What went wrong at Le Petit Blanc?

13 May 2003 by
What went wrong at Le Petit Blanc?

It was intended as a trailblazer, making quality food affordable to the masses, but Raymond Blanc's Le Petit Blanc chain is currently in administration. The vision failed for the prosaic reason that it ran out of cash.

The four restaurants were in Oxford, Cheltenham, Birmingham and Manchester. Oxford, the first site, opened in June 1996, and the others followed within the next four years. The largest of the four, in Birmingham, had 224 seats. Their aim was simple: "To give the best food, the best service and the best value for money in the brasserie scene."

The equity in the group was held in a joint venture between Raymond Blanc and Orient-Express Hotels - the latter bought the chain as part of a £27.5m deal with Virgin Hotels in early 2002.

Lee Manning, one of the two partners at Kroll's corporate advisory and restructuring group, which has been appointed as administrator, blames the cost of the head office, saying it was just too much of a burden for a mere four restaurants.

The restaurants' backers pulled the plug in early April this year, deciding it would cost too much to right the listing ship. Manning said that losses would have topped £500,000 before profitability was reached but, by the April crunch point, the financiers were fed up with reaching ever deeper into their pockets.

In their last full year of operation, the four Le Petit Blanc brasseries achieved a turnover of £6.7m - not bad, but the group was still losing about £1m a year. "If you look at the product, it was over-geared at the head office level," says Manning. "It was offering a Rolls-Royce service at Rover prices, and this didn't make financial sense."

Blanc, understandably, is unwilling to discuss the situation. He is hoping to mount a buyout of the operation himself, provided he can raise the cash. When the move into administration was announced, Blanc was reported as blaming the economy. All he was willing to say to Caterer was that "every problem has a cause".

Although the financial model was evidently flawed, there remain many admirers of the original Petit Blanc concept. Alysoun Stewart, commercial director of the chain until 2000, is still hugely enthusiastic. She says: "Raymond was the first person outside Conran to offer good food at value-for-money prices."

She describes the Oxford Petit Blanc as "phenomenally successful", saying that it became a "buzzy brasserie with a neighbourhood atmosphere".

After Oxford, Cheltenham opened in 1998. Like its forebear, it was modest in scale. But the Birmingham opening, in the summer of 1999, gave the group its first major restaurant. "Until we opened, there were no credible restaurants in the city," says Stewart. "Bank followed shortly after us, and then there was an explosion." There was a similar experience in Manchester when dining at the Le Petit Blanc's fourth premises started in October 2000.

But not everyone thought the rollout was delivering on its promises. The 2002 edition of Harden's, the guidebooks compiled from reviews by the general public, slammed Le Petit Blanc's Cheltenham operation for being noisy and mediocre, digging in the stiletto with the epithet "truly awful". Oxford was nearly as battered, being labelled "boring" and "very overrated".

The criticisms were part of a wider assault on what were described as top chefs' spin-off restaurants. The so-called diffusion restaurants of other leading chefs - such as Gary Rhodes, Paul Heathcote and even Delia Smith - came in for raspberries. The guidebook went so far as to advise diners to avoid "big-name" restaurants, accusing top chefs of "prostituting" their names.

And therein lies one of the biggest challenges for well-known chefs when they attempt to create a more affordable restaurant: the risk of disappointing customers. Diners coming to Le Petit Blanc might have expected the same experience as they had heard about at Le Manoir Aux Quat'Saisons, Blanc's two-Michelin-starred flagship operation in Great Milton, Oxfordshire.

Restaurant consultant Peter Antenen cites three key problems associated with celebrity chef operations: first, being everywhere at once; second, the culture clash between celebrity and investor; and third, the fact that competence as a chef does not mean competence in the business world.

Antenen admits that Blanc was not ridiculously ubiquitous, but he points out that the further up the fine-dining tree you try to go, the more closely the celebrity chef must be directly linked to the operation.

With Le Petit Blanc, the challenge was to use Raymond Blanc's name without creating the expectation of finding him working in the kitchen.

The clash between the money men and the creative skill of cooking comes from the analytical approach of the investors and the emotional drive of the chefs. "The suits want a return, but the talent wants artistic expression at best, or self-aggrandisement at worst," Antenen says.

