-hour contracts but no one actually works for only 10 hours a week.' But, despite these concerns, she is positive about the new ownership. 'The Opera Terrace is a great restaurant but it does need changes. When it re-opens it will be a beautiful place, and it will have the Raymond Blanc name which people look for.'

Staffing is a difficult issue, as Derry confirms later when the refurb is in full swing. Around half the staff have left since the closure, he reckons. 'If you are waiting staff, your tips can account for half your wages.' There has also been extensive retraining to cope with. Of all the challenges they face, 'TUPE'ing over 200 people has been among the most difficult. Some people have been amazing, others have been belligerent and difficult. But that's what management is about. If all the staff were fantastic we wouldn't have been buying the restaurants from the administrators,' he says.

Mark Derry formerly ran Loch Fyne and TGI Fridays

The refit team are now busy in the kitchen, a maze of interconnecting rooms with low ceilings and odd corners. It doesn't lend itself to the simple, efficient layout found in the firm's other sites - the new pass is on the small side and not in its proper place, the new cooking range is squeezed into a corner and the prep and food storage areas are further away than they should be. A slick kitchen is a vital part of the Brasserie Blanc recipe - it's one of the things that helps it to provide a 'premium casual' dining experience for a pretty modest average spend of around £31 a head - but they will just have to make the best of the building's limitations.

Front of house, tired old fixtures and furniture have gone, and no fewer than nine layers of old flooring have been stripped away. Everything has been rewired and replumbed but the old glass conservatory roof remains - for now. Many of the panes would have to be hand cut to custom shapes, impossible in the time available. Derry's plan in the medium term is to fit a completely new roof structure, but dealing with the authorities is proving an unexpected headache. There is trouble over plans he has submitted for a new roof incorporating expansion joints to prevent the chronic leakage problems, but these have been rejected because they would create a higher roofline. Higher by all of two inches, that is. His frustration is evident, but the show must go on.

By contrast, Derry is full of praise for his right-hand man, John Lederer, a veteran of Chez Gerard who was operations director in happier days when the group was noted for serving the best steak frites this side of Paris. Derry describes him as the 'best restaurateur I have ever worked with', and he is busy managing the refurbs of the other former CG sites, the first of which to open is in St Paul's.

Derry's 60-strong senior management team, many of whom have been with him for years, are his secret weapon - the beating heart of a highly professional operation. All the same, they (and he) have been 'incredibly stretched', he admits. But, as shareholders, they stand to benefit from their own hard work. 'Unlike many in the business, we have given away a significant equity stake because we want people to do well. I like to take people with me.'

The Opera Terrace reopens bang on schedule after 13 weeks, a crafty week or two before the 'official' opening night party. This is a crucial running-in period in which staff and management get a chance to make the inevitable mistakes out of the glare of publicity. 'We will get it wrong. We only allow up to 75% of capacity for the first three weeks; the biggest issue with any new place is that no one knows where anything is to start with,' says Derry.

Raymond Blanc, investor, board director and face of the business, has been busy in the closed period too. It was his original Petit Blanc concept that Derry bought into six years ago, expanding it from three restaurants to 11 before the Chez Gerard deal. Blanc has been helping to design the new summer menu, working with Derry's team of executive chefs to refine recipes and preparation methods. The result is dishes like Cucumber Gazpacho (starter, £4.95), Priest Strangler pasta with parsley and walnut pistou (main, £9.50) and a range of steaks from sirloin at £23.50 to Chateaubriand (£52, for two people).

The refit cost £1.4m. After six weeks under new management, takings are well ahead of expectations.

The key part of the Brasserie Blanc model is quality ingredients, carefully sourced and simply prepared. Keeping the time and labour required to a minimum is where the difference between profit and loss begins. 'You don't want more than three steps between the ingredients and the dish. If you're building towers of beauty, that's a lot of time and effort which restricts how many people you can serve. We concentrate on getting the best ingredients we can, cooking them well and serving them. Given our average spend, what we offer is really great value.'

Six weeks after re-opening, The Opera Terrace is doing getting on for 6,000 covers weekly and takings are well ahead of expectations. The cocktail bar is a hit and is selling 5,000 cocktails a week at over a fiver a pop.

However, the new Brasserie Blancs in the City have been hit by the Olympics, as potential punters work at home to avoid the crowds. Heavy promotions from rivals aren't helping either. 'Lunch is the hardest business, we have seen declining covers at lunch for the first time. You can get a pizza for four quid even though they are mostly horrid.' Discounting is not his style, however - 'we're not in business to lose money' - so the Brasserie Blanc answer is a new £11.50 seasonal menu and lots of local marketing. He's got his fingers crossed that this will do the trick.

So has it all been worth it? He looks mightily relieved to have made it to the opening on time and more or less on budget, and anticipates that the numbers will look pretty good at year end. 'I reckon we'll turn over £40m (last year it was £15.7m), and The Opera Terrace alone will do £6m. It's not rocket science this business, it's hot burgers and cold beer. People just have to know who they work for and what they need to do to be successful - and you have to tell them how brilliant they have been when they do it,' he says. 'People are all we've got in this business, that and a bit of decoration.'



Wright worked on cruise ships and in corporate catering before becoming manager of the Opera Terrace a year or so before its sale. After spending the refurbishment period training in other Brasserie Blancs, he returned to the Opera Terrace and his old job.

'I used to like coming here for cocktails, I knew Paramount a little but I didn't want a career with them. It was the Opera Terrace I wanted. I was never going to get the chance to run a 250-seat restaurant in corporate catering.

'It was an incredible struggle when I got here, finances were very strained. I even used to have to fix broken floor tiles. The kitchen? I don't know how they did it, serving up 3,500 meals a week, and the heat in the summer - poof!

'When we met John and Mark, it was like a breath of fresh air. Mark has real presence. I'd got to the point where I was wondering if this was what I really still wanted for myself.

'Now we have plenty of resources - and we have real quality and customers get great value. The staff are excited and I'm really proud. Now we've got something we can sell.'



Algerian chef Aliane has worked for Chez Gerard - with a few short breaks - right from its inception in 1990. He started working in the Opera Terrace kitchen in 2002. MT interviewed him shortly before the restaurant closed for refurbishment in January.

'Chez Gerard restaurants used to be great places, but in recent years the standards had been falling off a bit. It became less about the food and more about the money. The bosses were always changing. The company was struggling but no one asked the chefs how to win back the trust of the customers.

'In the kitchen, everything needed fixing. We had only one oven sometimes; we were chefs, handymen, electricians! Working in a poor kitchen made me feel like a poor chef. Even so, we could sometimes do £130,000 a week. With that pass!

'So it's a relief that the company has been bought and that the food will be good again. I know John from when he was at Chez Gerard before and he is a good guy, an action man. I was thinking about leaving, but when I heard that he and Mark had taken over, I decided to stay.'


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