Des Gunewardena - Chairman and CEO of D&D London

Posted on 30 October 2019

Susan Freeman
Hi, I’m Susan Freeman, welcome back to our Propertyshe Podcast series, brought to you by Mishcon de Reya in association with the London Real Estate Forum, where I get to interview some of the key influencers in the wonderful world of real estate and the built environment.  

Today, I am delighted to welcome Des Gunewardena; chairman and CEO of D&D London, the luxury restaurant group that owns and operates over 40 venues in London, Manchester, Leeds, Paris and New York.  Their restaurants include iconic dining establishments such as Quaglino’s, The Bluebird and Sartoria, but also many new additions to the dining scene.  D&D also own South Place, an 80 bedroom luxury hotel in the City of London.   In 2006 Des led a buy-out of Conran restaurants which then changed its name to D&D London.  This followed 15 years working as business partner and CEO to design entrepreneur, Sir Terence Conran.  During that period Terence and Des built Conran from a small design company into a global restaurant, retail, hotel and design company employing 2,000 staff in the major cities of the world.  In the mid-1980’s Des was responsible for financial planning at property conglomerate Heron International run by Gerald Ronson.  Des is a non-exec director of Fulham Shore Restaurant Group and has previously held non-exec directorships at London First and other publicly listed restaurant and design companies.  For a number of years Des has been listed as one of the Evening Standards Top 1000 Most Influential Londoners and in 2013 was shortlisted as Ernst & Young’s London Entrepreneur of the Year.  So now we are going to hear from Des Gunewardena on how he went from being an accountant to running one of our most successful restaurant and hospitality companies.  Welcome to the studio Des.
  
Des Gunewardena
Thank you, pleased to be here Susan.

Susan Freeman
So Des you went to school in London and studied economics at Bristol but you were born in Sri Lanka.  What brought you to London?

Des Gunewardena
Well I was 7 when I arrived in London. It wasn’t me that brought me to London, it was my parents.  So my father was a civil engineer and in Sir Lanka he was mainly designing, he was involved in irrigation projects and he really wanted to design bridges so he wanted to further his career so that’s why we came to London in the late 60’s.

Susan Freeman
Well you trained as an accountant.

Des Gunewardena
Yes.

Susan Freeman
Though I am not sure you ever intended to work as an accountant because I think did you go straight into Gerald Ronson’s company, Heron International?

Des Gunewardena
Well no I qualified as an accountant with Ernst & Young and did my bit but no you are right, I never had an ambition to be a partner in a firm of accountants so yes fairly, fairly early after qualifying I went and joined Ronson, that was in the buccaneering days of Heron in the late 80’s and that was really my first experience of being in the commercial world proper.

Susan Freeman
The commercial real estate world as well.

Des Gunewardena
Commercial real estate world.
 
Susan Freeman
What was your role there?

Des Gunewardena
My job was I a financial strategist. I was a financial planner so I was very young, I didn’t know anything about anything apart from you know, I’d learnt something about finance at Ernst & Young and my job was to put financial models together, so I would present them to Ronson and his Board which at that time was very small actually, just the three of the main Board and then after that, after I had done that for a while, I was actually finance director of a couple of his car businesses but it was really the you know, my main job was financial planning and strategy.

Susan Freeman
And what was the main learning from that because these things are never quite as you expect them to be?

Des Gunewardena
Well it was quite an amazing time because at that time Heron was doing a lot of expanding into America so I thought ‘wow this is amazing’ this business because he was building skyscrapers in Manhattan, buying film businesses in LA, buying banks in Arizona and everyone thought it was a service station business with some property so – what was my learning?  I think if you, when you work for someone like Ronson and I had quite a lot of personal contact with him, firstly he’s, he’s a very straight talker; no bullshit, cuts straight to the point, no small talk, incredibly thorough, a brilliant deal maker.  You know I think those are the sort of, it was really with Ronson that I learnt how to do business and business deals.  With Terence, and I am sure you will come on to my life working with Terence, it was a slight, Terence Conran was a very different type of individual; he was a creative and a great visionary but Ronson was a great financial and property deal maker.

Susan Freeman
So did you go straight on to the Conran Group after Heron International?