The final challenge for the big-name chef, according to Antenen, is to know where his or her limitations are. "If a chef becomes a restaurateur and then a celebrity, it is usually easier," he says. "Becoming a celebrity chef and then trying to do a restaurant often leads to disaster."

It's difficult to ascertain the precise reasons for the demise of Le Petit Blanc - it may have been the cost of refitting them, the sites, the market or purely the overheads. And while the reputation of Blanc's cooking genius remains untainted, his business skills are still, at best, unproven.

So, for now, Le Petit Blanc is looking for a buyer, and there seems to be no shortage of interest. By the end of last month, the chain had attracted 91 enquiries, and 58 information packs had been sent out by Manning's firm. He expects to complete a sale by the end of this month, and hopes to sell the business as a going concern. Currently, all four restaurants are open and the 178 permanent staff remain employed.

Manning is hopeful that the chain will go on to prosper. "It is often the way that the person who buys a business the second time reaps the benefit," he says. That remains to be seen.

Making a success of casual dining
Terry Laybourne Terry Laybourne has four restaurants in the North-east of England, but they are all within 25 minutes' drive of each other. Newcastle to Durham is his furthest stretch. "This helps me to control standards," he says.

But Laybourne admits that moving from running one restaurant to four has meant a shift in approach. "It takes you into another discipline," he says. "You have to employ operational managers who come from mass catering."

He sees himself as a conduit between his restaurants, and says the hardest aspect is handing over your life's work to the care of others, albeit trusted employees.

The decision to move from fine-dining at his flagship eaterie in Newcastle, formerly called 21 Queen Street, to a broader, smart-casual approach was taken only in August 2001, after his bistros had proved successful. In the process, he effectively handed back his Michelin star.

To make prices more affordable, costs were saved on carpets, curtains, china, wine lists and in-house bread-baking. But he wanted to ensure that the food on the plate was as good as before - "although we use less expensive ingredients, such as cheaper cuts, and we dispense with superfluous garnish", he notes.

Laybourne says it was difficult to trade at two levels. Customers going from the fine-dining experience to the bistros were often disappointed, but sometimes the transition from the more relaxed and lively atmosphere of a bistro to fine dining also led to disenchantment.

When he opened his first bistro, Café 21, in 1994, Laybourne made it clear that the former pizzeria was not a fine-dining experience. He used paper tablecloths and what he describes as "relatively uncomfortable" chairs.

But a no-frills approach did not appear to be clear to diners at his next outlet, opened in Durham in 1996. "Customers were coming dressed up," he recalls. "It was only later I realised that perhaps they thought it was a fancy restaurant."

Laybourne says that moving into casual dining also meant widening his perspective. "The biggest change was producing food quicker," he says. The previous customer base was the business community and the special-occasion market, but with casual diners, the meal is often just part of a night out.

For Laybourne himself, the move has meant less time in the kitchen, but he still tries to cook most days. As he says: "I like to think I'm still a cook."

Paul Heathcote Paul Heathcote takes a more corporate approach to casual dining than Laybourne, but he stresses that this doesn't mean he spends all day looking at profit-and-loss accounts. "You do have to change your thought patterns, though," he says.

The Heathcote empire encompasses six sites and an outside catering operation. Such a broad range means it is impossible to have a direct hands-on role at each unit. "You have to give autonomy to chefs and involve them in the decision-making," says Heathcote.

He has also brought staff into the business by making them shareholders.

His first diffusion outlet opened in Preston in 1995, and sat alongside the fine-dining restaurant in Longridge, Lancashire, that opened in 1990.

It was the third restaurant, in Manchester, that gave Heathcote his biggest headache, however. "I could keep a handle on two, but the third forced me to delegate," he says. "You have to let things go occasionally, let people make mistakes."

Like Laybourne, Heathcote has kept prices low by cooking with more affordable ingredients, such as mackerel rather than sea bass and shoulder of lamb rather than best end.

Longridge went over to more casual dining late last year, as a result of changing market conditions. "It's much harder to be a fine-dining restaurant in Longridge today," says Heathcote. "A businessman a few years ago would be prepared to take the drive out of Manchester. Now, he looks in the guidebooks and sees the choices."

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