Gioma heads north as its growth plans gather pace

Gioma Restaurants should have some satisfied shareholders this week. The company signed a deal for its first restaurant in Edinburgh last week, just ahead of its annual results, which are due to be announced next Tuesday (27 February).

The group has also secured a site for its second outlet in Manchester and intends to increase the rate of restaurant openings over the next two years.

Both Manchester and Edinburgh should be open by the beginning of next year at the latest. The Edinburgh restaurant is to be a 120-seat Argentinian-style Gaucho Grill, while Manchester, which is already home to a 180-seat Gaucho Grill restaurant, will be in line for a 120-seat Down Mexico Way.

Gioma currently has 36 restaurants: eight in the UK - of which six are in London - 21 in Holland and seven in Switzerland. Three are Down Mexico Ways and 33 are Argentinian-style restaurants.

In the UK, these Argentinian-style restaurants are called Gaucho Grill, in Holland they are known as Gauchos and in Switzerland they are Churrasco.

Israeli-born group chairman and chief executive Zeev Godik had originally intended to become a film producer. But in 1976, while studying at the Film Academy in Amsterdam, he decided to open a 45-seat Gauchos, at a cost of about £90,000 (mostly borrowed), on the grounds that he "loved food and was bored with films".

Eight months later Godik abandoned his film studies and opened a second, 85-seat, Gauchos in the Dutch capital.

"I always thought restaurants were a more sound business to be in than films but they required the same degree of creativity," he explained.

"I was 22. I didn't know what would happen and restaurants encapsulated everything I wanted at the time."

The business developed and in 1987 Godik moved from Holland to London.

Three years later he opened his first UK restaurant, Down Mexico Way in London's Piccadilly, which seats 280. London's first UK Gaucho Grill opened in 1994.

Today, the group has one Down Mexico Way and seven Gaucho Grills in Britain.

Its eighth UK Gaucho Grill opens in London's Covent Garden in July and will seat 100.

"In the UK, we have grown against the odds," commented Godik. "When we started here red meat was a no-go area because of its high cholesterol, Argentina was not in favour because of the Falklands War, and then there was BSE."

Gioma insists on using Argentinian beef, and is keen to emphasise that there have not been any cases of BSE in Argentina. Three-quarters of the main courses sold by Gioma in the UK are steak.

"BSE is a black cloud on the horizon," said Godik. "I don't see it as a long-term problem but it is something we are watching closely."

Key dates in Gioma's history include 1993, when, as a private company, it bought six Churrasco restaurants in Switzerland.

Five years later, in 1998, Gioma UK was reversed into the fully quoted company Parambe, which had traded as an art dealer. The art business was sold and the name of the company changed to Gioma Restaurants to give the group an immediate listing on the Stock Exchange.

In November 1999 Gioma bought Churrasco Steakhouse and Gauchos Nederland in exchange for 30 million shares, worth about £15m. This secured the six Churrascos it had already acquired in Switzerland and included 17 new Gauchos in Holland.

The company plans to open 20 more restaurants over the next two years in Holland, Switzerland and the UK at a cost of £20m.

The UK will get its fair share of attention. Gioma wants to open more restaurants in London - in Wimbledon, Putney and Clapham - as well as further afield in Leeds, Birmingham, Bristol and Bath.