Des Gunewardena
Yeah I had, I was in Heron for about 4 or 5 years.  Then I joined Terence Conran but I actually wasn’t… it was a company in which he was a major shareholder and there were five of us and I became the sixth shareholder.  It was actually quite a small company.  It was called Conran Roach.  It was an architectural practice, an economic planning company and it did some property development.  I joined in just as, not brilliant timing actually because it was just about going into the terrible early 90’s recession, so there were six of us that ran it and Terence was the chairman and the main shareholder and there were five others who were running that business. 

Susan Freeman
I think during your time there it went from being a small company to being a global restaurant, retail, hotel and design company?
 
Des Gunewardena
Well that company didn’t.  What happened, that company became a smaller company because basically the last, you know the downturn we had to survive and we survived and it became a smaller company, the architectural practice, contracted and we sold one of the businesses.  In the end Terence and I were the only remaining directors of that business and then Terence when he came out of Store House said ‘look why don’t you come over and run the business and I can be the creative guy’ and so that was the start of the Conran Holdings, the new Conran business if you like after post-Store House and that business then grew.  So when I joined Terence we ran the business out of an apartment in Butlers Wharf and he had this terribly grand living room with a river view, I had a back bedroom.  We had some designers in another bedroom and we had our finance manager and a couple of PA’s in the other bedroom and it really was a very small business then.  We had one restaurant which was Blue Print Café where we had an American chef, he didn’t like working weekends so it didn’t open on Saturdays.  I don’t think he opened on Saturday night which was a bit strange but it was, when I got involved we sort of started to run it properly as a business.  We had one Conran shop, Terence was involved in the Design Museum and he had an investment in Bibendum, so it was you know, terribly small, about 100, less than 100 staff and we managed, we developed the business.  Everyone talks about the restaurants which was the business that grew fastest but we also expanded the Conran shop from one to having a number of them all over the world.

Susan Freeman
So it must have been a pretty amazing journey to start, you know, for something quite small and then build and build and over what period of time was that?

Des Gunewardena
So this was over a period I guess it was around 12 or 13 years.  So we built the business to I think when we split the company up we had a turnover of about 150 million or something like and we had employed about 2,000 staff.  We had a hotel then as well, a lot of restaurants all over and then we had the retail business.

Susan Freeman
So how many restaurants would it have been?

Des Gunewardena
At the time that we did the buy-out, which was 2006, I think we had about 20 restaurants and we turnover about 50 something million.

Susan Freeman
So you led the buy-out of Conran restaurants in 2006 and changed the name to D&D London?

Des Gunewardena
Well Terence said ‘if I’m not running the company with you I don’t think it should be called Conran’ and I said ‘well that’s fine’ and we sat in the loft and said what shall we call ourselves, we had all sorts of crazy suggestions and in the end we thought we came up with D&D London and we thought it sounded quite nice, you know, D&G - Dolce and Gabbana, D&D - Des and David.  For a while afterwards we had to compete with Dungeons and Dragons on Google because if you keyed in D&D the first thing that came up was Dungeons and Dragons.

Susan Freeman
That actually happened to me this afternoon.

Des Gunewardena
Did it?  Well there you are, we still haven’t got over it.  Some people thought we were a fashion retailer, other people thought we were a bunch of plumbers so, so in the early days I don’t know if it was such a great name but now people have got used to it.

Susan Freeman
And the other D is your partner, David Loewi.

Des Gunewardena
David Loewi.

Susan Freeman
And was David at Conran with you?

Des Gunewardena
Yes David was very much at the heartbeat of the operation.  So he came in, he started off, he had a terribly grand life as a luxury hotelier and then he came and discovered the real world working with us.  He started off as general manager of Metso at the time, now 100 Wardall Street and then he kept being promoted and promoted and promoted and eventually he became managing director of the restaurant company.  I was the CEO of the Group and he was MD so when we… he actually left, he left us to work with Jeremy King and Chris Corbyn to open the Wolsey and then when we, Terence and I decided that I would do the buy-out he came and joined me too as my business partner in doing the buy-out.

Susan Freeman
So some years on there are now over 40 restaurants?

Des Gunewardena
Yeah I think it’s 40, the 44th restaurant we are opening next week. Number 120 for all of your, anyone who is listening to this who wants to come.  Just further along from the Walkie Talkie.

