Source: Hakkasan Group

Hakkasan Restaurant to Hit U.S. Malls With Michelin-Starred Tea House

Yauatcha outlets in Houston and Honolulu are first step to expanding in malls in other cities

Hakkasan Group, which grew from a basement Chinese restaurant on a side street in London to become a Michelin-starred global hospitality player, will step up its international expansion next year by adding two new establishments in the U.S. as well as entering Indonesia.

The new sites in malls at Houston and Honolulu mark the entry into the U.S. of the Yauatcha chain of dim-sum tea houses, which are more casual and less expensive than Hakkasan restaurants, known for fine dining and high glamour, with prices to match.

Hakkasan Group President Nick McCabe.
Hakkasan Group President Nick McCabe.
Source: Hakkasan Group

"Hakkasan is the kind of operation where you dress up and splurge whereas at Yauatcha you can just pop in for a cup of tea and a pastry or a business meeting," said Nick McCabe, Hakkasan Group president. "There is huge potential because it's more scalable than Hakkasan. It's always been my favorite brand in the portfolio."

The group is expanding aggressively, with revenue increasing almost 600 percent since 2012. It has outlets in Miami, New York, Las Vegas and San Francisco, as well as cities including Mumbai, Abu Dhabi, Dubai, Doha and Shanghai.

In Houston, Yauatcha will open in partnership with Simon Property Group Inc. at the Houston Galleria. In Honolulu, it will open at the International Market Place, which is being developed by Taubman Centers Inc. and CoastWood Capital Group LLC with Queen Emma Land Co.

"It's a great way for us to take the brand into the U.S.," McCabe said. "We have to learn how the U.S. responds to the food offering and the experience. Once we perfect it, we can take it to the U.S. market."

"Yauatcha needs high volume to be profitable, which isn't the case with Hakkasan. So we wanted to maximize the footfall of the kind of customers we want, and we know they will be in those malls."

Yauatcha 's crystal dumpling wrap with pumpkin.
Yauatcha 's crystal dumpling wrap with pumpkin.
Source: Hakkasan Group

The group has had some big successes, including in Las Vegas, but was less successful when it opened a flagship restaurant in New York's Hell's Kitchen in 2012. The negative headlines included, "Broadway Turkey Serves $345 Peking Duck." McCabe said the company had got it wrong.

"It was the wrong piece of real estate and it was tough to turn around," he said. "We had a level of arrogance and it was like we were beating our chests: 'Here we come, New York.'"

Hakkasan fried dim sum platter.
Hakkasan fried dim sum platter.
Source: Hakkasan Group

"The choice of location maybe revealed a lack of understanding of the tribal nature of New York, where you need to get the right neighborhood and even the right street. But we try to learn from our mistakes and it has made us a lot more cautious."

The company even looked at closing Hakkasan and moving, but decided against it because the restaurant's luxurious fit-out cost millions of dollars and also the price of obtaining a new site would have been so high, McCabe said.

Yauatcha's raspberry delice.
Yauatcha's raspberry delice.
Source: Hakkasan Group

"All companies have failures but we always try to improve the odds," he said. "The level of research in new markets and the financial discipline we have now is far more stringent."

McCabe said Hakkasan's expansion always depends on finding the right partners, and that dictated the choice of Jakarta over other cities when opening in Southeast Asia. The development will involve three brands: Hakkasan; Sake No Hana, a Japanese restaurant; and Omnia, a nightclub. They are all planned to open in Alila Hotels and Resorts' newest development, Alila SCBD Hotel, in the second half of 2016. 

Hakkasan in Jakarta.
Hakkasan in Jakarta.
Source: Hakkasan Group

 

 

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