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British cafe chain buys French

AFTER SERVING steak and frites for more than 20 years, Chez Gerard has finally added a new dish to its menu: Le takeover.

Yesterday, the London French food chain announced it was buying Richoux, a chain of Gallic-style cafes from its owners , the Da Costa family, for pounds 7.25m.

The acquisition signals the desire by Chez Gerard's (British) owners to enter the middle market for French food, which at present is dominated by the Cafe Rouge and the Dome chain, owned by Whitbread.

Chez Gerard chairman and founder Neville Abraham said: "Richoux takes us quickly into the pounds 5-15 a head market and is less dependent on highly- skilled staff," helping the company to keep down costs.

It would also help Chez Gerard to weather the effects of any economic downturn, which, traditionally pushes people away from expensive restaurants towards cheaper alternatives. Richoux had sales of pounds 5.97m and a pretax profit of pounds 308,000 last year

Chez Gerard said it planned to open at least four new Richoux restaurants over the next two years to capitalise on the current trend for cheap French food.

But the company will face stiff competition from other operators such as Cafe Flo and the Pelican Group, owner of Dome and Cafe Rouge, which was bought by Whitbread for pounds 133m in 1996.

The Pelican Group runs 145 restaurants throughout the country and plans to open a further 19 in 1998-99. It employs more than 3,500 people.

Chez Gerard is a much smaller concern and has so far targeted a richer audience. It owns six restaurants of the same name in central London, which specialise in steak, chips and vintage French wine. The company also runs two fish eateries in London, called Livebait.

Founded by Mr Abraham, a former wine merchant, and Lawrence Isaacson, a marketing specialist, in 1990 through the purchase of three French restaurants in London, Chez Gerard has grown in less than 10 years in a pounds 20m a year public company quoted in the London stockmarket. It now cooks more than 250,000 steaks a year for more than a million customers.

The founders expanded the company gradually through a careful selection of prime London sites and have always ruled out an expansion to other parts of the country. Mr Abraham said the recipe for Chez Gerard success was simple. "Our customers can get excellent steak and frites and a bloody good bottle of French wine."