EXCLUSIVE: Benito's discusses future plans amidst COVID-19 shutdown
CEO Michael Pearson talks to QSR Media on the Mexican chain’s next steps.
With “no option” but to cease trading, Mexican restaurant chain Benito’s Hat has filed for administration after the impact of the coronavirus on the restaurant industry.
Administrators Begbies Traynor had been engaged in late January to assist with marketing Pico’s, trading as Benito’s Hat, for sale. Eventually, a sale of the business and assets at four of the restaurants – Covent Garden, Farringdon, Oxford Circus and Oxford Westgate – had been reached.
Michael Pearson, the CEO of Benito’s, led the acquisition of the Benito’s business out of administration - with new backers.
Speaking to QSR Media, Pearson said a brand refresh is imminent to ensure they remain competitive and relevant post-shutdown.
“I’m mindful of the fact that this is a business that has been around for 12 years and has a really loyal following and so I want to be true to the brand’s core values and ethos. The refreshed branding has meant that we are removing the ‘Hat’ from the Benito’s name, we will be updating colour schemes and menu layouts and adding back some old favourite products,” he said.
“The current shutdown gives us the chance to really think about our offer and positioning and make any tweaks before we reopen in the hopefully not too distant future.”
At the moment, Pearson assumes that due to the shutdown, the business will be closed for around 3 months before a return to “any kind of normal trading.” He also lauded trade body UKHospitality in lobbying to ensure the government supports the sector but says gaps remain.
“There are still gaps in the support they are providing, particularly when it comes to property. The rates related small business grant is helpful, but it ignores the vast number of brands – particularly with property in London, who just won’t benefit. The £25k grant for stores with RV of less than £51k needs to be extended to those with RV of less than £150k in my view,” he said.
Pearson also said industry needs “more protection” from landlords who are “seemingly oblivious to the wave of change that is coming.”
“Any landlord that manages to hold on to a hospitality tenant through this period will only do so by being flexible, reasonable and collaborative. If they simply apply the terms of their contracts and issue winding up procedures against businesses unable to pay their rent through this, they will struggle to fill that space in the near future. The government should be mandating a moratorium on action against commercial tenants for the next 6 months to force landlords into a more collaborative approach,” he said.
He also said that the job retention scheme is “not clear enough.”
“If a business is acquired during this period of shutdown, then the new owner must be able to place the staff on furlough and make use of the job retention scheme. At the moment, businesses like mine simply don’t qualify based on the date we acquired the business being after the 28th of February. The spirit of the JRS is to save jobs and livelihoods, so I’m sure this is just an oversight,” he suggested.
However, he stressed that the industry remains “resilient” amidst closures.
“Those businesses that adapt, have real passion for giving their customers a great product and fantastic experience, invest in and look after their teams and that do not overburden themselves with debt, will continue to succeed. That’s certainly the approach we’re taking at Benito’s,” he said.
