Bellissimo
Published: 07 March, 2006
Carluccio's is one of the most powerful brands in the British catering sector. Since the early 1990s the ebullient Antonio Carluccio has been the UK ambassador for Italian food, and he is still the public face of the company. But while many celebrity chefs have had distinctly chequered business careers, the Carluccio's brand is still going strong after 15 years.
This culminated in the company's flotation on the Alternative Investment Market in December 2005. It already has 24 branches and, according to managing director Simon Kossoff, it is still growing, with sites already secured in Brighton and in Allied London's redevelopment of the Brunswick shopping centre in London's Bloomsbury.
The company was founded in 1991 by Carluccio and his wife Priscilla - sister of designer, retailer and restaurateur Sir Terence Conran - off the back of their successful Neal Street Restaurant in Covent Garden. Initially Carluccio's was purely a delicatessen, selling what were then exotic products like balsamic vinegar and extra virgin olive oil.
In the ensuing years the brand moved into wholesale, serving retailers like Harrods, Selfridges and - no surprise here - the Conran Shops. But Kossoff notes: "When I joined the business in 1999 it had never made a profit." However all that changed that year when Carluccio's trialled the concept of the deli/café, combining retail with catering.
Now, the company serves 65,000 customers a week and, according to Kossoff, is "the only true multiple restaurant/retail business in the UK." And this combination is key to the success of Carluccio's, Kossoff believes. "22 per cent of our turnover comes from the retail side, and that's reflected in our floorspace allocation," he says. "Our customers cross-trade, eating in the café and then buying bread, pastries etc to take away. The real secret is running two operations with just one set of overheads."
And the flexible approach to dining is highly popular. "There are no rules for our customers and you can have what you want when you want and at any time of day," Kossoff says.
He points out that a quarter of Carluccio's turnover is achieved outside traditional restaurant hours. This, combined with the retail element, means a Carluccio's branch achieves twice the turnover of the typical British restaurant, with a reported target of £1.25m per branch.
Currently Carluccio's is growing at about five stores per year. Experian has helped draw up a target list of suitable locations that could take Carluccio's to 100 branches and Edinburgh, Glasgow, Leeds and Bristol are high on the list. And Kossoff is clear that shopping centres will firmly be part of the trading mix. "Our branches in Bicester Village and Bluewater are among the most successful," he says. "We expect to be taking more in shopping centres."
Units range from 3,000 to 6,000 sq ft, and although the model is based on a 4,000 sq ft format, Kossoff notes that the most profitable store in the chain is also the largest.
However, he openly admits there are challenges facing the business. "All day trading is relentless," he says. "We need management with the strength and stamina of marathon runners." And he concedes the emphasis on fresh food really puts pressure on consistency.
But Carluccio's was conceived from day one as a roll-out business. "We had the funding and management in place for this from the beginning," he says. "We invest in people and the best IT we can afford. In an industry where staff turnover is more than 100 per cent per year you have to flood the business with training."
So what does the future hold? "In 1999 the business was entirely dependent on Antonio. Now, our younger customers don't know who he is. As we get bigger Antonio's in a position to work less hard running my business," he jokes.
So far Kossoff has resisted pressure from landlords to come up with a more upscale format, preferring to stick to an established niche. "People see us as not the same as a pizza restaurant, but we are competing in that market," he says.
However he doesn't rule out overseas expansion at some stage. "We'd probably do it through a franchise arrangement, and there are lots of places where it could work" he says. "But Italy'd be just too scary."
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carluccio's
Group turnover: £36.8 m
Number of stores: 24
typical store size: 3,000 to 4,500 sq ft
total selling space: c.100,000 sq ft
Co-founders: Antonio and Priscilla Carluccio
Managing director: Simon Kossoff
registered address: 12 Great Portland Street, London W1W 8QN
website: [http://www.carluccios.com]
