Smoke House Deli owner Impresario in talks to raise Rs120 crore2 min read . Updated: 17 Apr 2015, 01:33 AM IST
Restaurant chain's founder reaches out to more than 6 private equity firms to raise funds for its Smoke House Deli outlets, Social chain of bars and cafes
Bengaluru: Restaurant and bar chain Impresario Entertainment and Hospitality Pvt. Ltd has hired Avendus Capital to look for potential investors to raise as much as ₹ 120 crore to strengthen its Smoke House Deli and Social brands.
The move, aimed at catering better to the growing demand for casual-but-affordable dining spaces and cafes in tier-I Indian cities, comes two years after the restaurant chain scaled down its Mocha brand, which suffered following a ban on hookah smoking in public places.
Riyaaz Amlani, founder of the 14-year-old restaurant chain, has approached more than six private equity firms to raise funds to open more Smoke House Deli outlets and expand the year-old Social chain of bars and cafes in the country. In 2011, Beacon Investments and Mirah Hospitality had collectively invested ₹ 40 crore in his business.
Over the past year-and-a-half, Indian consumers have drifted away from the idea of fine dining to casual dining, a trend that is aiding the growth of trendy eating-out options such as Smoke House Deli, Amlani said.
“The concept has really taken off with tier-I consumers," Amlani said in an interview at the chain’s Social outlet in Bengaluru’s Church Street area, adding that more expensive dining experiences took a bit of beating over the past two years, driven by the consumers’ unwillingness to shell out more cash per meal.
A typical flagship Social outlet is about 1500-2,000 sq. ft in size, has a bar, and offers breakfast and all-day meals. Impresario spends roughly ₹ 2 crore to set up one of these outlets. Average price per cover (APC), or the amount of money spent by a guest at a Social outlet, is roughly ₹ 700-800. Going forward, Amlani will look at opening more compact Social outlets of 1,000-1,500 sq. ft.
“The young consumers don’t just want a café or another coffee shop," Amlani said. “They will want to step in to spaces such as Social that are more accessible neighbourhood cafes that double up as work spaces."
Take entrepreneur John Jacob, for instance. He is in the process of setting up his own start-up and frequents Social on a weekly basis to work or meet new people. Jacob, who spent 14 years working as a consultant in New York, finds the concept highly innovative. “It’s just the kind of space young people, especially creative people, need to socialize at," Jacob said.
Impresario, which operates 40 restaurants and cafes in 14 cities, plans to add 60 Social outlets in the top five Indian metros and open 20 Smoke House Deli outlets across India.
Pankaj Renjhen, managing director of retail services at Jones Lang LaSalle, endorsed the concept but said opening 60 outlets could be a difficult proposition.
“Twenty-five to 30 may be a more realistic figure, unless we have substantial growth in the number of shopping centres or food complexes, which, currently, not too many developers are investing in," Renjhen said.
Impresario’s expansion target also seems ambitious as publicly traded fast-food chains have reported lower sales growth on a store-level over the past multiple quarters.
Same-store sales growth, a measure of sales at stores open for at least a year, which averaged 22% in 2009-2012, fell to 1.6% in 2014, according to a January report by Societe Generale.