Susan Freeman
It sounds very exciting and it has an interesting, interesting name as all your restaurants do.  So 14 Hill, so it’s fourteen stories but where do the hills come from?

Des Gunewardena
Well we have a restaurant in Manchester called 20 Stories and a lot of people are saying well let’s call it 14 Stories and I thought ‘no, everyone will think we are developing a brand of Stories’ so the compromise was we’ll have the 14 because it is on the 14th floor but we wanted something a bit different to add on to it and I thought at the top of the 14th you can actually see, it’s an incredible view from the 14th floor of this building which is actually at 120 Fenchurch Street and you can see beyond all the beautiful landmark buildings, you know like The Shard and you can see Tower Bridge and so on but beyond them you can see the hills beyond London.  Somebody said to me ‘are there actually 14?’.

Susan Freeman
That’s a bit too literal.

Des Gunewardena
I think we could probably count up to 14 and then not count anymore so that’s how the name came.

Susan Freeman
Well I am sure it must have amazing views and I am particularly excited about this one because Mishcon’s acted on this.

Des Gunewardena
Yes Mishcon’s acted for us and very good you were too so yeah we are looking forward to that. No actually I think first on another venture which I think we will sign on the dotted line at the end of this week in another part of London which will be a new part of London for us, somewhere in East, somewhere East.

Susan Freeman
Okay.  So we will keep that one under wraps for the moment?

Des Gunewardena
Keep it under wraps, you could make an inspired guess as to where it’s going to be, I am not going to tell you but…

Susan Freeman
Yes I could probably make an inspired guess but I am not sure our listeners could.

Des Gunewardena
You could probably, you just need to speak to your partners.

Susan Freeman
Yes.  Well that’s great.  And you have one hotel in the City.  Do you have, I mean it is an 80 bedroom luxury hotel isn’t it?  I mean do you have plans for other hotels or is it just the one for the moment?

Des Gunewardena
We have one at the moment.  We do have plans to open other hotels.  The problem with opening hotels is that to build one, to build South Place today including buying the property is going to be 70/80 million pounds so they are not like restaurants where you go and look at a site and you think wonderful site, it’s going to cost you anything from 2 or 3 million up to 5 or 6 million generally to build and you can finance out of your cash flow. With hotels it is a bit different so it’s a bit more opportunity led.  We are looking, we are always looking at hotels, in fact we are looking at one at the moment in New York but I think the chances of securing that are dependent on so many factors and in London where we’ve made bids for other sites, the market is really hot so a lot of people want to have hotels in London so, so the answer to your question is yes we do have an ambition for opening more hotels but we need to really find the one where not only the property but also the numbers work for us.

Susan Freeman
You mentioned New York and after mainly UK focussed you have now opened some restaurants in New York so can you tell us about them and how the restaurant scene in New York differs from what we are used to over here?

Des Gunewardena
Well firstly why we are in New York was three years ago when everyone started talking about, well we had the EU Referendum and we were about 85 to 90% of our business was in London and we thought at that time, not that we were negative on the UK but we really needed to broaden our geographical spread so we made a conscious decision to firstly to go outside London, we opened as we said earlier, 20 Stories in Manchester and we opened more restaurants in Leeds and secondly we opened two quite large restaurants in New York.  So there was a, it was a conscious implementation of a corporate strategy if you like and what’s it been like?  Well New York and Paris are quite, quite interesting because we have a restaurant in Paris which we’ve owned for just over 20 years, and they are really very, very different.  If you, when you open in Paris and I am making a big generalisation based on one experience but other people have said this to me also, when you open a restaurant in Paris, particularly being Brits, they think ‘what are these Brits doing coming to Paris, coming to France, we know all about food and wine, what are they doing opening restaurants in France’.  So you find it very, very tough to become busy.  Then after about 2 or 3 years when you are still there they forget your British, they think you must be Parisian to still be surviving in Paris and then in the long-term your business becomes very successful and we’ve traded pretty well over the last 20 years.  New York is completely different.  New York is the opposite.  You arrive there, everyone thinks ‘oh wow, new restaurant concept from outside America’ and they all pile in and you are packed and then what happens is then the New York restaurant scene is even more competitive I think than the London restaurant scene.  There is always new restaurants opening up and New Yorkers love going to the new hot restaurant.  Then after about 6 to 9 months you then have to make sure that you have built a long-term business that you’ve got your regulars and so on so you tend to have, and we’ve experienced it with Blue Bird and with Queens Yard which was the second restaurant we’ve opened.  It starts off massively busy and then it becomes steadier and then you, and then you start to build your business but they are both busy, they both of them, particularly Queens Yard which we opened in Hudson Yard which is a big property development on the West side of Manhattan, are amongst the busiest restaurants in the group so we are very happy with, overall with our debut in America.

