No express of growth for sandwich shop firm

Published on Thursday 21 May 2009 21:29

SANDWICH shop franchise Baguette Express yesterday said it has scaled back its expansion plans due to delays in store openings and the banks' imposition of tighter loan criteria.

But the chain, which was launched ten years ago by brothers Robin and Billy Stenhouse, has promised it will open around 15 new branches this year, creating 200 new full and part-time jobs.

It has maintained that it has hit revenue targets of 15 million in the year to the end of March 2009.

In a statement which sought to highlight the group's continuing expansion plans, Robin Stenhouse yesterday said the firm was on track to grow the total number of outlets to 70 by the end of 2009. It also expects to make its first move into the London market in July.

But the target is significantly less than the 90-strong chain the Stenhouses had in their sights when interviewed by The Scotsman in December.

At the time, Billy Stenhouse said: "By the end of next year, we are confident that we will reach 90 outlets – which is so many more than we ever expected."

Robin yesterday said the plan had hit obstacles in the form of legal and planning wrangles over outlets – and banks taking longer to provide funding to would-be franchisees.

He commented: "We have some shops which are being held up with legal problems to do with the sites and we are no longer able to expand to 90 outlets by the end of this year."

He added: "We are lucky because we have a good relationship with Royal Bank of Scotland and the franchise development guys there know our structure.

"That's not to say that every franchisee automatically gets funding, but we show them what they need to do to apply and that helps. There is no doubt about it though, that it is taking longer to get the loans through and confirmed."

The new openings include branches in Manchester and Newcastle, as well as Aberdeen, Kilmarnock and Dundee and Stockbridge in Edinburgh.

Stenhouse said the firm, which targets a core market of young professionals, students and office workers, had enjoyed its strongest month of sales ever in March, adding that the company's cheap sandwiches and special offer deals were attracting cash-strapped consumers.

Billy Stenhouse continued: "It is particularly satisfying that Baguette Express can continue to provide excellent quality business ownership and employment opportunities especially in such difficult economic times when many other companies are shedding jobs.

"Our success in this field is a clear recognition that the brand is becoming a popular element of the UK's high streets and we are very pleased with our increasing presence in major shopping centres, where there is an excellent and consistent footfall."

Last year, Baguette Express, which employs 540 staff, expanded its head office in Haddington, East Lothian, adding around 500sq ft.

It moved to a franchise model once it reached half a dozen outlets and is looking to target the likes of bakery chain Greggs and market leader Subway.

Robin Stenhouse is one of three finalists for the young achievement award category of the Scottish Business Achievement Awards Trust, the winner of which is due to be announced next Friday.