Grand Union ends private equity talks and focuses on self-financed expansion

26 October 2012 by
Grand Union ends private equity talks and focuses on self-financed expansion

Independent bar group Grand Union has rejected the advances of a number of private equity firms and decided instead to focus on building cash reserves to fund future expansion.

Grand Union, headed by Adam Marshall, said it had received a number of approaches from private equity backers but had decided to end talks in favour of organic expansion over the next 12-18 months.

The company has nine sites, including eight in London and one in Buckinghamshire, all of which were opened using Grand Union's own funds. But the company has cut back from earlier in the year when it operated 10 London sites.

The group, which has current EBITDA pre-central overheads of £1.4m, will now focus on opening two or three new venues next year. Grand Union has seen 7% like-for-like sales growth this year and claims to have improved gross profit margins on dry and wet sales, with "a number of sites" achieving up to 74% gross profit.

Marshall said: "Private equity, although very complimentary about the business, management team, brand and concept like more ‘cookie cutter' businesses at present. The plan now is to continue growing reserves to take on two or three more £1m-a-year sites and build an even better trading profile.

"The company was founded only five years ago and we've focused on consolidation this year before we expand next."

That consoloidation has included surrendering the lease on Grand Union's site in Ravenscourt Park. Marshall said: "The area wasn't quite the right demographic and target market for us. This leaves us with eight sites all making good money.

"We think that we'll be even more attractive to investors in the wake of improving our systems - we've installed Zonal EPOS; a £90k investment - and adding a couple more sites."

Grand Union's most recent opening was Grand Union Paddington which is has reached £25,000 to £28,000 per week of net takings and annualised at site Ebitda of £260,000.

Grand Union strengthened its management team at the beginning of 2012 with the addition of former Realpubs finance director Tim Yates, former head of London operations at Jamie's Italian Marc Rust as operations director and Anna Murashka as group sales manager.

Private equity buyers circle Grand Union >>

The Caterer Interview - Adam Marshall >>

Grand Union readies for growth with expanded management team >>

By Neil Gerrard

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