On a mission to make noodles the next pizza
Sunday 09 February 1997
The first Wagamama opened close to central London's Tottenham Court Road in April, 1992; the second, in nearby Lexington Street, started just over a year ago. But the restaurants have been so effective at capturing the public imagination that the operation already has a turnover of about pounds 5.5m.
Foreign & Colonial Ventures last year took a 33 per cent stake in the business, and 34-year-old Mr Yau is confident that he can open a third location this year. He has plans to open four more sites in London over the next three years and branch out by setting up in Manchester and other regional centres. Once there are six to eight units, he thinks the company "should be geared up for some sort of flotation".
And after that? "I think our aim is really to take the concept to the United States. The concept is made for the US market. Potentially, it could be biggest there," he says.
That concept is a niche between fast food and casual dining. The idea is that customers go to a Wagamama on the way to somewhere else, such as the cinema or a tourist attraction. Moreover, the cooking - a Japanese cuisine known as Chinese-style noodles - is easy to master for non-Orientals and caters more easily to these health-conscious times than burgers and other fast foods.
Though customers share long tables and sit on simple benches, the food is served at the table rather than collected. And, with his keen eye for detail, Mr Yau explains that the typical customer is aged between 18 and 35. During the day, he or she is likely to be a tourist or office worker, but less easily definable in the evening. The average spend is pounds 9 and the average stay is half an hour during the day and an hour in the evening.
Although Mr Yau's father was sceptical about something as untried as noodles for the mass market, he was one of the original investors. He made the right decision: the business was serving 1,000 customers a day in the first year, and he made a good return when Foreign & Colonial bought out him and the other shareholders.
In fact, the success was so great that the company soon had problems obtaining enough noodles to meet demand. Having started with a local supplier, it had to resort to importing the basis of its menu direct from Japan - which created its own problems when the pound started to fluctuate against the yen.
Though Mr Yau says that dealing with this was harder than running the business, he has so far resisted bringing in much in the way of outside management. He is planning to recruit a non-executive chairman to raise the company's profile in the run-up to flotation, but has largely relied on the advice of Rees Pollock, a small accountancy firm that specialises in helping growing businesses.
His confidence that the idea has international appeal comes from a combination of the interest in healthier eating, comments from his customers and the fact that the majority of the investment enquiries he receives every week are from the US.
"I believe that noodles are going to be the next pizza," he says. "When we first opened there was just us plus one other. Now, there's more than 10 in London."
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