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James Averdieck - Gü Chocolate Puds

http://www.growingbusiness.co.uk/james-averdieck-gü-chocolate-puds.html

James Averdieck’s pudding range Gü has got the supermarkets and the UK consumer begging for seconds. He tells Matt Thomas why he’s hungry to feed the growing demand.

Nobody can be arsed to make a good pud anymore but the Brits love one,” enthuses James Averdieck, the founder and MD of Gü Chocolate Puds, formed less than three years ago and currently shifting 200,000 of its premium products each month.

“We don’t have a food heritage but we love good food. Unlike the French we can’t make it, so there’s a great appetite for quality convenience food.”

That’s exactly where Gü has found its niche, entering the chilled desserts market at the top. Its desserts look, feel, cost – and according to Averdieck – taste better than anything else on the shelf. Open them up and, if it’s an oven-ready soufflé, you’ll find they come in reusable glass ramekins – a deliberate quality mark.

“We’re the cheat’s choice,” he says. “But it doesn’t matter if people know you haven’t made it. It’s about taste, and they’re restaurant quality. Good restaurants would knock our puds out at a fiver a pop.”

At around £2.50 for a two-person serving, Gü puddings are more expensive than other products in the chilled desserts section.

“We’re right at the top of the narrow niche of chilled desserts and we’ve moved the quality needle,” admits Averdieck. “If we do have a competitor, it’s not on the same shelf, it’s Ben & Jerry’s or Green & Blacks.”

Averdieck thinks society’s current fascination with food, from fad diets to gastro pubs and celebrity chefs has left the supermarkets perfectly positioned for a proposition such as Gü.

“Food is trendy and there’s been a polarisation between healthy, diet food – which personally I can’t stand – and very indulgent food. Supermarkets have seen it with soups, pizza, pasta, wine, etcetera. We’re creating that trend in the puds market.”

Establishing a brand

Gü is more than a great tasting product: it’s a brand with wide appeal, and its packaging – black card boxes in a sea of white and blue plastic – sets it apart. There’s also an Innocent Drinks-esque element of fun and pretend amateurishness to the whole affair, while the word ‘Gü’ is highly evocative itself.

“Chocolate is about fun and indulgence; it brings out the kid in us,” says Averdieck. “The smell; it reminds you of sticking your hand in the mixing bowl. I think we’ve got a romanticised pudding thing and our central themes are fun and quality.”

Add the special ingredient ‘convenience’ and it’s no surprise Averdieck’s recipe for success is to target young busy middle class urbanites – and for him there’s a slice of West London that serves as the perfect taster. “We target the 35-year-old Fulham, Putney, Wandsworth brigade. We’re a national brand but if you target a certain type of person, then people buy into it from there.”

The building of the Gü brand and packaging was no slap-dash affair, though. “Branding is a total nightmare. You could look at hundreds of names and not tell if they’d work. I mean, you wouldn’t have picked out Mars until you saw it in the packaging.”

Branding agency Big Fish sold Averdieck the Gü brand and packaging together – bizarrely by making him believe it was a real company in Europe selling the same concept.

“They showed it me and I thought what a brilliant brand name, it’s totally right and it looks great, but fucking hell, they’ve beaten us to it – I was totally hooked.”

Once in on the secret, Averdieck deployed his own piece of unorthodox research. “I took a few boxes into Waitrose, put them on the shelf and watched to see if people picked them up – because that’s what matters. They did.”

Track record

Catching a growing niche with a premium solution; great packaging; even better brand. It’s a good story – but nowhere near the complete one.

Gü has been so well executed it will have sold £11m worth of puddings in only its second full year of trading, is well into profit and growing at 90% a year – all without raising a penny.

Most entrepreneurs wouldn’t have pulled it off. Take a closer inspection of Averdieck’s CV and you begin to understand how he has. His track record is a VC’s wet dream.

A degree in economics from Durham (during which he sold shoes to traders on dealing floors), straight into strategy consulting at Arthur D. Little. On to Safeway, during a time of aggressive growth.

Then to St. Ivel, where he worked in sales, marketing, buying and product placement, reached board level and established the company’s European business.

