Mamuśka! Polish Kitchen and Bar, that has been promising expansion for over 7 years, has signed and financed a deal to open a new 240-seat location at LCR’s new Leake Street Arches development.
Mamuska Restaurants Limited, owner and operator of the highly successful Mamuśka! Polish Kitchen and Bar casual dining concept, will be building and opening and new flag ship site within Phase Two of the iconic Leake Street Arches development, the first phase of which is opening this weekend (16 June).
The new site, dubbed Location 3, will eclipse its first two incarnations, both of which had approximately 60 internal seats.
Designed by Gabor Gallov Architects to create an industrial stripped-out feel in a mixed Victorian/contemporary arch of over 4400 square feet, the location will boast 240 seats inside, 40 covers outside and a mezzanine bar that can double as a private function area.
Founder and Managing Director Ian Coll has a reputation for announcing expansion plans, and explains his reasons for waiting 8 years before making this bold move at a time when the rest of the casual dining market is facing such serious difficulties.
Coll commended his legal advisor, Hugo Greer-Walker of Stone King Solicitors, in keeping him from making mistakes along the way. “It has been so valuable to have had such great advice over these past years. That advice prevented us from getting into bad deals on the one hand, but also allowed us to move quickly when a solid proposition came to the fore. Stone King has been with us every step of the way, took the time to get to know our business and our needs, and supported our decision making with sound advice based on our specific business model.”
“We have been saying for a long time that the numbers within our sector simply do not make sense. The rents and premiums were too high and the fit-outs far too expensive, with many suppliers trying to make too much profit off a single deal. In the end, customers do not want to pay the high prices required to support the lavish spending. We waited for a reasonable win-win-win proposal where a landlord’s expectations were to receive a fair rent, but where they did not expect to take the place of the operator in terms of reward for the operation, nor expect the end customer to pay through the nose for a delicious plate of Polish pierogi dumplings. LCR certainly has high expectations from us, but because those expectations are realistic, we know that we can meet them, and share rewards out among all our stakeholders, including team members, loyal suppliers, our management team and our shareholders.”
Duko Frankhuizen of LCR added, “We reacted very quickly to the approach from Mamuśka! Their ambition to redefine expectations around Polish cuisine, attractive price point and very inclusive approach and appeal was precisely the right fit for Leake Street Arches.”
Coll continued by explaining why he is confident about such as significant expansion when other brands are struggling. “There is no question that we are facing the same pressures as those faced by our colleagues in the industry; higher payroll costs, lowering supply of qualified candidates, unreasonable business rates and unfair VAT rules”, given casual dining brands compete directly with the grocery trade, particularly the ‘ready-meal’ market. “But the difference between ourselves and some of the brands that expanded aggressively over the past 10 years, paying up to £60 a square foot or more for rent, is that we now have no external debt, and no unsustainable locations to support. Like the brands we admire and try to emulate, we have a loyal client base and a proven self-service model. Now with four times the number seats, we know that we can triple sales in this new location, but only double our wage roll. Our numbers make a lot more sense.”
Mamuśka! has a history of thriving as consumer spending and confidence wanes. Opening in January 2010, the brand quickly gained popularity due to their rock-bottom prices and healthy meals as the UK economy came out of recession. Eight years later, at under ten pounds for a main course including sides, their prices are noticeably lower than those of their competitors. And the portions are huge. Coll stated proudly, “One of our biggest problems is that we don’t sell a lot of desserts. People are stuffed after one of our main courses!”
But the low spend per head does not bother them, given their repeat business statistics. Coll recons that at any particular time, 90% of the customers in the restaurant have visited before. “Eighty percent of our clientele are non-Polish and many people – Poles as well as non-Poles – come several times per week. We don’t take that kind of loyalty for granted. We know that if we pay rents that are too high or spend too much money on a fit-out, we will have to raise prices to pay for it. We are just not willing to do that. The value proposition is as important to our customers as the atmosphere in the dining room. By waiting for the right deal before expanding, we protected our business model, our bank balance and our brand, and we have made ourselves ready for expansion just when more realistic property opportunities are coming to the market.”
