Stockbrokers and investment bankers arriving in Man-hattan's financial district before 7am one morning last summer might have been surprised to see a gleaming new storefront at 60 Broad Street.
The 40-storey building's pavement-level windows had been covered with plywood for weeks, shielding a construction site from public view, but some time during the previous night the boards had been whisked away, revealing the glass and stainless steel casing of America's first Pret a Manger sandwich shop. Those early risers would have been downright startled by a look inside: on the shop's signature pressed-aluminium floor half a dozen employees in stiff new Pret uniforms were preparing for the first day of business by playing Twister.
Workers at a New York City sandwich shop having fun with Twister? Not likely. It's usually management that does the contortions, trying to persuade young members of the local labour force that their customary mien of bored hostility isn't exactly good for business. But Pret, having opened more than 100 shops in the UK since the company's debut in 1986, is intent on extending its brand to New York and beyond, which means transplanting Pret culture - from the obsession with all-natural ingredients to the use of 'team-building' exercises like Twister.
The company may have introduced some new moves to the cut-throat sandwich-flogging competition in Manhattan's go-go precincts, but New York City jealously guards its 'if you can make it here, you can make it anywhere' reputation and prides itself on wrong-footing would-be corporate innovators, especially foreigners. One of the most ingenious surprises the city tossed at Pret co-founder Sinclair Beecham landed in his lap at the height of the lunchtime rush on opening day, 11 July.
Despite its name, Broad Street is anything but, so the presence of a fire engine blocking traffic outside your business tends to take your mind off whether you've put on enough Super Club sandwiches. Even more distracting: six New York City firefighters trooping through your shop wearing anxious expressions and enough gear to fight a three-alarm blaze.
Fire in the kitchen? Gas leak in the basement? Well, no. The men were concerned about the air-conditioning. Oh God, a fire in the ducts! Er, no. The firemen wanted to know if Beecham had a permit. For the air-conditioning.
'They were suggesting that they wanted to close us down. It was not my best moment,' recalls Beecham, sitting at a table in the shop four months later. He doesn't quite fit in with the bustling lunchtime crowd plucking sandwiches and vying for the few available seats. Amid a sea of charcoal and navy business suits, he's wearing a heavy-knit, ivory-coloured, too-tight jumper that testifies to his confessed affection for the Aqua Grill and other exquisite Manhattan restaurants. He harbours far less fondness for the city bureaucracy that hovered over every step of Pret's launch, then sent firemen round to try and shut the place down.
'I thought I had landed in the People's Republic of New York,' Beecham says, his incredulity fresh despite his having spent a year wading through paperwork since embarking on the project in October 1999. The air-conditioning emergency infuriated him (it was defused when Beecham's architect, who happened to be present that day, intervened and convinced the firemen that the proper form would be filled out; the document is now framed and hangs in the Pret back office as a monument to red tape), but Beecham keeps a special black place in his heart for the commissars of the city health department.
'They don't care if I poison people as long as I've filled out the right forms,' he says.
Hiring a creature of the city bureaucracy known as an 'expediter' helped matters, though the expeditious route to obtaining a single permit from the health watchdogs took four weeks.
Learning to navigate a foreign bureaucracy was just one of the challenges facing Beecham when he took on the task of establishing a Pret beachhead in America. After years of nearly turning into a bureaucrat himself while managing a chain worth about pounds 80 million, Beecham relished the opportunity to get back to basics. He'd be reliving a bit of the past when he and Julian Metcalfe, a university friend equally thin on experience in the food-service business, opened the first Pret a Manger on Victoria Street 15 years ago.
There was no question of sending over a gang of Pret experts to storm foreign shores with dozens of shops; it would be one of the company's founders, opening a solitary store.
'Too many businesses seem to send the tea boy to open up the business abroad,' Beecham says. 'They think it's easy to go international. Then they have the most massive expansion plans because that's what justifies the move to the accountants. But you're dealing with a different culture, a different mentality, different taste profiles, different language, different laws. You must never underestimate going from one country to another.'
The hiring of Andrew Rolfe in 1998 to run the UK business cleared the way for Pret to consider international expansion, after having spent years rebuffing queries about franchising overseas. 'We could have dispensed all of our time chasing international business opportunities that we were too young to exploit, and we'd take our eye off the ball at home,' Beecham says. 'You need two things to make a business work abroad. One is a very good idea. The other is it needs to be the right time for you.'
With the Pret concept sufficiently refined, and with professional management in place (Rolfe's background is at Pepsico and Booker), Beecham says he was 'freed up to do what I do best.' That meant building a business, not running it.
Pret has flourished in London's financial district - there are 25 City shops - so New York's Wall Street area, with its high density of office workers, was a logical first target. After half a dozen one-week scouting missions, Beecham arrived on 4 October, 1999 with a suitcase, a hotel reservation and no idea what to do next.
'I started with a clean sheet of paper, and I had to think: Was I looking for bread ... chicken? Was I going to bring it from England? Was I going to buy packaging locally? Was I going to find a marketing agency? Was I going to find an architect? Where do you start?' At least Beecham had an album of photographs snapped in London recording every Pret detail he needed to recreate in New York.
His first step was to build a 'team' (a favourite word). This being America, he immediately hired a lawyer. This being New York, he immediately contacted real-estate brokers - to find himself an apartment and potential Pret sites. They turned up a flat in SoHo and an office being converted to retail use by the new owners of a million-square-foot building near the Stock Exchange.