Twinned with the fact he’s the fifth consecutive generation of entrepreneur in the Averdieck family and there appears more to Gü’s success than stumbling on some tasty soufflés.

Market knowledge

Averdieck’s inside knowledge of the foods industry prepared him for the risks as much as the opportunities.

“The fresh foods business is very competitive and a lot of companies have gone tits-up. There are plenty of reasons not to enter; you’re dealing with very powerful supermarkets and lots of big suppliers like Northern Foods, Geest, Nestlé, Muller and Cadbury.”

However, Averdieck also knows what the big players don’t do very well.

“There aren’t many multinationals that have strong premium brands,” says Averdieck. “They tend to say, ‘if we’re going to do something we want it to be a £100m opportunity straight away’.

New ground and premium brands are almost always started by entrepreneurs – you need that human touch and big companies don’t do that very well.”

Joint venture

Most entrepreneurial brands struggle to hit the scales of supply needed to establish themselves, however. Averdieck knew while he had identified a gap, he’d need manufacturing clout. That either takes a lot of money – or a partner.

“I’ve been round most of the desserts factories in the UK, if not Europe, so I know this sector very well. I wanted a company that could deal with scale but also quality, so it had to be a sizeable patisserie.”

The partner Averdieck selected, Rensow, was a supplier of airline catering looking for new markets. A joint venture was agreed and with a combined input of approximately £100,000, Gü Chocolate Puds was born.

Rensow manufacture the self-made Gü products – there are four other suppliers from Belgium, France and the UK – while Averdieck’s side of the company arranges the logistics, sells to the supermarkets and manages Gü’s profile.

Prising open the door

The main challenge to any new food brand is getting stocked. Averdieck says, despite his contacts and experience, it wasn’t easy – and he’s under no illusions that until they landed their first orders from Sainsburys and Waitrose in May 2003, the company wasn’t really alive.

He knew what to present, however, and where the buyers reject most pitches.

“Supermarkets get sent tons of new products every week so buyers don’t want to see you. They’ll say ‘send it in and we’ll have a look it’. I made sure I got to sell to them,” he says. The key was selling a ‘ready-to-go’ product – not just a concept.

“I know the ropes. We took them the finished, packaged Real McCoy and proved the supply chain was set up. Too many people see them as business advisers who’ll help you with your brand – they’re not.”

They might be interested in taking your brand as their own, though – but that’s something Averdieck has not, and will never, consider. “Own label isn’t my bag and would drive me crazy. You’re controlled and don’t own anything. I want to build something not just supply someone else.”

Supply and demand

Supermarkets don’t just hand you six-monthly contracts then swipe them away leaving you in limbo – they don’t give you a contract at all!

“If they wanted to stop tomorrow, they could,” says Averdieck. “The whole thing could just go down, but in reality, it doesn’t, because you establish a rate of sale and work round that.”

It’s a logistical nightmare, though. Gü supplies to 90 depots, seven days a week and in such a fiercely competitive market must maintain 100% service levels. It’s made especially difficult as Gü is a fresh food product with a shelf-life of two weeks.

Predicting order levels is only half the problem – Averdieck must also ensure stock arrives on time. Gü outsources to a distribution company owned by Muller and used by Innocent Drinks and Denon Yoghurts. It never needs a full truck though, so again, it’s not straightforward.

“It’s a case of monitoring what’s going where and trying to piggyback on other companies’ deliveries by buying a bit of space in their trucks,” says Averdieck.

There’s also a constant battle with supermarkets to justify space and leverage more.

“Sainsburys, for instance, has 550 stores. We’ve got some products in all, but not all products are in all.” It’s a constant process of negotiation and brand-selling.

“Waitrose review every month, Sainsburys every three and [when they do] they are always moments of risk and opportunity.”

Prepared for competition

Averdieck knows Gü won’t stay unrivalled forever. Supermarkets have started to release premium brands and he accepts a larger company could launch a brand in direct competition.

He also knows for Gü to stay on track, he needs support at the top. While averse to taking on “stacks of people and getting big”, he has appointed a management layer to control sales, logistics, finance and product development while he focuses on growth in the sectors and new markets.

