Lucien Law, founder of Savor Group. Photo / Supplied
Savor managing director Lucien Law says the Auckland hospitality group has plans to grow its business beyond its current 17 venues despite the challenges posed by Covid-19.
When Savor was acquired by then NZX-listed Moa Group in 2018, which at the time was three times smaller than the hospitality business, Law says he had no idea just a few years later Moa would be sold on and the once-listed brewing entity would divest and become hospitality-focused only.
He says the acquisition and then divestment of Moa Brewing — sold in February to Mallbeca for $1.9m — was no grand plan.
"It's interesting how things work out. The divestment of Moa was a pretty tough decision for the board to make and [Savor chairman Geoff Ross] put a lot of blood, sweat and tears into it, but I think we made the right decision; we couldn't get it profitable, it was the right way to pivot 100 per cent into more profitable hospitality-only business. It hasn't been an overnight thing, but it is exciting."
When Law spoke to the Herald shortly after the takeover in 2019, he said merging with much smaller Moa was a risk he was willing to take.
And now Law, who was appointed managing director of Savor after the listed entity changed its name following the Moa divestment, has also just taken on one of the most popular restaurants in downtown Auckland.
Yesterday Savor - one of New Zealand's largest bar and restaurant businesses - announced to the stock exchange that it had acquired Hipgroup, the owner of Amano, Ortolana and The Store, for $11 million, in the form of $7.15m in cash, $1m of ordinary shares and a deferred cash payment of $2.85m to be paid 12 months from completion.
The new venues will inject an additional $3m to group operating earnings.
Alma, Hipgroup's newly opened venue is not part of the acquisition.
Savor venues include popular Britomart restaurant Ostro, Seafarers, Non Solo Pizza, Ebisu, Azabu, Fukuko and Las Vegas.
"It's a pretty exciting thing to bring Savor and Amano together," Law told the Herald, adding that nothing would be changed from a customer or operational point of view.
The deal comes after eight months of negotiations and the transaction is expected to be complete in April. It will bring the Savor staff headcount to 360, acquiring an additional 100-odd staff.
Law said Savor would look to grow its portfolio of bars and restaurants, through both acquiring existing venues and starting up new ones.
"I can see us potentially doing a bit of both. Post-transaction we're in a pretty strong position, and we will look for opportunities both to put our brands into and acquire if it fits into the group," said Law.
"We have ambitions to grow, but not at the risk of not executing on what we've got."
There were currently no other takeover deals in the works, he said.
"We've had a busy year or so with Non Solo Pizza coming on and doing renovations, opening Azabu in Mission Bay, and this [acquisition] cements that. Through this year our main focus is executing what we've just done, and we have got some ideas of where we might put our brands but its early stages for that."
Covid-19 had been a challenging time for Savor and the wider hospitality industry, with some of its venues' earnings still down on pre-pandemic levels, but Law said Amano like Savor had proven resilient through 2020.
Law said he did not believe it was a risky move to take on Amano and Hipgroup venues despite uncertainty still in the market with Covid-19, he said the move was strategic and thinking long-term.
"Like for like, the [Hipgroup venues] have been very resilient to Covid; that's a statement to Britomart even though we've got a lot of corporates around us. Britomart is still a destinational place for dining in Auckland.
"Our venues in the city are still down on revenue, not significantly, but ESP in Parnell, Azabu in Mission Bay and Ponsonby continue to trade really well."