Activities

Pret A Manger (which means ready-to-eat) is a leading player in the UK sandwich bar market, offering nutritious, freshly-made, chemical-free foods. It operates mainly in the UK but also has branches in New York and Hong Kong.

The group was co-founded by Julian Metcalfe and Sinclair Beecham who met while studying property law in London. Both have been awarded MBEs for their achievements with Pret. 

In addition to Pret, Metcalfe has established a London chain of conveyor-belt sushi restaurants called Itsu, which currently has branches in Chelsea, Soho, Canary Wharf and Hanover Square. Beecham set up Quest Hotels last year to open a limited-service budget luxury hotel in London’s Shoreditch in March 2006.

Timeline

• 1986: Property law graduates Julian Metcalfe and Sinclair Beecham open the first Pret in London’s Victoria in August. Within the first year, the sandwich shop is serving more than 7,000 customers a week. Within a decade, the group has grown to 45 stores.
• 2000: The company makes its first foray overseas with the opening of a branch in New York in July. Metcalfe steps back from the day-to-day running of the company to concentrate on the Itsu sushi restaurants that he launched in August 1997.
• 2001: Fast-food chain McDonald's buys a 33% stake in the company for £50m.
• 2002: Pret moves into the Asian market with the opening of outlets in Hong Kong and in Japan (in concert with McDonald’s Company Japan).
• 2003: Metcalfe returns as creative director in March following the departure of chairman Andrew Rolfe and deputy chief executive Harvey Smyth. The changes follow two years of pre-tax losses of £20m in 2002 and £6.7m in 2001.
• 2004: Pret trials a lounge-style café-restaurant concept called Pret Café. Although it has been dropped as a separate concept, the more comfortable style will roll out to existing stores.
• March 2004: The group exits the Japanese market after setting up 14 branches over an 18-month period.

Operating data

The group made its first significant profit for four years in 2004, when operating profit increased by £7.3m to £7.8m. Turnover grew by 15% to £152.5m. Net borrowings dropped by £9m to £16.9m.

Number of shops: 148, including 10 in New York and seven in Hong Kong.

Number of employees: more than 2,200

Strategy

A reorganisation involving the closure of a number of loss-making shops and a reduction in overheads in all markets started in 2002 and continued into 2003. The group is in the process of redesigning its UK outlets and plans to open around 20 new outlets in the UK during 2005. It is also looking at a new site in New York and expects to have nine outlets in Hong Kong by the end of the year.

Chief executive

Clive Schee

Key directors

Creative director: Julian Metcalfe
Commercial director: Simon Hargraves
Director of shops: Andrew Walker
Development director: Andrew Shanahan
Finance director: Jim Pickworth
Human resources director: Andrea Wareham
Director of Pret Europe: Sinclair Beecham

Contact

1 Hudson's Place
London
Greater London
SW1V 1PZ

Tel: 020 7827 8888
Fax: 020 7827 8829

E-mail:
Website: http://www.pret.com

Commentary

In 2004, Pret was the fourth largest player in the £3.5b UK sandwich bar market and the sixth largest company in the £1b branded coffee bar sector. The brand regularly wins the consumers’ vote for food quality and cleanliness in Allegra’s annual reports on the coffee bar market.

Prêt focuses on nutritious food-to-go, using high-quality ingredients and rejecting the use of obscure chemicals and genetically-modified substances. Food is freshly-made each day, packaged in recycled cardboard rather than plastic, and unsold items are donated to the homeless at the close of play each evening.

The group’s expansion has accelerated since McDonald’s bought a 33% stake in the group and enabled it to penetrate the Asian market and increase its presence in New York.

However, the rapid pace of expansion contributed to swingeing losses in 2001 and 2002 and the company has since rationalised its estate and closed unprofitable outlets. The process included quitting the Japanese market in early 2004.

The first Pret Café, in a converted store in Putney, boosted weekly sales by 50% and average spend to £6, and was followed by three more branches. Although it has been dropped as a separate concept, the format is to be extending to existing Pret shops.