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21 August 2014

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Ivy League - A Profile of Richard Caring

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He made his fortune in the clothing business, and now Richard Caring is investing it in some of the capital’s top restaurants and clubs. Sarah Butler finds out why he’s swapped fashion for food


Richard Caring2 - RC2.jpgIt’s not unusual for those close to retirement to take up collecting as a hobby, but not many go about it quite like Richard Caring. In just four years, the 59-year-old rag-trade entrepreneur has collected a magpie’s nest full of London’s most glittering restaurants and clubs.

The suave, permatanned Caring, easily identifiable by his silvery sweep of hair and sleek Armani suits, has been a habitué of Annabel’s, Le Caprice and The Ivy for some time. Now he owns them all.
In January, he secured a majority stake in the private member’s club Soho House, in a £105m deal that topped off a long list of recent purchases including Scott’s, J Sheekey and George. His property investments, have earned him the tabloid moniker ‘the Lex Luthor of Mayfair’.

STRONG BRANDS

However, Caring’s interests are now as diverse as the US Navy building in Grosvenor Square, Soho House’s US properties, stakes in Camden Stables Market, the Wentworth Club in Surrey, famous for its Championship golf, and listed Italian restaurant chain Carluccio’s. And he’s not planning to stop there. ‘We are still looking for more deals. We have the experience and the management structure, chefs and staff. I don’t think there is anybody in this country who has the depth of people working in food and beverages,’ the normally reticent Caring told Square Meal in a rare interview.He says he will look at hotels, restaurants and clubs: ‘Anything in the same vein as we are doing now.’ But his main interest is in strong brands that have been under-potentialised.

Until recently, the low-profile Caring was best known for his close friendship with colourful retail bigwig Sir Philip Green, owner of Topshop and Bhs. Caring is rumoured to have lent Green some of the cash for his buyout of Bhs and has certainly supplied a good proportion of the clothing for that store and its sister group Arcadia, the owner of Topshop and Dorothy Perkins.
For a year or so Caring virtually ran Bhs alongside Green and he is still a major supplier to the high street, with interests in manufacturing businesses turning over several hundred million pounds a year. But after selling off NV, a major Next supplier, a few years ago, Caring began to explore new avenues of investment.

RAISING STANDARDS

His spending spree in the leisure world kicked off in 2004, when he bought a share in the Camden Market complex for £40m. But he says the real spur for his move into restaurants came later that year, when long-term friend and property magnate Elliott Bernard offered him the chance to buy Wentworth. ‘Elliott phoned one day and said: “It’s for sale”. As a sporting facility in the UK there is nothing similar. Wentworth is to golf what Wimbledon is to tennis.’ As a keen golfing fan Caring says: ‘I couldn’t resist it.’

He teamed up with Surinder Arora, the airport hotel entrepreneur who was already a minority shareholder in the club, and bought Wentworth for £130m. It was seen as a high price to pay for a golf club, and £50m more than the club’s book value at the time. Caring said he realised he needed to raise the standard of food at the club dramatically and brought in the owners of Le Caprice to help out. During discussions over the Wentworth deal Caring joked it was costing him so much he might as well buy the whole Le Caprice group; then it emerged that the management was looking for a buyer.

The Ivy - The_Ivy_exterior.jpg In June 2005, after offloading designer eveningwear label Amanda Wakeley, Caring secured a £31.5m deal to take over Caprice Holdings, owner of The Ivy (pictured left), Le Caprice and J Sheekey, as well as Italian restaurant Daphne’s, Vietnamese restaurant Bam-Bou and the Moroccan Pasha restaurant.
He says: ‘The whole thing happened quickly. It was not a great strategy. I didn’t dream one night that I wanted to own some restaurants. But I always believe in blue chip, in quality, and this was a fantastic brand with an excellent quality.’
He adds: ‘Once we are in something, we like to move ahead and build it into something of a sensible proportion so each of the brands can help each other; but each of the brands has its own strong identity and we haven’t changed any of that.’