“It can go wrong very quickly otherwise, but the business can now run logistically without me.”

As to where he takes it next, Averdieck is looking to exploit Gü’s potential quickly over the next 18 months by increasing placings, strengthening its range and, crucially, for the first time, marketing the brand. He predicts this year’s £7m turnover will double in 2006 with the capability to hit £20m.

There’s been no shortage of offers to help and Averdieck says he’s getting unsolicited VC calls weekly and has had a number of offers from larger companies. While he admits an exit is his end game, he’s not interested at the moment.

“I can see how I can take it from a £10m to £30m-business so what’s the point in getting someone else involved?”

A taste for it

When an exit is realised, Averdieck admits he’ll find it hard to put his feet up. “I’m a restless soul,” he says. “Could I be a serial entrepreneur? I don’t know, but I’ve certainly got the taste for it.”

And fortunately for Averdieck, it seems the UK consumer has a taste for Gü too.

Zain / Celtel - Foundation

Terry Rhodes - Co-Founder of Celtel (Zain) on AFRICAN BUSINESS http://www.africasia.com/africanbusiness

On March 31, 2005 Celtel International announced that it had accepted a takeover offer from MTC, one of the Middle East's leading telecom companies with operations in Kuwait, Jordan, Lebanon, Iraq, and Bahrain.

With six million subscribers across 13 countries, Celtel has the largest geographical footprint of any telecoms operator in Africa. Stephen Williams talked to Terry Rhodes, a co-founder and the company's chief strategic officer, about Celtel's remarkable history leading up to the takeover.

Afican Business: The $3.4bn takeover of Celtel International by Kuwait's MTC telecoms group took many industry watchers by surprise--most thought you intended to float on the Johannesburg or London stock exchanges. What do you think made Celtel so attractive to the Kuwaiti company?

Terry Rhodes: I think I can best refer you to the MTC's vice-chairman and managing director, Dr Saad Al Barrak. When we signed the takeover agreement in London last March he said that together, MTC and Celtel will leverage the strong synergies, shared cultural values and heritage which exist between the Arab world and sub-Saharan Africa. We at Celtel look forward to working with MTC to drive this vision forward.

AB: One of Celtel's most innovative strategies in recent years has been in working towards interconnectivity across African national borders. What kind of progress have you made?

TR: In the past it has been very difficult to call from one African country to another African country because call routes went through Europe and back to Africa again following the old colonial administrative pattern. That does not seem to make any sense to us because surely Africa wants to keep its own telecom revenues. So part of what we are trying to do is establish gateways to allow us to carry call traffic in and out of the countries where we operate. We have established these gateways in most of the countries where we operate.
Beyond that, if we happen to have cell phone networks in adjoining countries that we can connect directly, then we can say this is a neighbouring country call, why should it be subject to international call charges?

AB: Have you started this neighbouring country service?

TR: Yes, it took some two years of negotiations, but we now have a direct link across the River Congo, between the DR Congo and Congo Brazzaville. And what happened when we made the connection? The volume of calls increased substantially as the charges tumbled. And we want to do the same in East Africa where we are the only operator to have a presence in all three EAC countries. We want to make it much easier for our customers to move between Celtel networks, for example allowing a visiting subscriber to be able to buy a pre-paid top-up scratch card in a neighbouring country to top up their credit. That's not all. We hope to introduce a service so that you can transfer top-up credit to another phone within the network. Say you live in the city, and there's someone you want to call in your village, but there's no money in the village or the top-up scratch card distributor has run out of cards. Well, you can buy credit on your phone in the city and send that to the phone in the village. Now there is no excuse for not phoning your Mum on a Sunday!

AB: Just to return to this cross border neighbouring country roaming service. What are the constraints to introducing this service. Are you getting this message across?

TR: We do not have regional harmonisation yet, to put it briefly, and there are still examples of protectionism around and consequently higher costs and poorer reliability for calls that may just be a few tens of kilometres in distance but that just happen to cross national borders. But increasingly people are seeing that this is what customers want. For example, we advised President Levy Mwanawasa of Zambia that if he allows us cross-border roaming, the price of international calls will halve and the quality of the service will double. Of course it is up to the authorities to decide how long they wish to delay cross-border roaming services, but they know as well as we do that potential investors in Zambia are concerned over the country's high cost of international telecommunications.

