Bar operator Arc Inspirations is set to accelerate its growth after securing significant investment from BGF – the UK and Ireland’s most active growth capital investor – for a minority stake in the Martin Wolstencroft-led business.
BGF is investing £19m into the business. The capital will give the business substantial fire power as it looks to double its footprint over the next few years by opening multiple bar sites in major UK cities, deploying its ‘cluster’ strategy.
Today’s announcement marks a new phase for the business, paving the way for an accelerated rollout of its three premium brands Banyan Bar & Kitchen, BOX and Manahatta. The investment will support the company’s ambition to double the business from its current 18 venues, delivering at least four new site openings per year over the next three-to-five years.
Commenting on the news, Wolstencroft said: “We’re absolutely delighted to have secured this investment from BGF who are committed investors with a track record of supporting growth and success in the hospitality and leisure sector. This funding will enable us to expand our business significantly, allowing us to take advantage of substantial market opportunities over the next few years, as we take our winning brands to more key cities across the UK.”
The deal marks the first time Arc has introduced external investment to the group. Its expansion to date – since Wolstencroft and co-founder Chris Ure launched the business in 1999 – has been funded by the business and more recently through a renewed partnership with HSBC.
Wolstencroft, Ure and Managing Director Anni Opong remain significant shareholders in the business. In addition, and as part of this process, Non-Executive Director Steve Richards, CEO of Parkdean Resorts and Chairman of UKHospitality, will continue supporting the executive leadership team as Non-Executive Chair.
The successful conclusion of this investment process comes on the back of a year of resurgence and recovery for the business after the challenges of the pandemic. Arc Inspirations recently posted record annual sales, in excess of £40m, and last autumn opened two new landmark venues, in Birmingham (Manahatta) and Deansgate, Manchester (BOX).
Arc Inspirations operates a cluster model, running premium large-scale bar sites in close proximity to each other, under complementary brands in key towns and cities in the Midlands and the North. It currently employs 1,000 people and its growth plans mean it will recruit a similar number again, over the next three-to-five years.
Most recently it announced plans to open a new £2.5m Manahatta on Newcastle’s Collingwood Street on the site of a former Allied Irish Bank, creating almost 100 new jobs. It is the group’s second location in the city – it also operates a Banyan Bar & Kitchen on nearby Blackett Street – and is expected to open in late 2022.
Wolstencroft added: “This investment marks a new phase for our business and is a genuine landmark moment for us, in our 20-year-plus journey, from when Chris and I opened our first bar in Headingley, Leeds, to where we are now with a group of 18 leading businesses run by a team of outstanding operators.
“It’s a brilliant outcome and the reason we have been able to do it is down to our people. The determination and effort they have poured into the business every day, especially in the past year, has been exceptional and we’re really excited about the future and what is possible.”