The new location will also fulfil some staff welfare obligations Coll has been promising for a while. Head Chef Krzysztof Bartczak said, “The kitchen in Location 1 was physically constrained on all sides. Very soon after opening it was half the size we needed. The kitchen in Location 2 was larger, but because we had only a short-term lease, we needed to adapt what was already in place, rather than build exactly what we needed. Ian and I have designed the kitchen at Leake Street Arches ourselves, which means we will have the production, cooking area, serving space and specific equipment we know we will need, based on our first two experiences. My team and I are excited at the prospect of the new kitchen providing opportunities for us to create new menu items that reflect both traditional recipes and modern trends, and to provided even better quality and faster service. Add to all of that a proper staff welfare area, and we believe we will be far more able to recruit and retain the team members we will need for this extended operation.”
Financial Controller Michał Przybyłek, a former head chef and front of house operator himself, is confident the projections on sales are conservative. “This site has been designed to appeal to all our core markets, but with the mezzanine we will actually be able to accommodate additional markets, including the office parties, weddings, anniversaries and other celebrations, potential revenue streams that up until now we have hardly touched. Additionally, we will have four times the number of seats for peak periods, two different bar areas, outdoor space, and the benefit of sitting within this amazing Leake Street Arches concept – which has a high synergy with our twenty-something, trendy, budget-minded core market. We have every expectation of hitting our top-line sales figure.”
The deal is being financed through a director’s loan and asset financing, given Coll’s determination to retain equity until the company achieves a higher market value. Coll has sought the expertise of Amanda and Nick Stevenson of Corporate Leasing and Finance in Kent to raise the funding required to build the new site. Coll emphasised, “I know many concepts have gone to various equity market options early on, and I respect their rationale for doing it. However, despite our very high GP and operational profits, we want to lower the risk for a potential new investor and thereby increase the value of the Company prior to any partial sale, by proving beyond a doubt that the concept can achieve an even lower sales-to-labour ratio and higher net profit, through the operation of a larger site using the same self-service model that we have used in our first two sites.
That self-service experience, highlighted by the customer’s trip up to the kitchen pass to collect their food when their number is called, will be further developed with the help of Tevalis EPOS and Management Systems, who will lead the development of new self-service kiosks for the new Leake Street site. Operations Director James Corrigan said, “We have been working with Mamuśka! for the past year, getting to know their service model and very specific operational needs, as well as fine-tuning our system to deliver the management information they require to optimise their business model. We are excited to be selected again as their provider for this much bigger operation at Leake Street, including the development of self-service kiosks and a live link to their new website ordering portal.”
Given the size of the new location, Coll was asked if this will put other expansion plans on hold. “Absolutely not. We are actively looking for Location 4, preferably within 5 miles of Leake Street. We still need to spread our central overhead across several locations to prove the financial model and excite private equity firms and other investors.” But expansion is not just a financial objective for Coll. “We have a very clear vision that Mamuśka! will lead the way in educating Brits and other Europeans on the wonders and delights of Polish food and drink. Leake Street is a particularly happy place from which we will continue to build on this vision.”
NOTES FOR EDITIORS
Mamuska Restaurants Limited (MRL) is 100% owned by Ian and Paulina Coll and has operated the Mamuśka! brand since 2012. Coll developed the concept in 2009 and opened the first location in Elephant and Castle Shopping Centre with a company in which he owned a majority of shares. The partnership faltered and in 2012 the assets were purchased by the current Company to break a stalemate that was blocking reinvestment and growth. In 2015, location 1 was closed and location 2 opened across the road from the shopping centre in Elephant and Castle, at the top of the Walworth Road. A further news release will be issued on the future of location 2 in July 2018.
Leake Street Arches is a celebration of urban art, dining and entertainment live from Waterloo. Eight former railway arches next to the famous Graffiti Tunnel are being brought back to life to provide a carefully selected collection of independent restaurants, bars and entertainment spaces that capture the essence of urban culture. The redevelopment of the 23,000 sq ft space beneath Waterloo station is being led by LCR and complements the wider regeneration taking place in Lambeth. Adjoining London’s largest legal graffiti wall on Leake Street (which has made its name as a democratic cultural venue for street art) Leake Street Arches offers an exciting new street-culture led destination to the 24 million people visiting the South Bank each year. For more information see www.leakestreetarches.london.
Corporate Leasing & Finance Limited
Corporate Leasing & Finance Ltd
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Gabor Gallov Architects
Gabor Gallov, Principal
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