Business Profile: Malcolm John

On Tuesday, 9 August, Malcolm John boarded up the frontages of his two Croydon restaurants and crossed his fingers. The previous evening he’d observed gangs of hooded youths roaming the streets and – in the interest of staff and customer safety – closed early.The units would remain closed for another two days as much of Croydon was razed to the ground.

The next two months weren’t much better. Miraculously, neither site was attacked, but trade was decimated with like-for-likes down in the region of 90 per cent through the rest of August and most of September. “Financially it was a disaster, but it was painful for me on an emotional level too,” says John, who also operates restaurants in the London suburbs of Chiswick, Sutton and Putney.

“It’s an area that I love. I’ve brought up my family here and it’s particularly sad that a lot of local youngsters have, by extension, been stigmatised by the riots and now can’t find work,” he continues.

This rather harrowing anecdote demonstrates both the robustness of the business overall – few five-strong restaurant groups could withstand the loss of cash flow associated with such a dramatic and sustained drop in trade – and this chef turned restaurateur’s attachment to his home borough, a location that doesn’t get great press at the best of times.

Phoenix Initiative​

While many would have moped or considered setting up shop elsewhere, John has thrown himself into altruistic community activities. He’s never shirked from civic duties – prior to the riots he sat on the boards of The Turnaround Centre (an organisation to help keep Croydon youngsters out of trouble) and a recently introduced mentoring scheme to help stop knife crime and other violence in South London – but as a direct response, the Malcolm John Phoenix Initiative has been launched, which offers apprenticeships to unemployed Croydon youths within John’s restaurants.

“A lot of these kids don’t yet have the capacity to debate,” he explains. “They lack confidence and don't know how to interact positively with people outside their social circle.The hospitality industry is a great place for them to be because it brings them into contact with different cultures and different ages. They'll develop a new set of skills."

This can-do DIY attitude permeates the business. John is a driven and highly practical owner-operator: considering the volume of the five-strong estate, it’s run on a remarkably low-key basis with just an operations manager, group executive chef and a PA on the external management payroll. Until fairly recently, Malcolm did all the management himself.

Locations​

All the chef’s restaurants are primarily aimed at their local markets. His inaugural restaurant Le Vacherin opened in Chiswick in 2004 to considerable critical acclaim. This was followed by two restaurants in Croydon, Le Cassoulet and Fish & Grill, opening in 2008 and 2009 respectively, along with Sutton’s Le Cassoulet in 2009.

As the names might give away, all the restaurants offer top-notch French cooking in a comparatively casual environment. The offering across the group can be broadly described as French bistro bourgeois, but the exact proposition varies across the estate.

The business has expanded with the backing of RBS, his only other financial partner being his wife who, for reasons of marital harmony, has nothing to do with the day-to-day running of the business.

Perhaps the most notable thing about the estate is the choice of location. Sutton and Croydon are areas almost entirely neglected by independent operators with pedigree. But with low-rents, high-availability of sites and minimal competition the right operator can clean up

“I’m at a loss as to why these locations are overlooked,” says John. “There are very wealthy areas in these boroughs and the transport links are excellent. People who can’t afford to buy in Clapham see Croydon as a second option, which results in a significant demographic of affluent commuters who go to top restaurants in central London. When they go out closer to home they want comparable quality, but without the price tag, and that’s exactly what we offer."

Scalable potential​

The group's latest acquisition was a badly performing Cafe Rouge unit just off Putney's main drag, which John obtained for a 'minimal' premium earlier this year. The second iteration of the Fish & Grill brand has been a hit with Putney’s well-heeled locals and is set to become the group’s highest grossing unit, aided by a downstairs jazz bar that officially opens this month. Fish & Grill’s success where Café Rouge failed highlights both the manoeuvrability of smaller operators and the fact that diners are willing to pay a considerable premium for quality in casual restaurants.

Fish & Grill and Cafe Rouge have a number of elements in common (French theme, all-day dining, relaxed environment), but at £30 a head the former is pitched at a significantly higher price point to the latter.

“They failed to move with the times and refresh the offering. Le Vacherin closed in 2009 for a major refit and we’ll look at updating it again later this year. I'm constantly reassessing what we're offering: we've just introduced a range of biodynamic and natural wines which are going down really well," says John.

With two high-turnover sites in two vastly different areas of London (the other being in Croydon) Fish & Grill undoubtedly has legs as a scalable concept. John clearly follows developments in the corporate sector closely too. Richard Caring and Andy Bassadone’s Côte –another concept that is broadly comparable to his own propositions – is singled out for praise: “It’s a fantastic concept that’s hit the ground running. Anyone who wants to seriously roll out a brand should be looking closely at what they’re doing.”

Despite his interest in the big brands, Fish & Grill won’t be going nationwide anytime soon. “I wouldn’t rule out private equity, but I’ve got no interest in rolling out a national chain of restaurants. Going all over the country means compromising the quality. Bulk buying, centralised production units are not me at the moment, but in 10 years I might change my mind. People want different things as they get older."

A lack of confidence​

John’s current assessment of the economic landscape is equally pragmatic: expansion is absolutely on hold. “There’s a tangible lack of confidence,” he says. “Customers are coming through the door, but they’re spending less. I have no problem raising capital for new projects but now is not the right time.”In a more clement fiscal climate John would continue to mine the “untapped pockets of gold” within the outer-London neighbourhoods. He is also mindful of the law of diminishing returns: there’s a school of thought that running one restaurant attentively will yield more profit than running three restaurants on a perfunctory basis.

While John clearly has enough drive to keep taps on all his restaurants’ inner workings – there aren’t many multi-site operators that regularly work kitchen shifts to assess quality and better train and motivate staff – but opening more restaurants in an uncertain economic environment could stretch him too far.

“I’m focusing on what I’ve got now, which means improving my menus, driving more customers through the door and training my staff to provide better service and retain my customer base,” he says. “If and when this recession lifts I’ll look into it again, but I don’t want to cloud my mind with anything else right now.”