| UK

Risk Capital Partners bakes fresh plan to sell Gail’s for £250m

Risk Capital Partners, the private equity firm controlled by investor Luke Johnson, has reportedly engaged banking firm Nomura to explore strategic options for the UK bakery and coffee chain’s parent company, Bread Holdings

Gail's is anticipating revenues to exceed pre-pandemic levels | Photo credit: the blowup



According to a Sky News report, the sale of Gail’s parent company, Bread Holdings, could fetch a price of up to £250m ($354m).
 
Gail’s has been largely successful in adapting to take-away sales during Covid-19 trading restrictions over the last 12 months, and even opened a new store in Windsor during the first wave of the pandemic in May 2020.
 
The premium café chain is anticipating 2021 revenues to exceed pre-pandemic levels, with profitability expected to hit a record high over the next year. It is also reportedly planning to expand from its current 68 stores to more than 100 over the next three years.
 
The appointment of Nomura marks the latest attempt by Luke Johnson to sell the boutique bakery chain. In October 2018 a planned sale was put on hold due to Brexit uncertainty. Just over a year later, another sale was slated for 2020 only to be postponed due to the pandemic.
 
Johnson has been a high-profile critic of the UK government’s Covid-19 lockdown strategy and its detrimental impact on hospitality businesses. In June 2020 Johnson said he was confident Gail’s would prove resilient in adapting its business model in the wake of severe trading disruption and confirmed he was seeking a minority or majority investor for the business.

Speaking to 5THWAVE magazine in July 2020, Gail's Managing Director Marta Pogroszewska outlined how the business had adapted to Covid-19 trading restrictions. “All of our contingency planning was based around mitigating risks and understanding what the opportunities could be. We have long offered click & collect and emphasised to customers they could order everything online during the lockdown. Speed of service is really important to our customers and you can see the industry moving in that direction. Delivery has a great future in the UK, we’ve had such a positive response,” she said. 
 
Gail’s opened its first site in Hampstead, London, in 2005, and has since expanded its boutique café concept to largely affluent areas across the capital and south-east England.

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