BUYING CLUBS

Caring immediately began to reshape the group, snapping up fish restaurant Scott’s, then events catering firm Urban Productions, and selling Pasha to Algerian restaurateur Tony Kitous. The following year the group also bought Rivington, a two-restaurant group independently set up by Caprice Holding’s chef director Mark Hix.
Caring’s next major target was Signature Restaurants, owner of mid-market eateries Strada and Belgo. He bought the group for £57m in 2005 and rapidly expanded Strada before selling the group on last year for an estimated £145m.

The profits from that deal were almost immediately pumped into acquiring Mark Birley’s empire of upmarket private clubs,Mark's Club - Mark's_Club.jpg including Annabel’s, George, Mark’s Club (pictured right), Harry’s Bar and the Bath & Racquets Club.The £95m deal, concluded just a few months before the club-owner’s death, included Birley’s vast art collection, which adorns the walls of the clubs. However, many in the business world felt Caring had overpaid.
Caring has argued that his detractors don’t take into account the true value of the brands he has bought, something that gives a hint as to how he plans to develop his businesses.

With Soho House, the route to expansion is obvious. Caring, who bought out 28 minority investors to take a majority stake in the private club group, will continue the strategy of expansion abroad. Scottish bank HBOS has provided a £130m credit facility to help open sites in Los Angeles, Miami and Chicago this year. A further site in Berlin has also been confirmed, while clubs in Istanbul, Tokyo, Shanghai, Cairo and Sydney are said to be on the cards. Soho House founder Nick Jones will remain as chief executive, retaining a 20 per cent stake.

With the Le Caprice group of restaurants, Caring admits he is looking at the possibility of buying restaurants abroad. However, he says at present the strategy is very much based on making the most of each brand’s London base. ‘There is only one Ivy,’ he says.
The business is being taken forward with a £10m investment to develop the upper three floors of the building into a private club, which is expected to open in June. ‘It will be all about the food, drinking, a great atmosphere, private dining and lounging bars. It will be a place to meet but in the Ivy style with no quirks,’ says Caring. He says he has already been ‘inundated’ with membership applications.
A similar strategy could be on the cards at Annabel’s, which is considering expanding from its cosy basement into the upper floors. Caring wants to create a private ‘day club’ with facilities such as private dining and a library, which would offer something different to the intimate Annabel’s nightclub.

PROFIT OR LOSS?

It all sounds like a sensible strategy, but can Caring make any money out of his move into restaurants? Or is this just a vanity project for retirement? On the surface some of his investments do not look promising. In the year to
31 March 2007, Soho House made a pre-tax profit of just £150,123 and a loss of £205,315 after a tax provision as it prepared to open new sites in east London and Soho. In 2006, it lost £44,805 after tax. Several of the Mark Birley clubs also recorded a loss and Annabel’s made profits of just £15,583 in the year to August 2006. However, that was after its former owners took out a massive £1.5m dividend.

Peter Blackburn, managing director of restaurant sector analysts Horizons, says that all the businesses Caring has bought have strong cash flow, high margins and are largely backed by the value of their property assets as well as their strong brands.
‘What he has done looks like a reasonably good business proposition. However, there is a question over whether these brands are exportable. In practice it is very difficult. A high-end brand has particular associations with a country or place.’

Wentworth2 - WW.jpgHowever, Blackburn suggests Caring’s plan of expanding certain brands within London looks smart. ‘If he can take a long-lasting brand and create additional businesses then he could sell out and make a lot of money out of it,’ he says.
Perhaps our first hints of the Caring touch come from Wentworth, which posted a 65 per cent rise in sales to £19.5m last year after refurbishing its bar and restaurant facilities with the help of Le Caprice. Operating profits for the period grew from £3m to £3.6m.
Sales also rose strongly at Caprice Holdings in the year to July 2007, up 15.6 per cent after Caring bought Scott’s and sales improved at the group’s other restaurants. He paid himself a £1.3m dividend from the group last year on top of a £1.72m dividend the year before.