AB: How did Celtel get started?

Terry Rhodes: The original company, called MSI, was founded in 1989, as a software consultancy house in Europe. We acquired a number of small stakes--in India, China and Hong Kong, and then the one that became the most relevant, in Uganda, where we invited a big operator to be the major partner. The one that chose to come and join us was Vodafone.

AB: What led you to decide that Africa had sufficient potential, and has Africa met or exceeded your original expectations?

TR: We saw real potential if we could raise some money and develop some opportunities. Of course, ever since our initial minority investment into Uganda we had been looking at other opportunities. Did this match the original vision of what we saw as Africa's potential? Yes! This was exactly what we had decided to do.

AB: What have been the key factors that have allowed you to grow at such a rapid pace?

TR: One key factor was timing. In 1998, with an industry track record and a business plan, you could get backers. But after the internet bust and the telecom industry problems of financing and so on in 2000/2001, nobody would have given you the time of day. So 1998 was a good time to start from the industry perspective, and it was a good time to do it from the African perspective because Africa was starting to liberalise and wanted competitive patrons, wanted FDI. Another key factor was the development of pre-paid technology - pre-paid matches Africa's cash economy. Pre-paid says 'I don't need to know anything about you, all I need to know is that you want to be a customer. Welcome to the network!' More than 98% of Celtel's customers are pre-paid including corporate customers, and that's typical for all telecom operators working in Africa.

AB: Is there anything that distinguishes mobile telephony from any other business operating in Africa?

TR: This is a capital-intensive business, a long term business--with 10, 15, 20 and 25 year licences, and we are cementing our assets into the ground. This is long term infrastructure that means we have to be part of the local community, part of the local economy, part of the local society.

AB: How did you first raise capital to grow Celtel's business?

TR: One of the first shareholders to back us were what was then the Commonwealth Development Corporation (now Actis-CDC Capital Partners), the British government owned development finance arm. Then we won the backing of the Dutch and German equivalents--plus the IFC, the investment arm of the World Bank.

Celtel proved that the twin aspects of a profitable business and a development agenda can work and later we attracted private sector shareholders--such as venture capital groups out of the US like Bessemer Venture Partners and General Atlantic Partners, plus major private funds like Citigroup and Capital Group.

AB: In October of 2004, Celtel won the International Finance Corporation's (IFC's) inaugural Client Leadership Award for sustainable development. Out of the many hundreds of companies considered for the prize, why do you think Celtel was so honoured?

TR: The IFC was looking to award a successful company that not only made a profit but also made a positive impact on the economies and the development of the countries they worked in.
I think they recognised the positive impact the expansion of telephony makes on enabling other businesses to develop.

Let me give you the specific example of one of our customers, a banana trader who grows his fruit on the slopes of Mt Kilimanjaro and trades them out of Dar es Salaam, some 250km away.
Before our network covered his plantation he had no way of knowing what quantity of produce he had ready on what day and how long it would take to get it to Dar es Salaam. He was obliged to travel back and forth to check the price of bananas in Dar es Salaam. Now he can do it all with a phone call. You have to see the individual examples to realise the effect that becoming part of the connective world in the market economy can make on trading and exporting.

This is not just about the 6,000 or so jobs that we have directly created in Africa, or about the possible 60,000 jobs through the distribution of cards and phones and so on, it is about what those six million Celtel subscribers can do with a phone that they could not do before. It is the developmental impact on the communities we serve that the IFC recognised.

We want to be a flagship company not only in terms of the technology but also in the social standing we have in all the countries we operate in. About 1% of our revenues are spent on community projects, primarily on education and health, and often at really low-level integration--for example providing supplies to maternity hospitals in Zambia or building a new school in rural Sierra Leone. Telephones are important, but we recognise they are not everything!

http://www.zain.com/

Zain / Celtel - Start-up

Celtel (Zain) - Start-up

Celtel, a mobile-phone company serving 13 countries in east and central Africa, is showing that new ventures can thrive when operating in some of the world's poorest countries. In fact, Terry Rhodes, Celtel's chief strategy officer, argued that the obstacles to operating in Africa actually created his company's market opening. "We sat down in the mid-1990s and wanted to do a phone company where we could be in a leadership position," he explained. "We did a global assessment and concluded that the best place was Africa because it was the least developed area in telecom. That gave us an opportunity to compete against the big boys, who have avoided Africa."

