Progressing the Group’s stated strategy to expand its presence in the evening casual dining environment, Famous Brands has acquired a 51% stake in contemporary Greek restaurant chain, Mythos.
The purchase consideration falls below the threshold of a categorised transaction in terms of the Listings Requirements of the JSE Limited and will be settled from cash reserves. All conditions precedent have been fulfilled and the effective date of the transaction is 1 November 2015.
Famous Brands’ Group Chief Executive, Kevin Hedderwick, says, “In line with our goal to compete more vigorously in the sit-down evening casual dining category, we have been actively exploring acquisition targets which align with our best-in-class criteria. The Mythos brand ticks all the boxes. This acquisition provides a significant opportunity to boost our offering in a market segment where we are under-represented and which affords strong growth potential for our business.”
Mythos was launched in 2006 by founder George Kutra. The original restaurant was opened, and remains, in the Design Quarter in Fourways, Sandton. Today the Mythos chain comprises six additional restaurants located in a range of high-end malls in the greater Johannesburg and Pretoria area: the flagship restaurant in Bedford Square (Bedfordview); Irene Village Mall (Pretoria); Brooklyn Design Square (Pretoria) ; Cradlestone Mall (Krugersdorp); Monte Casino (Sandton) and the recently opened Mall of the South (Johannesburg).
Hedderwick says, “In the South African context, Mediterranean, and especially Greek cuisine, is a category traditionally dominated by small, independent operators. Mythos is unique insofar as it comprises of a chain of restaurants, has a strong well-established brand profile, and enjoys a large, and growing, customer base.”
“The brand’s loyal consumer following is evidenced by its awards for ‘Best Greek Restaurant’ in the 2013, 2014 and 2015 Leisure Options Readers’ Choice Awards,” he notes.
Hedderwick outlines the compelling rationale for the transaction:
“Mythos’s target audience is upper-LSM consumers, a market segment which has consistently proved its resilience in the current weak economic conditions. The research derived from our other premium brands illustrates that customers with robust disposable income remain enthusiastic spenders. Mythos is well positioned to capitalise on this trend with its authentic cuisine, stylish décor and personalised service, which combine to provide an aspirational contemporary dining experience.”
He adds, “There is substantial opportunity to expand the scale of this business from a regional to a national offering. Mythos’s footprint is currently confined to the greater Johannesburg and Pretoria area and our intention is to roll out the brand nationally in due course.”
Hedderwick says, “A key component of our investment rationale is that the existing trading restaurants have delivered an impressive multi-year track record in terms of turnovers, margins and profitability; as such, Mythos offers a compelling investment proposition for prospective franchisees.”
“Furthermore, there is an immediate upside to the transaction in that we will vertically integrate components of Mythos’s business which are currently outsourced into our Famous Brands’ business model. This includes functions such as procurement, manufacturing, distribution, and restaurant development and design,” notes Hedderwick.
As with Famous Brands’ other JV partnerships, the services of the founder-owner, George Kutra, and his management team will be retained. Hedderwick comments, “Having conceptualised Mythos almost ten years ago, George has a passion for and commitment to growing the brand to its full potential, which will be facilitated with our support.”
George Kutra says, “Famous Brands was created by a family of entrepreneurs and today still embraces the entrepreneurial spirit which we admire. My father was an entrepreneur from a young age, and during our own childhood, my sister and I would help him in his stores, which is likely where our work ethic and passion for owner-managed business comes from. Today my family remains extensively involved in Mythos: my sister, Helen, has been instrumental in helping me grow the brand; my mother, Irene, is key in bringing her traditional Greek recipes into our kitchens; and my father, Dimitri, tirelessly oversees our operations at our flagship Bedford Square restaurant.”
He adds, “We are very excited to be offered the opportunity to partner with Famous Brands, the leading foodservices company in Africa. Thanks to their infrastructure and the respect with which they are regarded in the industry, we are confident that this partnership will be beneficial in helping us to grow the Mythos footprint in South Africa and beyond.”
Kutra believes that the factors which underpin Mythos’s leadership position in the category will be invaluable in achieving the brand’s ambitious growth strategy. He says, “Our restaurants are owner-managed by carefully selected franchisees with unwavering high standards. While our customers love the authentic vibrant Greek dining experience which Mythos offers, it is the consistently high quality food and service which sets us apart and will enable us to gain a foothold in new markets across the country.”
Hedderwick concludes, “We are delighted with this acquisition. Mythos has a distinctive, aspirational identity and stands out in the cluttered evening dining category. Its best-of-breed qualities and inherent expansion opportunities position this brand for vigorous growth. Over the next five years we will target a network of 30 restaurants nationwide.” Source: Famous Brands