RICH FRIENDS

Both businesses seem to be moving in the right direction, which is not surprising given that Caring has shown a canny eye for a good investment in the past.
The son of Lou Caringi, an Italian-American GI, and the nurse who cared for him after he was injured during the Second World War, Caring grew up working for the clothing firm his father set up on settling in London. Caringi, who changed his name to suit his new home, founded a successful knitwear manufacturing business, which supplied the likes of Marks & Spencer. Caring junior was one of the first to spot the opportunity in sourcing from the Far East when he went out to Hong Kong in 1972 and set up a buying office there.

During his 20 years in Hong Kong he built strong links with Far East manufacturers, helping develop the business into a major supplier for well-known names such as Mothercare and Next. He made money, not only from his massive sourcing business, but also by selling the Together brand, which he had co-developed, to German catalogue firm Otto Versand and then selling NV, Next’s Near East sourcing operation that he had built up, to the retail chain.
According to the latest figures from Companies House, his main clothing supply company, International Clothing Designs, saw sales drop to £74.2m from £85.5m in the year to July 2005. This was after some operations were sold or closed and the group dropped into a pre-tax loss of £523,644 from a £3.99m profit the year before after an exceptional loss on the sale of designer label Amanda Wakeley. However, ICD is part of a complex web of businesses, many of which lead to offshore holding companies, making it hard to detect Caring’s full earnings from the fashion world.

Friends say he retains strong financial backing from his fashion businesses and with rich friends such as Bernard and Green to hand we can expect to see Caring fulfil his aim of expanding his interests in the restaurant world.
Already there are rumours that he will use his 10.28 per cent stake in Carluccio’s to launch a bid and that he is interested in concierge company Quintessentially.
Caring, however, insists he has no plans to sell out of his current portfolio in the near future. ‘This is a long-term investment, a proper business, not something to play with. These are quality brands that I respect, with great staff and management behind them. London is a supreme city of dining which outshines any other city in the world today and I am proud to be a part of it,’ he says.


RICHARD CARING'S LEISURE PURSUITS

Caprice Holdings, which includes Le Caprice, The Ivy, J Sheekey, Daphne’s, Bam-Bou, Rivington and Scott’s restaurants, and events catering firm Urban Caprice

Birley Group, which includes Annabel’s, Mark’s Club, Harry’s Bar, Bath & Racquets and George

Wentworth Club – majority stake

Camden Stables Market – 25 per cent stake

Carluccio’s – 10.28 per cent stake


A HISTORY OF CARING

Born: 4 June 1948

Married to Jackie, with two grown-up sons

Began business life in father’s clothing supply business, Louis Caring

1970s: Moves to Hong Kong to develop the clothing supply firm into International Clothing Design, a major supplier to the UK high street. Also said to have made money from property deals in Hong Kong

1980s: Launches Together, a clothing brand that was a 50-50 joint venture with the Freemans catalogue; later sold to rival Otto Versand

1990s: Returns to London and moves into £15m Hampstead home. He also owns a country pile converted from a Georgian stables on Exmoor

1998: Makes an investment in fashion chain Whistles, which he later sells to high street chain Karen Millen

2000: Buys the Amanda Wakeley eveningwear label

2002: Sells NV, Next’s Near East sourcing operation, to the retail chain

2004: Buys stakes in Camden Stables Market and Wentworth Club

2005: Sells Amanda Wakeley and buys Caprice Holdings, owner of The Ivy and Le Caprice, and Signature Restaurants, the owner of Strada and Belgo

2006: Emerges as £2m donor to the Labour Party amid the cash-for-peerages inquiry, although no wrongdoing is found

2007: Sells Signature and buys Birley Group, owner of Annabel’s, George and Harry’s Bar

2008: Buys majority stake in Soho House


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