Page 321 - James Caan - The Real Deal

31 · You Win Some, You Lose Some

some sort of synergy between the product and the team at the top.
This guy didn’t understand his brand and didn’t know his
customers: he had the wrong approach. I imagined that the family
which had set up the company in the first place must have had a
passion for no-nonsense, sensibly priced lunchtime food, but this
guy didn’t have a passion for what he had been asked to do, and
it showed. In successful businesses there is usually a correlation
between the company’s brand and the personal image of the
person in charge, but with him there was an obvious disconnect.
Spotting the problem made me confident that the solutions
couldn’t be too far away, and that made it a decent investment
opportunity. On the Tuesday I went into a branch of Benjy’s –
there was one on Oxford Street just a couple of minutes from my
office in Hanover Square – and had a look round. Again, I thought
I had spotted problems that could easily be solved. For starters,
they had too many types of sandwich. I spent hours in there – God
knows what the staff thought I was doing, and it was telling that
no one offered me assistance – and it was clear that they were
making most of their money from just a handful of lines. It was
the classic 80:20 ratio where 80 per cent of their profit came from
20 per cent of their products. I thought we could change the range
and make savings on ingredients and production. Benjy’s had also
moved into the healthy-eating market with salads and reduced-salt
options and in doing so they’d moved away from their core
market. We could change that, too. As long as I knew what was
wrong, I was confident we’d be able to put it right.
Potentially, it was a very lucrative market to be in: McDonald’s
had bought a 33 per cent stake in Pret for £50 million back in
2001, Eat was valued at around £100 million, Café Rouge had
sold for a lot in the past, so I knew if I could get the formula right
there was a very big prize to be had.
On the Wednesday we met with the financial team to try to
understand their balance sheet – this was a business with 600

311