Susan Freeman
So in New York, your restaurants are associated with sort of brand UK, British?

Des Gunewardena
Well firstly we took Blue Bird which is an established, quite a you know, well-known London restaurant in Chelsea and we literally took that concept, tweaked it a little bit, the space is a bit different and we put it into New York.  In to the Time Warner Building in Columbus Circle and we actually had to make quite a few changes because the way New Yorkers all speak English, they are all very positive but they do, it’s not the same as London, it’s not, people don’t eat the same thing, people don’t drink the same thing, they don’t go to the restaurants the same hours so we’ve had to tweak that concept and now it is working, I think it working better than when we first opened.  With Queens Yard it has been different because Queens Yard was a new concept, and really what we mainly do is take spaces and open new concepts.  It is rare for us to take an existing concept and replicate it.  So with Queens Yard we learned if you like from what we did wrong at Blue Bird and we developed a concept which would work for New Yorkers but it is a British restaurant.  We have food which is very New Yorker but at its core it is a British restaurant and why would we not do that.  When I was doing something like this, David and I were interviewed on the radio station there and they said ‘why are you opening a British restaurant? British food?  What is British food?’.

Susan Freeman
It’s a very good question.

Des Gunewardena
So we said ‘we have beef wellington on the menu and fish and chips’ and actually beef wellington and fish and chips have been, have been amongst the best sellers in our restaurant so New Yorkers have embraced it and if we had just spotted dick and bacon and eggs and that’s all we did then I think, I don’t think we would be successful but we have certainly got a core of British running through.  Not just the you know, not just through the food but also the style and the interior. The interior was actually, the interior designer was a New York interior designer who we used in Central Valley who we used in Manchester also but Nancy Riley spent quite a bit of time getting to know our restaurants and getting to know the quirkiness of what we are about and what the Brits are about and we’ve got a lovely mural of, we’ve got two murals actually  there which was an artist depicting what they thought was British life where there is people going for a picnic and in the… it looks as though it is way out in the country but you can see the London Eye in the background so it’s quite, quite an odd juxtaposition of images but people love it and people love that quirkiness.  We’ve got little dogs as well, little sculptures, dogs because British love dogs.  Have you?  I don’t actually, I don’t have a dog but Nancy thought it would be very nice as the entrance to the bar in the restaurant, I have a couple of beautiful dogs.

Susan Freeman
Well I am in New York soon so I am definitely, definitely visiting.

Des Gunewardena
You should go, go and see the dogs.

Susan Freeman
And I have to ask you, has our brand, brand Britain been tarnished at all by everything that has been going on with Brexit?

Des Gunewardena
Well probably no more than brand USA has been tarnished by Donald Trump.  So we are both, we are both probably a bit, would like our brands not to be spoilt by politics.  But seriously the answer is yes, you know, people don’t understand (a) why we are leaving the EU and (b) if we are leaving the EU why we just don’t get on with it and do it and the lack of certainty has damaged I think the reputation of British politics and maybe British business but I think you know, they are very different things; politics and business and politics and people.  So I think people do realise that when we go out and open a restaurant that we are not Boris Johnson coming over to open a… or Jeremy Corbyn opening a restaurant.  We are just people who live in London and we have…

Susan Freeman
And are good at what you do.

Des Gunewardena
…and hopefully are good at what we do.

Susan Freeman
So after all these years in the restaurant business, is there a formula to what makes a successful restaurant because it seems, obviously the food has to be good but there is more to it than that isn’t there?

