Pret A Manger wins £ 100million funding to double in size
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The owner and one of the founders of Pret A Manger gave the sandwich chain Â£ 100million to double in size and open stores in five new countries, after a year in which its sales have more than declined A half.
The financing, from Luxembourg conglomerate JAB Holdings and Sinclair Beecham, one of its original founders, will allow Pret to open 200 stores in the UK and recruit 3,000 employees by the end of 2023, a indicated the company. JAB invested Â£ 185million in the business during the pandemic.
Pret plans to open stores in five international markets, in addition to its existing overseas locations in the United States, France, Hong Kong and Dubai, although it has not disclosed where. It has 550 stores in total.
âOver the past few weeks and throughout the summer, we have started to see a very strong recovery,â said Pano Christou, Managing Director of Pret.
Trading in the past fifteen weeks has grown 15% from the previous fortnight and sales at its City of London stores are back to 72% of 2019 levels, Pret said.
At least half of the new UK stores will be managed by franchisees who will pay royalties to Pret based on operating performance. Stores that perform better in regular business audits will pay less.
The company said most of the new stores will be located in regional cities and suburban areas, as well as at highway gas stations. Its only site on a commercial park, opened in Orpington in 2017, outperformed during Covid-19 with sales 30% higher than in 2019.
âIt’s really for getting out and growing,â Christou said. “I know Pret has been viewed as a business operating in urban centers, but we see it as a model much more than an urban staple.”
Founded in 1983, Pret built her business on selling sandwiches and coffee to urban commuters looking for a quick lunch, but her day-to-day business was hit hard by the lockdowns.
Revenue fell 58% to Â£ 299million in the year ending late December 2020 from the previous year, according to accounts filed this week. Pre-tax losses fell from Â£ 26m in 2019 to Â£ 256m in 2020.
It laid off 3,290 employees and secured an emergency loan of Â£ 150million to weather the rest of the crisis. In his accounts, he indicated that if this could not be extended and the situation with Covid worsened, there were “significant uncertainties which could cast significant doubt on the group’s ability to continue operating”.
To offset the sharp drop in downtown traffic, Pret launched new services, including a line of supermarket products, a delivery menu, and the sale of coffee beans on Amazon. Christou said he expected these to account for up to 30% of revenue as the group evolved to take advantage of a long-term model of more people working from home.
He also launched a Â£ 20 monthly coffee subscription which Christou says is “growing rapidly”. It was launched in the United States last week.
Following a dispute with staff over wages, Pret said he had increased wages by at least 5% for in-store employees and reinstated a Â£ 1 service bonus that was removed for the pandemic. He has not reinstated paid breaks for staff, he said.