June 07, 2017
13:41
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Having arrived there three years ago, Exki wanted to make New York one of the key markets for its growth. The mayonnaise did not set. Here’s why.
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Three years after his arrival, it is the end of the New York adventure of Exki. The Belgian chain of quality fast food closed its two restaurants there while a third was in the pipeline. In their wildest dreams, its managers were counting on around fifty establishments, a bit like another Belgian-Belgian success story, Le Pain Quotidien, which opened 44 tables d’hôtes in Manhattan.
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Frédéric Rurez, co-CEO and creator with Nicolas Steisel, does not hide it. It’s a disappointment. This market seemed very attractive: a city teeming with activity, millions of people, in a hurry but anxious to eat healthier … “This is the official speech, he notes; in reality, people are still addicted to fast food. As for the local suppliers, they did not meet the specifications: there were sweeteners in their products and when we told them of our astonishment they replied: ‘This is how we do it here’. “
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Frédéric Rurez lucidly analyzes this failure. “There are several explanations, he begins. First of all in terms of human resources, in a city bordering on full employment, it is very difficult to retain staff, people can leave you overnight, which complicates management. These people can also triple their salary with tips, the famous tips, very important there: however, as we do not serve at the table, there is none, so they will look elsewhere. “
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The co-CEO also explains that the US consumer is willing to pay for quality as long as it’s served at the table, but isn’t willing to put more than $ 10 for a take-out. “However, the latter constitute 80% of our figure. To get by, we should have either cut back on the quality, which we did not want, or on the margin. But to afford it, we should have had to have a turnover twice as high, that is to say a lot more restaurants. ” But in a town where the rents are overpriced, good pitches are expensivet. “A banker explained to me that despite 30 well-located restaurants, Prêt-à-Manger (a competitor of Exki, NDLR) was still not profitable “, adds Frédéric Rurez. “Maybe we made the mistake of doing everything ourselves, and we should have raised ten million dollars from the start with a local partner to open several restaurants at once, he continues; this would undoubtedly have made us credible with the suppliers because with only two points of sale, you are nothing to them and they change their prices as they see fit. “
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Exki therefore stopped the charges last December. And immediately, the sign which had fallen into the red following its New York investments, returned to profits at the end of its staggered 2016-2017 financial year ended at the end of January. From a net loss of 330,000 euros, Exki went to a profit of 285,000 euros. EBITDA climbed from 6.1 to nearly 7 million and turnover was 128 million against 121 a year earlier, driven by the expansion of the network. Because if Exki has closed two restaurants in New York and one in Paris, it has also opened nine. “The return to profits is not really due to the shutdown of activities in the United States, it is too early, nuance Frédéric Rurez, the positive impact of this decision will be more visible at the end of the current financial year. “
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Now free of his American ball, Exki wants set out to conquer new markets by refocusing on Europe. This year, twelve openings are planned, including two in new countries. A restaurant will open at the end of the year at Cologne and, this fall, the chain will know if it has been selected as part of a call for tenders to open at Barcelona airport. Exki is also preparing to double in size at Netherlands by opening two new points of sale. It will strengthen its presence by France, opening in Lyon in September. Three new Exki are also planned in Belgium, including one in the new NATO headquarters. These developments should make it possible to reach the bar of 140 million euros in turnover and the cap of 8 million ebitda.
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Trial: a $ 60,000 postilion
When you want to do business in the United States, you have to take into account local procedural particularities. The founders of Exki had this bitter experience. One of their employees, engaged for barely ten days, sued them on the grounds thata cook had posted to his face.
Willingly or not, history does not say so. Still, we do not joke with this kind of attitude in Uncle Sam’s country. Result Exki had to pay him … $ 60,000 in damages! “Of which 40,000 went into the pocket of his lawyer, says Frédéric Rurez. Delusional? “Apparently not, he replies; we were even told that we were doing pretty well because initially this person was asking us for $ 250,000! “
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