Des Gunewardena
I think the, the… and we were, even in the Conran days, we recognised this.  When you go to a restaurant of course the food is the single most important element of what you experience in the restaurant but you actually are going for the complete experience.  So I think it is like if you go to a dinner party, a great dinner party isn’t just one where the food is amazing, you’ve got to be with nice people, the atmosphere has got to be good and you’ve got to enjoy yourself and that’s really how we, how we look at restaurants so you know you spent 3 hours, a good 3 or 4 hours going to Quaglino’s of course the food is there but actually people, its busy, its buzzy, you’ve got lovely people around you and then you’ve had your dinner, you’ve had a bit to drink and you are on the dance floor so yeah I think the, what’s the secret of being successful?  I think whatever it is that you are doing you’ve got to really, really understand and sense that what you are doing is going to work for your customers and the other thing about, it is one thing opening a restaurant and being successful and people sometimes think what a restaurant is you get a good design you get a good chef, nice concept, you open it and then job done, you wait for the dividends to role in.  It just isn’t like that so the restaurant business is a very, very day-to-day business and it is a business where you know, things evolve.  You have to continue to evolve your restaurant.  So some of the restaurants that we’ve had Coq d’Argent, Coq d’Argent had its best ever year last year but it  has actually been, it opened in 1998 so it has been around for more than 20 years and if you look at the restaurant today there are certain elements of what it is today were there 20 years ago but we’ve evolved that, we’ve evolved a little bit the look, the terrace is slightly different, the menu has changed.  It’s still a French, classic French restaurant but it is very different from… if you look at it now in terms of the detail it is different from how it was 20 years ago.  So you need to continue to innovate.  You don’t want to be, we do revamp restaurants and change concepts and so on but our ideal restaurant is one that you don’t need to do that so it just evolves.  You know it is like your house. I don’t know how long  you’ve lived in your house, I’ve, we’ve lived in our house for over 20 years and we change the, we change the interiors, we change the sofas and we change the food that we eat at home and so I think it is no different.  You have to, you’ve got to treat it like part of a… it’s, a restaurant has got a life and if it doesn’t evolve then to goes out of fashion and then you have to close it and do something else with it or come up with a completely new concept.  We rarely do that and all our restaurants, German Gymnasium we opened more recent.  Now that restaurant I hope we won’t really need to make any changes to it, fundamental for the next 10/15/20 years but some of the detail will change.  The menu will change a bit, we’ll change the look of certain, maybe the bar we’ll dress it in a different upholstery, the chairs may change, the lighting may be tweaked and the wine list will contain more wines from different, more interesting parts of the world and maybe you know, all those things will change but it’s a little bit of evolution and I hope that we don’t ever, like Coq d’Argent, like well most of our restaurants really have to do a major concept change in order to keep it, keep it successful.

Susan Freeman
And German Gymnasium, is an interesting location because it’s King’s Cross, I mean it is effectively, well when you opened it, it was completely, it was a new destination so that must have involved quite a leap of faith in not really knowing how it was, how it was going to go?

Des Gunewardena
There were quite a few leaps of faith with the German Gymnasium.  Actually going to King’s Cross wasn’t a leap of faith, it is an absolutely classic site for us.  So it is a new emerging part of London.  Remember in the Conran days the business started at Butlers Wharf with the redevelopment of the warehouses there, you know, there wasn’t a great deal there when Le Pont de la Tour opened, everyone said there is no way people will cross that bridge to come to a restaurant South of the river but they did and so we quite like being part of these new path of London developing so we are in Battersea, Battersea Power Station is where we unclear 23.51 but going back to German Gym, the site and the building we loved. Now a lot of people would look at that building and say ‘there is no way we are going to open a restaurant there because it is so big it is going to cost a fortune to heat, cost a fortune to cool and how the hell are we going to fill it, it’s so huge’ but actually we like spaces like that and we’ve worked with large restaurants like Quaglino’s, Blue Bird and it is an incredible building, it’s a beautiful building.  The bigger leaps of faith were what to call it and what sort of food to serve. David and I did an interview with The Telegraph and the guy said ‘so this new restaurant you’re building in King’s Cross, what are you going to call it?’.  We said ‘the German Gymnasium is what we are thinking about calling it’ and he said, ‘gymnasium but it’s  restaurant, it’s not a gymnasium, isn’t that going to be a bit confusing and German, well I don’t think it’s popular is it?’.

Susan Freeman
Wasn’t that the name of it?

