Martin Stead is building a Thai business empire. He met Deputy Business Editor Greg Wright.
Mention the word “due diligence” to most business people, and they will tell you tales of days – and usually nights – spent at their desks, analysing reams of data.
Back in 2004, Martin Stead and his partner Kim, carried out some “due diligence” with a difference.
It involved driving around the suburbs of Leeds, and checking out the number and quality of Thai restaurants.
They concluded that Leeds was crying out for a city centre Thai restaurant. Almost a decade later, Mr Stead plans to create a £50m turnover business by 2015, which will be built around Britons’ passion for Thai food, as he creates a network of restaurants in every major UK city.
When I met him at the place it all began, the Chaophraya in Leeds, Mr Stead’s passion for his fledgling business empire was palpable.
In the not too distant future, his company, the Leeds-based Thai Leisure Group, could provide you with everything from a takeaway to a massage.
The firm’s growth is being built around the success of the Chaophraya restaurants, which have defied the economic slump to attract growing numbers of diners. Consumer spending is being squeezed, but Mr Stead believes there’s cash to be made from our growing interest in Thai culture.
The first restaurant opened in the heart of Leeds in December 2004, after Mr Stead concluded that he had the willpower and the financial backing to make it work.
Chaophraya is named after a river in central Thailand, which has been the scene of tumultuous events in Thai history.
Mr Stead’s partner, Kim Atcharaporn Kaewkraikhot, ran a restaurant in Bangkok for seven years before coming to Britain. Last month, Chaophraya’s growth plans received backing from banking giant Santander.
Chaophraya, which has restaurants in Leeds, Liverpool, Manchester, Sheffield, Birmingham and Glasgow, secured £2.4m of growth capital to open a new restaurant in Edinburgh in November. The company also plans to expand the Leeds restaurant.
Each new site is expected to create about 30 jobs, so it will provide a shot in the arm for the local economy. In the 2012 financial year, the restaurant chain’s holding company, the Thai Leisure Group, turned over £21m and achieved EBITDA (earnings before interest, taxation and depreciation) of £4.5m.
Mr Stead’s business career began in the early 1980s, when relatively few Britons had visited Thailand.
“I left school at the age of 16, after scraping through with two CSEs,’’ he recalled. “I went on a YTS scheme and got an apprenticeship as a printing engineer.”
At the age of 21, he moved into the family foundry business, Abbey Industrial Solutions, which had just six staff and a turnover of around £1m.
“It was a real opportunity for me to feel the pulse of a business,’’ said Mr Stead. “I loved it and I still live and breathe it.
“I spent 20 years in that sector, going through the ups and downs. You can’t let go of that. It’s probably 10 per cent of my business life, but I was ready for a new challenge and wanted to try something new.
“Kim and I are both very ambitious people. I wanted to be pushed and challenged. We spent quite a few months driving about the villages around Leeds. We analysed the Thai restaurant operators there. We decided the city centre market was untapped, and that was where the potential was.”
Initially, growth was modest. A Chaophraya restaurant opened in Manchester in 2006, followed by one in Liverpool three years later.
“I call the period from 2004 to 2011 ‘chapter one’,’ said Mr Stead. “We were flying by the seats of our pants.
“We took stock in 2011 and said, ‘OK, there’s huge potential here. But we need an infrastructure in this organisation.’
“Two people were running the business. We knew we needed to bring in a senior team that we could trust to bring the business forward. We’ve had significant investment in the people side of the business.
“It’s quite a challenge for Kim and me to let go. It’s quite painful, but it’s also quite exciting.
“But if you let go, and you’ve got the right people around you, the impact is huge.
“I love to let people fly. It puts the business in a completely different place.
“For ‘chapter two’ of this process, I didn’t want just to take people from the major chains.”
Mr Stead decided to hire senior people from outside the restaurant world because he wanted to attract people who were “visionary and had great people skills”.
He added: “We’ve pretty much nailed all the major cities in the north of England.
“We’ve also moved into Scotland, with Glasgow and Edinburgh.
“With the Chaophraya brand, we want to get into the top 20 major cities.
“The wish list includes London, but if we move into London, it’s got to be into a ‘statement’ building.
“It could be a 12-month journey to get that right location. But you’ve got to go to London to establish a brand identity.
“Historically, people have started in London and then moved out from there.
“We’re going to turn that on its head, by nailing all the major cities outside London before we move in there.
“I would like to go into an exclusive part of London, which could be Mayfair. I’m looking for 7,000 to 10,000 sq ft and doing a fitout of around £4m, because the London market for Thai restaurants is untapped. It’s screaming out for something new.
“In 2013, I would like to get into Newcastle and Bristol.
“We’re also looking at Cardiff and maybe even Dublin.”
Mr Stead is a bundle of restless energy, who never seems short of enthusiasm or ideas.
However, he is acutely aware of the dangers of over-expansion.
“It’s all about developing the Thai Leisure Group,” he said. “I don’t want to stop, because I become bored.
“We want to move into different areas of the leisure market. I like the whole Thai village concept, whether it be massages, supermarkets or take- aways.”
Mr Stead said his plans could also involve delivering the products to the major chains, such as Marks & Spencer.
“There’s so much more to do,” he added.
“If you want to know anything about Thailand, your first port of call in the UK should be to go on the Thai Leisure Group website.
“There is a knowledge-based side to the business, which will help with its expansion. We do a lot of research and development in Thailand.
“We probably spend three months a year in Thailand.
“We’ve got a lot of ideas in the pipeline,’’ he said. “But we have to keep our feet on the ground. For now, we’re very much focused on establishing the 20 restaurants and hitting that £50m target.”
Martin Stead Factfile
Name: Martin Stead
Date of birth: December 10, 1966
Title: CEO Thai Leisure Group
First job: YTS/Printing Engineer
Education: scraped through with a couple of CSEs – Royds School (Oulton, Leeds)
Last book read: Feel the Fear and Do it Anyway
Favourite song: Under Pressure, by Queen & David Bowie
Favourite holiday desti-nation: Khiri Mat, a village near Sukhothai in northern Thailand
Car driven: Austin Martin DBS
Thing you are most proud of: Picking myself up and constantly getting back in the saddle. You must have fun and be not too serious.