Acquiring The Fulham Shore: a European restaurant business (2023)

Acquiring a new region rather than entering it

To describe this acquisition only as a foothold in Europe is to lose its centre. What Toridoll obtained was two formats already trading across the country — Franco Manca and The Real Greek — and in Capdesia a partner who knew the ground. The heart of the decision lies in compressing the time and risk of building stores from nothing by taking in a going concern whole. The traction Marugame Udon had already found in Britain supported the expectation that the same pattern would work in Europe.

Yet a decision that was reasonable on the evidence available could not price in the British market that followed. Within three years of the acquisition, energy and food inflation and rising minimum wages struck the local restaurant trade; an ¥11.4 billion impairment and insolvency proceedings for the Greek format measured the miscalculation. A strategy of buying and bundling is exposed to the market conditions surrounding what has been bundled — a variable hard to control. Whether the judgment to buy the next pillar was a good one is not settled at the moment of purchase; it is left half in the hands of the market that arrives afterwards.