Des Gunewardena
Well it was the name, it was and we said ‘well actually it’s the name of the building’, ‘oh yes but are people going to come when it’s called the German Gymnasium?’ and then he said ‘what sort of food are you going to serve?’.  We said ‘we’re thinking of serving German food’.  He said ‘German, you’re thinking of serving German food?  But German food isn’t very popular and nobody has really as far as I know made a success out of serving German food in London’ and we said’ well we’re going to go for it, we’ve got a hunch that it will work because we don’t need everybody in London to like German food, we just like a few people to come into our restaurant’.  Well more than a few people, it is quite a large restaurant and thankfully those two, those two decisions have turned out okay.

Susan Freeman
How many seats are there in the German Gymnasium?

Des Gunewardena
In all we have including the outside, we’ve got I think well over 300, 300 covers there.

Susan Freeman
And what do you make of the problems that are hitting the sort of lower end of the dining market because obviously your restaurants seem to be pretty buoyant and you know people want to come and eat there but we keep being told that at the lower end, the sort of chain end of the dining sector, things aren’t going very well, people don’t seem to want to go to the restaurants anymore.  What’s the problem there?

Des Gunewardena
Well firstly it’s not just the lower end which is tough.  I mean it is tough being a restaurateur whether, currently whether you are at the top end or you are in casual dining because your costs are going up and it is a very competitive restaurant scene and you can’t always pass on your costs in terms of prices so you have to grow, you’ve got to get busier in order for your profits to standstill and that’s the case for everybody but why has the casual dining scene suffered more than the top end?  I think some of the casual dining businesses fuelled by private equity investors have just become too big too quickly.  There is just a supply and demand issue and for a while it was fine but when demand was growing people were eating out but then what happened was people started eating out a little bit less because you know, because of affordability and then delivery arrived and delivery hasn’t really affected our business the top end at all but delivery is now quite a big part of the eating in eating scene and so I think the combination of those two things put pressure on profitability and that’s why you’ve had a number of casualties.  I do think some of the casual dining chains also are just simply not as good as they were when they first started.  I mean that’s natural, that’s natural if you, you know you start off and you own 5 or 6 restaurants and the quality is great but then you are suddenly you know, in 4 or 5 years’ time you’ve got 100 restaurants, it is difficult to maintain that quality and I think that has, that has suffered a bit because not all casual dining businesses are doing badly.  There are some, you know there are some exceptions, Wagamama has been very, very successful.  There are smaller restaurant businesses like Honest Burger, Byrons, been successful, Honest Burger continues to be as I understand, very successful so, so it is not across the board that the people are suffering.  It is not impossible to be successful and I am actually involved in a very successful casual dining business as a non-exec director and a small investor and that’s Franco Manca and Franco Manca is, I am sometimes amazed at how, how we run that business and make a profit because you go into Franco Manca and you can go out and have a lovely pizza and a drink for a tenner a head but they are very, very busy, very successful.  So in the main I think there have been too many restaurants casual dining and I think the expansion has not only just created too many restaurants but also the quality has suffered with some of them, some of the bigger chains and that is why there is a bit of a turmoil in that market.

Susan Freeman
We know that shopping centres and retail are having a bit of a reset at the moment and some shopping centre owners seem to think that casual dining is going to be the answer to their problems but I suppose there is only so much casual dining you can have.  I mean do you see that as something that can help regenerate some of the shopping centres?

Des Gunewardena
Well we are in, you know, we’re not casual dining but we are in, in New York we are in a shopping centre in Time Warner.  It is a very upscale shopping centre with Neiman Marcus and Louis Vitar and lots of very high end brands but we are in a shopping centre and you could say there is a casual element, you can come in to Queens Yard and you can have a burger and a glass of wine for you know, 20 dollars or you can, you can spend 100 dollars a head in  a more formal experience so the, I think shopping centres and we’ve talked to so many owners, both our restaurants in New York are in properties owned by related and which is a major property owner and we are talking to a number of other property owners in the States.  We’ve work with Lansing and Hanison and so on here, they all say the same thing, we’ve even talked to some people in China, in Shanghai who are developing shopping centres.  There is less need for physical retail so what do you put in its place and there is a demand for restaurants but there isn’t at the moment I don’t think enough supply of good quality restaurants that customers really want to go to and I don’t think it’s a case of ‘oh let’s see who the, let’s put a couple of hundred square feet of F&B and let’s just go and find who the, who can pay the rent’ and I think people have got to differentiate now.  The customers do not just simply want to go, they are not going to go to a shopping centre just to go to a restaurant when they’ve got in event high street in Britain so I think the property owners are starting to think that they’ve got to develop concepts which are a bit differentiated.  You don’t have to you know, we have quite a big business, 150, 160 million.  We’re not a small business but all our restaurants are different concepts and they are not all high end, they’re not all restaurants which are £100 a head, I mean some of our restaurants you can literally go in to and spend quite, you know £20 a head and have a nice time so I think they are talking to people like us.  All the major property owners whether it’s office developers, because they’ve got a beautiful office and they think they’d love to have a rooftop restaurant like 20 Stories in Manchester or they are a big retail developer like Hanison.  So we went into Victoria Gate, not in the heart of the shopping centre but, but you know slightly adjacent because we are very keen on having our own independent entrances and so on.  Land Securities was… so we are talking to all these guys about developing concepts and each, in the case of Hanison and Land Securities, we developed restaurant concepts which are single brand, bespoke, concepts for their developments.

