Hakkasan Group to expand in US and enter Indonesian market
Updated: November 23, 2015 06:48 PM
Hakkasan Group, owned by Abu Dhabi-based Tasameem Real Estate, will step up its international expansion next year by adding two new establishments in the US as well as entering Indonesia.
The new sites in malls at Houston and Honolulu mark the entry into the US of the Yauatcha chain of dim-sum tea houses, which are more casual and less expensive than Hakkasan restaurants, known for fine dining and high glamour, with prices to match.
Hakkasan has grown from a basement Chinese restaurant on a side street in London to become a Michelin-starred global hospitality player.
"Hakkasan is the kind of operation where you dress up and splurge, whereas at Yauatcha you can just pop in for a cup of tea and a pastry or a business meeting," said Nick McCabe, Hakkasan Group president. "There is huge potential because it's more scalable than Hakkasan. It's always been my favourite brand in the portfolio."
The group is expanding aggressively, with revenue increasing almost 600 per cent since 2012. It has outlets in Miami, New York, Las Vegas and San Francisco, as well as cities including Mumbai, Abu Dhabi, Dubai, Doha and Shanghai.
In Houston, Yauatcha will open in partnership with Simon Property Group at the Houston Galleria. In Honolulu, it will open at the International Market Place, which is being developed by Taubman Centers and CoastWood Capital Group with Queen Emma Land.
"It's a great way for us to take the brand into the US," Mr McCabe said. "We have to learn how the US responds to the food offering, and the experience. Once we perfect it, we can take it to the US market."
"Yauatcha needs high volume to be profitable, which isn't the case with Hakkasan. So we wanted to maximise the footfall of the kind of customers we want, and we know they will be in those malls."
The group has had some big successes, including in Las Vegas, but was less successful when it opened a flagship restaurant in New York's Hell's Kitchen in 2012. The negative headlines included, Broadway Turkey Serves $345 Peking Duck.
Mr McCabe said the company had got it wrong. "It was the wrong piece of real estate and it was tough to turn around," he said. "We had a level of arrogance and it was like we were beating our chests: 'Here we come, New York'. The choice of location maybe revealed a lack of understanding of the tribal nature of New York, where you need to get the right neighbourhood and even the right street. But we try to learn from our mistakes and it has made us a lot more cautious."
The company even looked at closing Hakkasan and moving, but decided against it because the restaurant's luxurious fit-out cost millions of dollars and also the price of obtaining a new site would have been so high, Mr McCabe said.
"All companies have failures but we always try to improve the odds," he said. "The level of research in new markets and the financial discipline we have now is far more stringent."
He added that Hakkasan's expansion always depends on finding the right partners, and that dictated the choice of Jakarta over other cities when opening in South-east Asia. The development will involve three brands: Hakkasan; Sake No Hana, a Japanese restaurant; and Omnia, a nightclub. They are all planned to open in Alila Hotels and Resorts' newest development, Alila SCBD Hotel, in the second half of next year.