Peach Report

Café Rouge freshening up with £20m investment

10 December, 2012

Café Rouge plans to revamp its estate to get its restaurants in shape for a battle with its casual dining rivals, says the Sunday Times in a profile.

It says sales at revamped branches like Hampstead (pictured)—which recently got a £200,000 refurb—have been in double digit growth. “Everything has changed, even the lighting. I love the new look,” says Hampstead managed Tugba Acikel.

But around 120 more have yet to get the new look, and Café Rouge has a turnaround job on its hands. “At 23 years old, the brasserie chain is considered passé. Once seen as a trendy, clever take on the traditional French bistro, it now seems stale to newcomers such as Cote, Byron and Jamie’s Italian,” says the Sunday Times.

Peach’s Peter Martin told the Sunday Times: “The capital in particular is increasingly competitive. You’ve had the world and his wife opening.” Pubs have added to the competition, and Tragus financials put profits in the last year at £40.2m, down by 2% on the previous 12 months.

But new Tragus chief executive John Derkach thinks he can revive the brand, arguing that Café Rouge hasn’t been overtaken by rivals and pointing out that its day-round flexibility is a big strength. “They do capture trade during the different parts of the day and that in itself is no mean feat,” says Ted Schama of the Shelly Sandzer property agency.

The Sunday Times traces Café Rouge’s history, from its debut in 1989 via a stint at Whitbread and private equity ownership to Tragus, and suggests the revamp—which includes new menu items and more contemporary interiors tailored to each site—is well overdue. Derkach says: “If you make everywhere look the same, the day that design becomes out of date the entire estate is out of date. Each has to be sufficiently different so the design is evolving, so you don’t have that problem.” He adds that a second Café Rouge Express format site is being piloted in Southampton following the original by Euston station, and that “well north of £20m” will be invested across the main brand over the next few years. Sister brand Bella Italia is also undergoing a revamp, adding to the workload—but Derkach is up for the fight. “More than anything, it was the challenge [that attracted me to the job].”

For the full story, see High stakes for revived Café Rouge (registration required)