Susan Freeman
It is interesting because I hadn’t really thought about it like that but if you go to Hong Kong or you go to New York, it is quite usual to have fine dining within a shopping centre so I suppose it is a question of matching the right brand to the right environment?

Des Gunewardena
Well if you think Time Warner, Time Warner in New York really pioneered luxury restaurants.  Thomas Keller in a shopping centre.  If you then went to Japan in Roppongi Hill they had a, they did a mini version of Time Warner so I think that’s, that’s not a completely  new concept, they’ve been doing it in New York and in Asia for…

Susan Freeman
But maybe it is new to, it’s new to the Brits?

Des Gunewardena
Maybe it’s new to us Brits.  But it works, it does, it works.

Susan Freeman
No it’s interesting.  And you are always looking at sort of new ideas and concepts which is, which is great and I was looking at your Work Room app which I hope you can tell us about which seems to involve allowing people to come and use some of your restaurants in off peak time and work from there.  How is that going?

Des Gunewardena
It’s, well firstly when we launched it, I mean I was asked to go on Sky News to talk about ‘oh this new alternative to We Work’.  It’s a very modest little venture and it is going perfectly nicely but we are not competing with We Work okay so I’ve actually asked Dominica who is the entrepreneur who we joined venture with it to tone down the PR on it because it is a very simple idea and if it works then we will do it on a bigger scale.  If you think about a restaurant, and most restaurants are open for lunch and dinner so lunch time is from 12.30 to about 2.30 – that’s two hours.  Most restaurants don’t open for breakfast and then they open again in the evening which is you know, 7.30 to midnight.  So during a normal office day, we have these spaces and we are only really using them for two or three hours so we thought well why don’t we just open up.  Then it has to be some interiors in restaurants it doesn’t work so you can’t suddenly turn the dining room in Le Pont de la Tour into a space where you hang out with a laptops, you can’t do that but we have a number of restaurants with bars, so Blue Bird, 100 Wardall Street where why not?  We have this real estate, why don’t we use it and in our hotel, South Place, it is busy all the time.  I mean I, for me as an individual I used to have an office, then I had a desk.  Now I have nothing at all and I am actually literally sitting there with my, with my iPad and my iPhone and I am just going, I am just parking myself in our restaurants and the way I am working is also the way a lot of other people are working so, so it’s a case of us just using our real estate a bit more sensibly than.

Susan Freeman
So you’ve chosen not to have an office?

Des Gunewardena
Yeah, I stopped having an office quite a while ago actually because I think now, provided I have got my mobile phone and an expresso, I am happy.  I don’t carry loads of papers around, I’ve got my iPad.  We don’t need, I don’t need a conventional office because I am actually much more effective as a CEO as our company now because I am actually in the restaurants talking to the managers and staff all the time and all our meetings, we do have some meetings in our office.  I like to go back to make sure they are still there, that people haven’t just gone off on holiday and pretending they are working because some people do have to work in an office, our finance guys have got, you know there is a lot of interaction, they need to be with each other and… but I am literally in my office, we have you know, some meetings there.  I never have a meeting with an outside party in an office.  We never bring them to our office in Kirby Street, it is perfectly nice, we have nice rooms and so on, nice meeting rooms but I think you know, if you want to see what we are about, come and have a, we have private dining rooms, so why not have a meeting there.

