When Hugh Osmond, along with entrepreneur Luke Johnson, purchased the Pizza Express chain in 1993 for £18 million, he ushered in an era which would see the Italian restaurant brand float on the stock market and expand its commercial property portfolio to 367 restaurants. Now it has emerged that another Italian chain is to benefit from his expertise, as he has purchased the ailing Strada restaurant chain for £37 million.
Included in the sale is not only the Strada brand, but also the existing 43 restaurants collated by previous owner the Tragus Group. However, the property portfolio is unlikely to remain this small, as his Sun Capital vehicle is currently looking to invest in the chain, revamping existing premises and eventually expanding throughout the UK.
Mr Osmond intends to reinvent the business, which currently focuses upon capturing the evening market, as an all day, casual dining experience.
He says; “This is a fantastic group of restaurants, and we have big plans to invest in the business and expand it.
“Our focus is on creating places where people want to hang out and eat fabulous Italian food, including fresh, healthy and up to date menu options.
“For us, this will be a story of investment and expansion – the menu will be seriously updated, the quality of ingredients and food will be dramatically improved, and there will be a major investment in the premises, giving a very different ambiance.”
The chain was put up for sale earlier this year by Apollo Global Management, which owns Strada’s parent group Tragus. According to Zolfo Cooper, which led the sale process, Apollo Global Management had been seeking offers of £40 million and upward, which would have equated to around eight times the chain’s most recent earnings after tax, interest, depreciation and amortisation.
Strada has struggled greatly in recent years to make headway in the competitive restaurants sector, in part due to the recession causing consumers to save money by cooking at home or ordering in cheaper takeaway meals rather than frequenting their local restaurant businesses.
However, the majority of its problems have been caused by the growing number of Italian chains entering the UK market, with brands such as Zizzi, Prezzo, Pizza Hut and Ask eating steadily into its consumer base and causing its market share to crumble gradually.
This acquisition will mark Mr Osmond’s first venture in the leisure industry for more than ten years as after selling Pizza Express following its successful flotation he chose to focus upon alternative areas of business such as life assurance. He has chosen to retain Strada’s existing management team, led by James Spragg, and hopes that their strategies combined with his industry experience will prove to be a winning formula.
He concludes; “This is all about breathing life into a new business.”
Hopefully, this rejuvenation will be exactly what the Strada brand requires to get back on its feet and become a strong contender in the restaurant sector.
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