Carluccio’s finance director, Frank Bandura, sits across the table – a Napoli
salami on ciabatta alongside him on a plate. First impressions: fiery,
intimidating and unapologetic – fortunately this only relates to the hefty
Carluccio’s sandwich that dominates the space on the table.
It symbolises what the AIM-listed company represents – high-end,
authentically Italian products. Bandura has been an integral part of the
business, helping it evolve from a single shop into a regional network of 27
stores, with another due to open this month.
He qualified as a chartered accountant with KPMG in London before joining
PepsiCo International in 1992, where he held a number of roles including that of
finance manager in Warsaw for Pizza Hut – part of the PepsiCo empire.
Unique branded concept
Bandura joined in 1999, at a key juncture in Carluccio’s development – when a
major portion of capital had been secured, but needed to be applied with
‘It was very simple really,’ Bandura says. ‘Antonio, who was Italian born and
bred, but living in the UK, became very frustrated that he couldn’t get the
products he was used to getting in Italy very easily over here.’
To make the transition from concept to reality took a while, but by 1999
Carluccio’s – with managing director Simon Kossov and chairman Peter Webber on
board – had raised £2m worth of funding to build the first three stores.
‘The funding was arranged and the money was in the bank in July 1999 and I
came on board in September,’ Bandura says.
It started slowly. The first Carluccio’s café shop opened that year in
London’s West End, but it wasn’t until 2000 that the next one opened in
department store Fenwicks’ Bond Street branch. The third one was in St
Christopher’s Place, also in central London. ‘Then things started to take off,’
‘It was unique then and it still is now. No-one else is doing this the way
that we are. There are some ‘mom-and-pop’ stores, but nobody is offering the
branded concept that we are and nobody else is offering, in a branded context,
the combination of a food shop and café,’ he says.
Carluccio’s is, in part, a case of right place, right time. The business
tapped into a social shift that allowed Carluccio’s to position itself perfectly
to serve a rapidly expanding dining market.
‘Eating out is no longer a specialist occasion, it’s something that people do
very regularly. Society has become much more discerning.
As international travel has become a lot more accessible, people’s tastes
have broadened and, consequently, that’s been crucial to the success of the
business,’ he says.
Alongside the growth in restaurant dining, the British palate has become more
sophisticated, Bandura believes.
‘People are no longer happy to accept any old food on their plate – we’re
serving very high-quality authentic food.
The company, audited by BDO Stoy Hayward, steadily built up its network over
the next five years before managing the step-up to an AIM listing.
Floating on AIM was no walk in the park, however, but instead a painstaking,
‘I wouldn’t be telling the truth if I said there weren’t periods of stress,’
Bandura admits. ‘The process of getting the company ready and marketing it to
people that may have never been in a Carluccio’s is an enormous challenge, but
it’s an enormously rewarding one.’
When Carluccio’s floated, Bandura didn’t want the City to be under the
impression that the business wanted mass expansion, although he adds: ‘not
because we didn’t think the business model was going to be unsuccessful.
‘It was much more about having a measured plan so we could control food and
site quality, both key to having a long-term business in this industry.’
In the end, the float was very successful. The business wanted to raise
£26.5m for existing shareholders who wanted to sell-out, but in the end the
float was massively oversubscribed and raised £94m.
Thanks to rigid planning, the business is now on track to open five new
restaurants a year – not a programme to be taken lightly in the restaurant
business where companies fail daily.
‘You only have to look back four or five years to see plenty of restaurant
concepts that have opened one or two restaurants, done really well, but have
then gone absolutely mad, expanded everywhere and then, guess what? – customers
have got a bit fed-up, or they haven’t got the quality or the people right and
they’ve had to close down.’
To avoid any restaurant fatalities, a portion of the budget is set aside for
staff instruction – all Carluccio’s restaurant managers undergo an eight to
12-week training programme. And food quality is closely monitored.
If everything goes to plan, the rest of the UK can look forward to partaking
in the Carluccio’s experience. A market study commissioned by the company
estimates that there is ‘potential for at least 100 Carluccio’s in the short to
With costs of £700,000 to open a new café from scratch it is a challenge the
FD is entering with his eyes wide open. But with an estimated cash return of
more than 60%, he has a strong investment potential on his side.
‘In terms of where the marketplace is, that’s at least double what investors
are able to achieve.’
As well as watching the business grow, Bandura has been on a professional and
personal trajectory. He has been with the business since it was reporting
turnover of £1m and has led projects to implement the appropriate systems and
recruited the finance team to enable a £36.8m turnover last year, a rise of
32.5%. A recent trading statement reported turnover for 2006 of £45.63m, up 24%.
Another great selling point for Carluccio’s is its opening hours – it’s open
from 8am until 11pm most days – another offering that suits the changing social
habits of British restaurant goers.
The FD role of a publicly-listed company hasn’t put Bandura off either. Ti
ghter AIM regulation held no fear for him, nor does the onset of IFRS compliance
due in 2007.
‘It’s part of the deal. When we floated we knew there would be much more
focus on us and many more rules, but I don’t see it as a big burden. We have
advisers and we rely on them to tell us what we need to look out for.’
In terms of keeping Carluccio’s ambitious plans for the future on track
Bandura favours an unashamedly hands-on approach as far as IT is concerned.
‘I started doing a lot of the work in IT at a very early stage, so by the
time we really needed it, it was already in place. When I arrived, we had a very
basic, single-user, off-the-shelf accounting package, so one of the first things
I did was to invest in a sensible accounting system that would see us through
many years of growth. We believe that our IT, if certainly not the best for a
company this size, is at least as good as anything else out there, and that’s
unusual for a restaurant company.’
Bandura doesn’t believe Carluccio’s has anything to fear from competitors.
‘Don’t get me wrong, we have plenty of competition. In the mornings, we’re
vying with the likes of Café Nero’s and Starbuck’s and during lunchtimes you
could go to Strada or Wagamama, for example, but there’s no one that we
specifically identify ourselves with and say: “When we grow up in five years, we
want to be like that.”
Still, there’s plenty of room for more operators in the market, which is
growing at around 4-5% a year. Whether Carluccio’s can maintain its momentum
remains to be seen but for now its track record speaks volumes.
THE CARLUCCIO’S APPROACH TO TEAMWORK
Bandura oversees a team of eight people.
With daily deliveries of fresh food a lot of paper is generated.
‘Last time I counted, my guys were processing between 4,000 and 5,000 bits of
paper a week, which is enormously labour intensive from an accounting point of
Bandura has embraced the significant shift in the role of the finance
‘I do the IT myself and also manage the logistics requirements. There’s a need
for this role because of our importing activities from Italy.
‘The traditional stereotype of somebody sitting in a corner adding up figures
is obsolete. FDs can no longer hide behind a set of excellent numbers, the
expectation is much greater.
‘The FD role is one that is much more of a general business adviser, expected
to influence, participate and bring their perspective to bear on where the
business is going.
‘Another team member deals with the management accounts and another manages
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