Founded only six years ago, Celtel has raised and invested about $800 million, and has 5 million customers and 6,000 employees in a region where mobile phones remain uncommon. Although the company serves Africa and was founded by an African -- Mohamed Ibrahim, who is Sudanese -- Celtel is based in the Netherlands. "We are run out of Europe because that's where the bulk of the money, technology and skilled people in our business are," Rhodes said. "About a third of our money was raised in the U.S., 1% in Africa and the rest in Europe."

As Celtel has built out its network, its executives have learned that western ignorance causes unique problems for people trying to create multinational businesses in Africa. The company won its first mobile license in Uganda. At the time, it approached a big American phone company about being its partner. "A board member there told us, 'We can't go to Uganda. It's run by Idi Amin,'" Rhodes recalled. "This was 1995." Ugandans drove Amin, a notoriously brutal dictator, into exile in 1979. Celtel's executives pointed out his error -- diplomatically, of course. The American's response: "If I don't know that, how do you think I'm going to persuade the rest of the board?"

Like many African businesses, Celtel has had to wrangle with political corruption. "Of course, we get approached for what I'll call 'contributions,'" Rhodes said. "We say, 'Mr. President, I understand that you're running for re-election, but all contributions have to be taken to our board."

Shakedowns such as this happen even though Celtel has carefully sorted through the countries in which it operates -- and those in which it refuses to. "We had an opportunity in West Africa and couldn't get sufficient comfort from the government there that they would stick to the rule of law," Rhodes noted. "So we gave our license back and wrote off $750,000. The government thought we were joking. They come back to us every year and say, 'Are you sure that you don't want to invest here?' We don't want any special treatment. We just want to be able to carry on business the same way as we do in other countries. Our assets are cemented into the ground. If something goes wrong in a country, we can't pick them up and go somewhere else." Getting African regimes to operate legally and predictably is probably the biggest obstacle to the continent's development and to the continued growth of entrepreneurial businesses, Rhodes said. "African governments need to show the African community that they are living by the rule of law."

http://www.zain.com/

Whitbread - Expansion

India’s population is the second largest globally and accounts for 17% of the world’s population. India’s size is roughly one-third the size of the U.S and has a population 370% greater than U.S, at roundly 1.1 billion. U.S. has an inventory of approximately 4.59 million rooms compared to the Indian branded room inventory of roundly 90,000-100,000 excluding the unorganized sector, which represents India’s tremendous potential or hotel industry.

The industry will further benefit from the rising disposable income levels among Indians due to surge in economic activities.Various domestic and international brands have begun creating joint venture partnerships, co-branding and/or re-branding existing properties, and developing Greenfield projects.

The following are the major domestic and international investments in Indian hotel industry. These include Foreign institutional investments in India hotel industry:

Joint Venture Hotel Investments:

IndiaAccor and Interglobe Enterprises formed a 60:40 joint venture to develop 25 ‘Ibis’ brand hotels in India over the next 10 years with an estimated investment of around $200 million.

Bessemer Venture Partners and New Vernon invested approximately $8.5 million in Sarovar Hotels for the development of the Hometel brand in India.

Warburg Pincus invested approximately $60 million to acquire a 27% stake in Lemon Tree Hotels Emaar MGF.

WHITBREAD announced a 50:50 joint venture with Emaar-MGF to develop 80 hotels in India totaling 12,000 rooms and branded under Whitbread’s Premier Travel Inn with an investment plan of $600 million over ten years.

Temasek Holdings acquired a 21.74% stake in GL hotels for approximately $30 million.

Credit Suisse invested $50 million in Park Hotels and acquired approximately 15% stake. Kotak Realty Group announced their acquisition of an 11.11% stake in Pride Hotel Group.

