Usain Bolt’s UBTR Falmouth dream, UK buildout on track, says KLE
KLE Group, which oversees the Usain Bolt’s Tracks & Records restaurants, UBTR, is hunting property even as it assesses potential traffic numbers for possible market entry in Falmouth, Trelawny, the parish from which the sprint legend hails, and where Bolt has indicated he wants the brand to have a presence.
At the same time, pricey properties in the United Kingdom are challenging the group’s original plan to build out 15 UBTR locations across the UK by 2022, even as its executives maintain that the timeline is holding firm.
“We have been looking at locations in Falmouth for some time now. Until the conditions are ideal, we won’t be able to confirm dates for this location. The site-selection criteria focus heavily on market characteristics which support a business of this type,” says KLE Group CEO Gary Matalon.
Doubts about traffic numbers to sustain a Falmouth restaurant is a big concern, he acknowledged.
The UBTR restaurants are being built out through franchising. Its first franchise outside its Kingston home at Marketplace on Constant Spring Road was shuttered in Ocho Rios, with Matalon citing high cost to drive business to the Pineapple Place location as the primary reason for what is said to be a temporary closure.
Asked whether a contemplated new location, expected to come on stream later this year, will involve a change of franchisee from husband-and-wife team Joshua and Marsha Jhamnani, Matalon was non-committal.
“Discussions around the legal structure are ongoing,” he said. “I have indicated in the past that KLE aims to expand its corporate footprint in the near future as a means to diversify revenue streams beyond Marketplace and take advantage of the economies of scale, particularly through expansion in Jamaica. At this point, I’m unable to confirm where exactly the corporate locations will be.”
Since its foray into Ocho Rios three years ago, UBTR franchises have opened in Montego Bay and London, with the western Jamaica location said to be doing very well since its launch one year ago. It has seen a spike in business since the S Hotel opened immediately beside it earlier this year. Both the franchise and hotel are controlled by Chris Issa.
At the UBTR restaurant’s opening in May last year, Bolt said he was pleased with the brand’s MoBay entry, even as he expressed what he said was a long-held desire for the restaurant bearing his brand to touch down in the Trelawny capital, where he attended school and spent much time as a youngster.
Matalon says Falmouth is still, and has been, on the table for some time.
“We went as far as negotiating with Royal Caribbean for a specific location on the pier when it was under construction. Subsequent to that, we have had a couple rounds of negotiations with the Port Authority for sites adjacent to the pier. At this point, we are yet to tick all the boxes necessary to confirm a location, but hope that this will change as we continue our market due diligence,” the KLE CEO says.
The Royal Caribbean cruise line owns commercial property in Falmouth, which it oversees through subsidiary Falmouth Jamaica Land Company Limited, and which sits landside the cruise pier there.
The first UBTR overseas location at Middlesex Street, Spitalfields, in London’s trendy, regenerated East End, is now six months into its operation and Matalon says it is keeping the KLE team and its UK franchisee “very busy”.
“So far the concept is performing as we expected,” he said.
“We recently signed on with some of the local delivery aggregators and table booking services. This opened up another level of activity at the restaurant. Hosting sports viewing events and live music came on stream in March with great success.”
As for KLE’s previously declared plan to open 15 UBTR restaurants across the United Kingdom by 2022, the KLE chief executive says the plans are “moving along nicely”, but are somewhat scaled down.
“The target remains the same; however, we will be making adjustments to the model as we go forward to enable us to enter some of the smaller markets with a reduced footprint version that captures the same style and vibe of the full-scale model,” Matalon said.
“Site selection is key and can’t be compromised in any way. The property market in the key cities in the UK tends to be challenging, but we are moving aggressively towards securing the next few sites. I was in London two weeks ago looking at potential sites with our franchisee,” he said.
KLE’s operations and finances were challenged in 2018, with the company reporting an operating loss of $13.43 million and total net loss of more than $25 million.
This year, however, the company is projecting to significantly improve its operating results, including raising financing to clear $68.7 million in debt, of which $12 million is owed for taxes. For the projected turnaround, KLE says it is looking to the coming on stream of franchises for which negotiations are under way.
Matalon explains that KLE’s profit and loss accounts for 2018 were affected by franchising fees being booked in the prior year, while costs associated with the franchise start-up were booked in the period ending last December but the revenues are to be reflected in 2019.