Pret signed a 10-year lease, with a five-year renewal option, for a 3,000 sq ft space (bigger than most UK shops) at a rate similar to London's pricy rents. Building and equipping the store cost about pounds 500,000. 'It's a big commitment,' Beecham says.
He made a big commitment of his own after a few weeks in the rented apartment: he bought a place of his own. Not just a pied a terre, but a three-bedroom flat in Tribeca, one of the city's hottest and most expensive neighbourhoods, where apartments that size often sell for more than dollars 1 million. 'I had no intention of buying an apartment,' he says, 'but I realised that I wasn't going to succeed if I was an English employee visiting America. I had to be living here and completely immersed in the business to make it happen.'
Making it happen, he says, turned out to be 'an undoubtedly humbling experience'. Just getting anyone's attention was a challenge. 'Because you've got 100 UK shops, you think you're a big deal. Then you come here and suddenly realise that only 15% of all Americans have a passport, and God knows how many of that 15% have been to the UK. How many of them are in the food-service business? Probably not many. And 100 shops is tiny in the States. Starbucks has 3,000 and McDonald's has 13,000. They're used to big.'
Operating 100 shops in the UK means Pret orders so much food that it has considerable leverage with suppliers. Beecham had zero leverage in the US. Early encounters, he says, went like this: 'I'm telling the guy that I want him to make the fruit salad, I want it this way, these are my standards and they're very demanding. Oh, and by the way, I want 30 a day.' The usual response: 'Fugeddaboudit!' But Beecham eventually found enough suppliers who 'saw an opportunity'.
He was going to be placing his piddling food orders for nearly everything, even Pret's own-label crisps. Beecham discovered that they can't be air-freighted from the UK because the bags explode in unpressurised cargo holds, and they can't go sea-freight because they arrive stale. He persuaded a small concern on Long Island to provide 'out-of-this-world potato chips, better than the ones we use in England'. It helped that the supplier was familiar with Pret's UK operation. 'He was prepared to take the risk because he reckoned that Pret would work here,' Beecham says. 'Although he's going to make nothing out of us while we've got one shop, he's going to have a very big customer if Pret works.'
Sometimes the Pret menu in New York is dictated by the suppliers who meet the company's standards and agree to come on board. Beecham couldn't find an acceptable lemon cream crunch in all of North America, so he substituted slices of Brooklyn-made Steve's Authentic Key Lime Pies for dessert. (Other tweaks: hot soup has been added for New York's brain-frosting winter weather, and prawn sandwiches deleted because Americans find it unthinkable to put shrimp between two slices of bread.)
Beecham intends to open at least five more shops in the second half of 2001. That's hardly the ceiling on his plans. 'I believe from my experience here that we could probably build 100 stores south of Central Park,' says Beecham. He also expects Pret will work in Chicago, Boston, Washington and other major US cities.
He is so emboldened because the Broad Street shop is already 'just on the wrong side' of making a profit. In its first two months, Pret served 700 to 800 customers daily. Now 1,200 on average stop by. (That's disappointing news for the city's homeless. Pret's leftover food is donated to the City Harvest charity.) But Beecham doesn't expect significant profits until reaching a 'critical mass' of 10 shops in the city, when the balance of overheads, improved buying power and other considerations will tip in Pret's favour.
'It's very early days,' Beecham says. 'I think people get carried away: 'Oh, my God, I've got one shop open in New York. Let's go to every capital city in the world.' That would be a major mistake. Because we're not big enough yet to support the demands that a second business puts on a company like ours. One step at a time. Build a strong foundation and never regret it.'
Beecham's gaze drifts to the counter, as it often has during our conversation.
Finding employees with the right attitude, rather than just plain 'attitude', was one of his biggest concerns before coming to Manhattan. He had seen the competition's truculent help, who, upon hearing his motto 'Happy team, happy customers', would have happily told him where to stick it.
But he took pains to find the right people. After initial interviews in a hotel room decorated with Pret posters, applicants who made it were invited to company HQ - Beecham's apartment - for assessment day. Personnel experts observed them as they 'played games and had fun', he says, and then selected Pret's first New York team.
But a worker's inclination to agree to play Twister before work rather than to reply, 'Yeah, twist this' doesn't guarantee happiness, so the company has sweetened the employee-bonus system used in the UK. The store is visited daily by a mystery shopper, and if the staff perform well, everyone gets a dollars 2-an-hour bonus for the week. The Pret shop in New York has hit its mystery-shopper goals for all but three weeks since July, raising their pay rate to dollars 9 an hour - excellent by American fast-food standards.
Beecham nods towards an employee trying to attract a customer's attention.
'See this girl trying to make eye contact with that guy, make him feel comfortable? That's what it's all about.' Next to her, another young woman in a blue Pret cap tries out a few dance steps behind the till and Beecham smiles.
HOW TO EXPAND ABROAD
- Do your homework - is there a market for your business abroad?
- Decide before you go how closely you want to emulate your business at home. A different culture may demand flexibility.
- Send out the most senior person possible to oversee the operation - opening a business abroad needs to be taken as seriously as the initial launch at home.
- List potential suppliers in advance, then visit them in person to get the best deal.
- Hire a local lawyer to guide you through any unfamiliar legal requirements.
- Live the life of your chosen country. Buy a flat, settle in, make friends. It will reinforce your sense of commitment.
- Don't rush anything. Lay strong foundations in one location and gradually build the business.