Susan Freeman
It makes sense doesn’t it?

Des Gunewardena
Yeah it makes complete sense.

Susan Freeman
That you know, you show people what, what the business is about.  What advice would you give to sort of a young person coming in to the restaurant hospitality industry now, you know, how, where should they…?

Des Gunewardena
I actually had a coffee this morning with a young, I won’t tell you who he is because he probably won’t appreciate whoever is listening to this hearing about his story, but he was a young, he is in his late 20’s and he set up a little restaurant business and the first restaurant was super successful, casual dining you know and then he opened 2 or 3 more and they weren’t successful and he has ended up closing his business and he said ‘what shall I do, what’s my advice to somebody like him’.  I think firstly now is not a great time to open a restaurant because clearly there is economic uncertainty, there is a lot of restaurants still compared to, and a lot of good restaurants competing so not a brilliant time, difficult to get funding now.  There have been too many restaurant casualties so you go to your bank manager, ‘I’ve got a great idea I want to open a casual dining Italian restaurant’ and they say ‘well what about I’ve seen Jamie Oliver’s, Carluccio’s and so on, why would I lend you the money, who are you?’.  So I think it is a bit tougher so I said to him ‘I would bide my time, wait to see how the economy, go and get yourself a you know, work for somebody, a fund’- he’s quite a bright young guy – ‘bide your time, keep involved with all the people you know in restaurants and then learn from the mistakes that you made and be honest with yourself, what was the mistake that you made?’.  The mistake he made was I think he became over confident with his success and probably didn’t spend enough time in terms of the detail, attention to detail of his numbers and how his customers were and so on, probably just was on the rode the wave of what he thought was a concept that was going to be extremely successful, he was going to be the next, in Asian food, the next equivalent to Carluccio’s.  So I always say it is all about the detail, keep grounded, don’t ever get caught up in your own, believe that you are going to be successful tomorrow because you will be successful yesterday.  Just work hard, stay close to your customers and always be self-critical and I think it’s, well it’s worked for me anyway so far.

Susan Freeman
Well it sounds like great advice.  I think whether you are a young person coming into the sector or whether you are you know, somebody who is in the sector so thank you.  So I think that’s probably a good point to end on.  Thank you very much for your time.

Des Gunewardena
Yep thank you.

Susan Freeman
Well that was really fascinating hearing from Des on what makes the restaurant and hospitality sector tick both here and in New York and Paris and what great advice for anyone wanting to open a restaurant.  So that’s it for now, I really hope you enjoyed today’s conversation.  Please join us for the next Propertyshe podcast interview coming your way very shortly.  

The Propertyshe podcast is brought to you by Mishcon de Reya in association with the London Real Estate Forum and can be found at mishcon.com/Propertyshe along with all our interviews and programme notes.  The podcasts are also available to download on your Apple podcast app, the purple button on your iPhone and on Spotify and whatever podcast app you use.  And please continue to let us have your feedback and comments and most importantly, suggestions for future guests and, of course, you can also follow me on Twitter @Propertyshe for a very regular commentary on all things real estate, prop tech and the built environment.

Des was born in Kandy, Sri Lanka, and has lived in London for most of his life. He went to school in Wimbledon and studied economics at Bristol University before qualifying as a chartered accountant at Ernst & Young in 1981. In the mid 1980’s he was responsible for financial planning at property conglomerate Heron International before joining design entrepreneur Sir Terence Conran in 1991 as his business partner and CEO. During their 15 year period together Terence and Des built Conran from a small design company into a global restaurant, retail, hotel and design company employing 2000 staff in the major cities of the world.

In 2006 Des, as its Chairman and CEO led a buyout of Conran Restaurants (now renamed D&D London) a luxury restaurant group that owns and operates over 40 venues in London, Manchester, Leeds, Paris, and New York. D&D also owns South Place, an 80 bedroom luxury hotel in the City of London.

Des is a non-executive director of Fulham Shore, and has previously held non-executive directorships of London First, and publicly listed restaurant and design companies. For a number of years Des has been listed as one the Evening Standard’s Top 1000 most influential Londoners and in 2013 was shortlisted as EY’s London Entrepreneur of the year.

Des lives in Wimbledon with his wife Liz, and have a son and a daughter.

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