Hilton and DLF have tied up to develop 75 hotel projects in India over the next five to seven years.

A joint investment in Lemon Tree Hotels by Kotak Realty Fund and Shinsei Bank was announced in with an estimated investment of around $30 million, which equated to a 5.9% stake.

Goldman Sachs announced it would invest approximately $80 million in a luxury deluxe hotel in Bangalore.

http://www.whitbread.co.uk/

Pret A Manger - Globalisation

Pret a Manger founders sitting pretty (from TELEGRAPH.CO.UK)

The founders of Pret a Manger have sold their biggest sandwich: a £350m deal with a private equity firm and a bulge bracket Wall Street bank. Ben Harrington looks at the genesis of the chain and how the new owners want to expand 'pretability' in the US.

It's the sandwich chain that brought us crayfish and avocado, chrome interiors and a charity that distributes unsold food to the homeless. It has revolutionised the lunchtime eating habits of millions of office workers with freshly made food and witty apologies for having to charge VAT.

Now the founders of Pret a Manger, Julian Metcalfe and Sinclair Beecham, have sold the business for £350m, making themselves a fortune of at least £50m each and handing over ownership of the now iconic chain to private equity.

Having carefully built the impression of an anti-corporate ethos over more than two decades, the pair have sold to Bridgepoint, a UK private equity fund, and Goldman Sachs, the most powerful investment bank in the world. Butties have become big business, and fancy ones at that.
Pret sold 30m sandwiches last year, washed down with 20m coffees. It's branched out into sushi and sold 1.4m packs of raw fish as a result. Customers get through 12,000 cups of miso soup a week.

Having conquered a British palate more used to cheese and tomato on white than falafel, spinach, tomato and spicy yoghurt on wholegrain, the company wants to expand abroad having already started in New York.

"A key market for us is Manhattan," says Clive Schlee, Pret chief executive. "Zagat, the influential US food magazine, has called us the best British invasion since the Beatles."
The bankers now in control, who probably previously sent out for the chain's smoked salmon, wild crayfish & Dijon dressing salad, will need to get to grips with a chain that, rather quaintly, still has kitchens in all of its stores. The idea is that staff can create freshly made pastries, sandwiches and sushi everyday while other mass food retailers tend to centralise production to reduce costs.

Will that be the fate for the Pret sandwich? Will the new shareholders demand factory production to reduce costs, and maybe reduce fillings? "Absolutely not," says Schlee. "For Pret, such an idea is like putting garlic to a vampire. Freshly made food gives us an enormous competitive advantage. During the process we got some of the Bridgepoint executives into the kitchen so that they could understand that".

Metcalfe and Beecham's first store near London's Victoria station opened 22 years ago, latching on to the new consumer boom of the mid-eighties and the demand for specialist retail outlets that catered for a more sophisticated and demanding public. Sick and tired of the grey, drab consumer experience of the 1970s, Pret a Manger caught the new consumerist spirit of Margaret Thatcher's more affluent decade. By night the new breed of yuppies had acquired a taste for Bollinger and by day they certainly wanted something more than a limp ham sandwich for their lunch.

Just as Anita Roddick brought cosmetics with attitude to the high street in a retail revolution aimed at women demanding emancipation from drab department stores, Metcalfe and Beecham gave lunchtime a makeover while making sure people felt good about what they were eating. Just as Body Shop inspired a host of specialist retail outlets, such as Sock Shop and Tie Rack, Pret a Manger has spawned countless copycats specialising in everything from soup to sushi.
Back in 1986, the two men had no idea that Pret would end up as a global retail brand stretching across three continents which would earn them millions.

While in their twenties, they stumbled across the idea as they hunted for a decent place in central London to buy a quality sandwich during their lunch break. To legions of fellow workers, the British high street offered only a depressing collection of greasy spoons and shabby sandwich shops. Pret, however, could have been killed off at birth.

Having decided to fill what they saw as the gap in the lunchtime market by launching a delicatessen, the young entrepreneurs nearly went bust when the venture lost £80,000 in its first year. Needing to learn quickly, they quit their day jobs as surveyors to take control of the first Pret which they subsequently launched with a £25,000 bank loan, finding a property nestling next to the dilapidated Victoria train station.

