Hold the Mayo! Itsu Healthy Fast-Food Chain Eyes New York CityRichard Vines
Julian Metcalfe can’t stop himself.
The founder of Itsu and Pret a Manger starts checking the boxes of salad and sushi as soon as he enters a branch of Itsu on London’s Finsbury Square to be photographed. At least, that’s after greeting the staff and kissing the manager.
Why is that sign there? What is this box here? He’s a details man. It’s hard to get him to stand still to pose for a picture. And when he finally does, his eyes are darting round the store, taking in every aspect of what’s going on.
The shelves are filled with light Asian meals, from salmon and tuna tartare (160 calories) to coconut chicken wrap (140 calories). Hot options include silken tofu and shaved green leek soup; and Thai duck with rice and vegetables.
“It’s very difficult to find the harmony in my business, in the Itsu style of business,” he says in an interview. “You got to have the menu, the care and pride of the staff and the operations in sync. And when they are, it’s like music.”
Metcalfe, 55, founded Pret a Manger in 1986 with his friend Sinclair Beecham, with whom he was a student at the Polytechnic of Central London. Bridgepoint acquired a majority stake in the sandwich chain in 2008.
Itsu -- which means “when” in Japanese -- started as a restaurant in London’s Chelsea in 1997.
Thirty More Stores
It has grown into a chain of U.K. stores selling healthy Asian food. The 50th has opened and 30 more are on the way. Privately owned Itsu last year posted earnings before interest, taxes and amortization of 6 million pounds ($10 million) on sales of about 60 million pounds.
A separate company, Metcalfe’s Food Co., groups two brands, Itsu Grocery and Metcalfe’s Skinny. Itsu Grocery takes the brand into supermarkets and delicatessens; Metcalfe’s Skinny provides healthier alternatives to snacks such as crisps and cookies.
Itsu plans to enter New York City and California, possibly starting as early as 2016. The company previously opened a store at the World Financial Center in Manhattan in December 2006. That was a joint venture that soured within weeks, according to Metcalfe.
“I chose the wrong partner,” Metcalfe says, rejecting the idea that New York is a tough market. He cites the success of Pret a Manger, which has 60 U.S. stores, in the cities of New York, Boston, Chicago and Washington. (There are 280 in the U.K., 14 in Hong Kong and 10 in France.)
“Itsu is very different (from Pret) because it has more hot food,” he says. “It’s freshly made, which is very important, particularly in New York, where the weather can get chilly. It’s also more expensive. It’s 2 pounds more but for that 2 pounds I’ll give you some really, really yummy stuff. I will also serve you within 60 seconds. That’s the plan.”
Itsu currently draws more than 1 million customers every month. Metcalfe says it costs about 550,000 pounds to open each store and the company’s expansion is financed by HSBC Holdings Plc. He says Itsu has recently secured an additional 9 million pounds financing on top of a 10 million-pound package in 2013.
A successful store is one with more than 1 million pounds a year in sales, with customers spending an average of 6.19 pounds a visit. Like-for-like sales growth is 14 percent. Metcalfe says he is talking to a potential partner in France but he won’t consider turning Itsu into a franchise operation.
“Something as complex and as fragile at Itsu can’t work that well with people who are primarily driven by ensuring a good income stream,” he says. “It’s too fragile. We have to harness the passion and the pride of the management and the employees. Franchising tends to be a bit more about control and money and less about the product and the passion.”
Metcalfe is more interested in talking about the food than the numbers at Itsu.
“It’s got huge potential because the people of this country are desperately trying to find flavorsome, yummy, delicious food. And it’s extremely difficult to do it at 6.19 pounds a head, I tell you, and do it quickly and efficiently.
‘‘Over the past two years, Itsu’s gone from 70 percent, 80 percent sushi right down to -- on a rainy day -- only 30 percent. We’ve created 26 salad dishes, hot brown-rice dishes. The latest dish is a hot vegetable soup with noodles with a poached egg where the yolk is runny. Three chicken-noodle soups…”
I’m urged to dip my finger into a pot of herb dressing, which is delicious. When I try to throw it away, Metcalfe says he’s taking it home. He’s tweaked the recipe and he wants to try it. As I leave, he resumes studying the cooler cabinets.
“We’ve got 50 stores now,” he says. “We could have 500.”
(Richard Vines is the chief food critic for Bloomberg. Opinions expressed are his own. Follow him on Twitter @richardvines)