 |
 |
 |
 |
 |
 |
 |
 |
Shopping Centers Today -> August 2007
 PRINT THIS STORY: |
  CHANGE TEXT SIZE: |
U.K. CHAIN WAGAMAMA NOODLES U.S. MARKET
Noodles are the first meal many people learn to prepare — and often the first they can afford at the threshold of adulthood.
So perhaps it is not surprising that noodle joint Wagamama is doing so well. The surprise is that the chain has taken so long to come to the United States.
Wagamama has certainly thrived in Britain. Founded in London in 1992 by restaurateur Allen Yau, a Hong Kong emigrant, its elegant but affordable menu and sleek design caught on. For all its popularity, though, the company spent the first five years developing its name by means of only two restaurants before Yau left the company. In 1998 he sold his stake to an investment group with more-extensive expansion plans.
Over the next decade, it did expand. Dublin, Ireland, was the chain’s first international location, followed by restaurants throughout Europe, the Middle East and Australia. Ownership shifted twice during that time, eventually leaving private equity firm Lion Capital with a majority stake as of 2005.
Late last year, with roughly 70 restaurants worldwide and an expanding fan base, Wagamama finally decided to venture into the one market it had thus far avoided: the United States. Boston was the most logical entry point, according to CFO Paul O’Farrell. “It’s not only a marvelous city, but also a great gateway to the U.S. from England,” Farrell said. “There was a customer base that already knew of us.” The chain opened its first U.S. restaurant in April, at General Growth Properties’ Faneuil Hall Marketplace. “We’ve already been very well received,” said publicist Kate Shamon. The company would not disclose international sales figures and said it was too early to provide the U.S. ones. “There are long lines at lunch time,” Shamon said, “with everyone from tourists to residents to local business owners.”
The chain attracts large numbers of college students, perhaps in part because the prices fall within their means. The menu, with its Asia-inspired mélange of noodle and rice offerings, traditional side dishes and freshly squeezed juices, charges just $9 for an entrée.
The chain’s philosophy may also contribute to the appeal. “Wagamama” is the Japanese word for a willful or naughty child, and indeed the design layout seems to evoke a kind of mischievous atmosphere. Many of the long, communal tables span the width of the dining area, obliging the parties of diners to mingle while the meals are prepared in the expansive, open kitchen. Orders are transmitted by means of wireless, hand-held “waitpads,” and the meals are served as quickly as possible, even if that means staggering the deliveries within a party.
The company is looking ahead to its American expansion, and goodness knows General Growth is game. “We would welcome them in any project,” said Michael McNaughton, General Growth’s vice president of asset management in the Northeast region. “They’re offering something Americans aren’t accustomed to, and they’re doing it well — I’ve seen waits of up to two hours during peak dining times.”
McNaughton and General Growth were actually sold on Wagamama long before the Faneuil Hall restaurant opened. “We were doing work in the U.K. and got wind that Wagamama wanted to come to the U.S.,” McNaughton said. “So we sought them out, and the timing perfectly coincided with our plans to restore Faneuil Hall with key retailers.”
McNaughton says the chain’s established customer base, sound business plan and numerous accolades were attractive, even though the joining of center and tenant involved some incongruity. “It was tough to combine the historical aspects of Faneuil Hall with the hip feel they were seeking, but Wagamama pulled it off,” he said. “Combined with how family-friendly they are and the price point … it’s all very well done.”
Wagamama’s reception in Boston bodes well for a U.S. expansion, opines Paul G.W. Fetscher, president of Great American Brokerage, a brokerage firm; and RestaurantExpert.com, a consulting business. “I imagine it’ll meet with ready acceptance,” said Fetscher, who has done no business with Wagamama beyond dining there. “It’s a little Zen-like — clean, slick, spacious. The price point is spot-on — nothing is outpriced, and the menu is designed to deliver perceived value and generate repeat customers. And it doesn’t limit itself to a meal period. You can get a good meal at 3 in the afternoon or 11 at night.” Fetscher speculates that the chain could have its pick of locations. “Wagamama will easily fit on the coasts and even in sophisticated mid-American cities like Denver, Columbus and Kansas City,” he said. “I don’t consider them to have any national competitors.”
But Shamon insists the company will be slow and deliberate about its U.S. growth. For a start, it will not grow through franchises there for the time being, even though that was the route it often took elsewhere in the world. In the interest of keeping a close eye on things, the company says, any U.S. units in the foreseeable future will be company-owned.
The company does have definite plans for a restaurant in Cambridge, Mass., but is otherwise undecided at this point. “There’s no expansion plan beyond that, because we want to see what issues arise and what tweaks need to be made,” Shamon said. “We’re going to consider the success of the first two locations and go from there.” | Current Issue October 2008 |