It took them five years to get the formula right, but today Pret is one of Britain's most popular sandwich retailers: it has nearly 175 shops in the UK, and outlets in New York and Hong Kong, which together generated earnings of about £30m from sales of £223m last year.

That success has led to the Bridgepoint and Goldmans investment. But the two financial investors are not the first to try and profit from the Pret recipe. Back in 2001, Metcalfe and Beecham sold a 33 per cent stake in their business to fast food giant McDonald's for £50m, a controversial move for a company that had styled itself as anti-big business.

Having done the deal, the pair took a step back from Pret and went their separate ways. Beecham stepped down, although he remained a non-executive director, and pursued a new venture, an affordable but smart hotel based in the heart of Cool Britannia, Hoxton.
Meanwhile, Metcalfe - who is divorced with four children - set off to launch a hip new sushi chain Itsu along with Schlee before he became Pret's chief executive.

Metcalfe's life has never been short of the sort of drama beloved of gossip columns, no more so than when Camilla Tobias, wife of the actor Oliver Tobias, revealed that her 19-year-old daughter, Celeste Tobias, was in fact Metcalfe's daughter.

But while the founders were off pursuing new careers, the Pret management installed to look after the shop, including then chief executive Andrew Rolfe and his deputy Harvey Smyth, had set off with some grand expansion plans of their own with Japan and the US in their sights.
However, with the founders' sure touch lacking, things started to turn stale and the expansion plans ran into trouble. Pret was forced to drop plans to open 80 stores in Japan, after reaching just 14, and had to tone down its original US growth plans.

Rolfe and Smyth left the company in acrimonious circumstances. They were replaced by Schlee as chief executive, chairman Larry Billett, a former Salomons banker, and Metcalfe, who returned full-time as creative director to focus on developing innovative food ideas. Beecham, though, never returned to a full-time role.

"Bridgepoint was persuaded to buy the business on the back of the existing management's three-year plan," says Schlee. Since Metcalfe's return Pret appears to have rediscovered its focus. And now they have the backing of Bridgepoint and Goldmans, Schlee believes it is the right time to re-ignite plans for international expansion. There is now a plan to press ahead abroad by doubling its number of shops in New York to 14.

"Manhattan is a key market for us and we are looking at opening up in Washington this year," says Schlee, who used to work for Jardine Mathieson in Hong Kong.

The recent auction of Pret, which has lasted almost nine months, has been as colourful as some the company's history. Initially, Metcalfe created a huge fuss a year ago when he blurted out that the company was examining a float on the London stock market while attending a book launch - but later, investment bank NM Rothschild was instructed to carry out a private sale of the business.

There then followed numerous bidding rounds with a number of different firms, including Icelandic investment house FL group, dropping in and out of the auction process. Eventually, Billett, as Pret chairman, sidelined NM Rothschild to take control of the auction process himself, with bid proposals submitted directly to him instead of the company's investment bankers.
One thing the new owners will have to get used to is the company's quirky culture, including a promise by top management to speak directly with unhappy customers. Metcalfe is on the record promising that "if you were to ring up today saying I've just bought an avocado wrap and there's too much salt and I want to speak to Julian Metcalfe, I guarantee you'll be put through to me without a quibble".

One of its most noticeable successes is the advantage it's taken of the huge influx of young foreigners looking for work in the UK. Even in a sandwich shop in the UK, you can earn a lot more money than a town square cafe in central Europe.

Potential recruits are assessed for the quality of their English, their "warmth" and what is referred to as their "Pretability".

They then carry out a day's paid work and other staff are asked what they think of them. If their colleagues like them, they get a job offer.

So, are the all important Pret staff happy with the change of ownership?

On Friday, staff at Pret's Victoria store weren't giving much away, but what is clear is they are happy with the status quo and don't want the company to change.

"Julian and Clive have e-mailed me this afternoon to tell us about the deal and to say there are not going to be any major changes - and I hope there aren't," said the manager of the Victoria store.

However, with private equity investors now on board, the staff may find some new ingredients introduced to try to improve Pret's successful recipe for business.

http://www.pret.com/