Cowboy re-builders: Gaucho’s ambitious reboot

By Joe Lutrario

- Last updated on GMT

Gaucho CEO Martin Williams on Gaucho reboot Charlotte Street

Related tags Gaucho Steak Casual dining Argentina

Martin Williams is back in the saddle at Gaucho leading an ambitious redesign and repositioning project that – all going to plan – will help the 25-year-old Argentine beef specialist appeal to the next generation of diners.

There’s not a cow hide in sight at Gaucho’s recently overhauled Charlotte Street restaurant. In fact, most would be hard pushed to recognise it as being part of the Argentine steakhouse group, although the photographs of the Pampas-traversing cowboys from which Gaucho takes its name do provide a bit of a clue.

Reopened late last year, the two-storey space is the result of a ‘multi design agency analysis’ that tracked the brand’s aesthetic over the past 25 years, from the industrial Gauchos of the 90s and early noughties to the nightcluby in-your-face interiors that can still be found today with their black-and-white cow hide banquettes and crystal chandeliers.

At Charlotte Street, the latter have been replaced by a more tasteful lighting installation inspired by the gaucho’s lasso, with the rest of the space containing other subtle references to the brand’s South American source material. There are two striking Art Deco bars – a nod to Buenos Aires’ principle architectural theme – subtle equine references and walls painted midnight blue to represent the night skies of Mendoza.

The group’s flamboyant and charismatic boss Martin Williams is happy with the restaurant, which is being billed as Gaucho 2.0. “We looked at the brand’s DNA and asked: ‘What does the modern day Gaucho look like?’ In many ways it was an experiment, but there’s very little I’d change about it,” he enthuses.

Retaking the reins
Williams and Gaucho go way back. The former actor led the chain as managing director for nearly a decade before leaving to set up rival steak concept M in 2014, and looked on from the sidelines as the group was pulled into administration in 2018 by the poor performance of its more casual offshoot Cau.

Williams put in a bid for Gaucho (he also tabled one for Jamie Oliver’s Barbecoa, which had fallen into administration earlier that year) but was unsuccessful. Behind the scenes, however, the group’s well-connected former boss had encouraged Investec – which already owned a big chunk of Gaucho – to throw its hat into the ring, which ultimately led to the group being bought out of administration by Investec and fellow bank SC Lowy.

Williams operated Gaucho on their behalf for six months while the terms of a merger (technically an acquisition) with the three-strong M were hammered out and, in April last year, Rare Restaurants was formed as the mother company for both brands, with Williams installed as CEO.

The rescue deal was a complicated one, requiring a company voluntary agreement (CVA) that allowed Gaucho to renegotiate its rents with landlords and restructure its debt, but has left Gaucho in good shape, according to Williams.

“Both Gaucho and M now have very low debt as well as funds in the bank for expansion. Gaucho’s restaurants have always been successful and profitable. The problem was Cau and a bloated head office,” says Williams, who straightaway halved said head office, brought in his own senior team and pulled the plug on Gaucho’s loss-making overseas restaurants in Hong Kong and Dubai.

The same five key people – CEO, CFO, managing director, culinary director and marketing director – are now responsible for both M and Gaucho. “From a change management perspective it’s been an interesting journey,” he says on the coming together of the two brands. “I thought the Gaucho team might be resentful but they’ve responded well to strong and consistent leadership and a CEO delivering what they promised to deliver. It’s actually been trickier to integrate M because it had been run in such an entrepreneurial way. More people being involved in the decision-making process has been a bit of a challenge.”


The bar at Gaucho's recently overhauled Charlotte Street site

A make-or-break moment
Gaucho may have emerged from administration largely unscathed, but the Charlotte Street makeover still feels like a make-or-break moment, especially when set against the backdrop of the ongoing crisis in casual dining. By Williams’ own admission, the brand has suffered from an historic lack of investment and is facing something of an existential crisis as client entertainment budgets are slashed and people look to reduce their red meat consumption.

“Long boozy lunches still happen occasionally but they are largely a thing of the past. The loyal customers who came to Gaucho when it was a young brand are getting older. We need to attract new blood,” says Williams, who has extremely ambitious plans to refurbish the entire 16-strong Gaucho estate within the next two years at an average cost of £400,000 per site (the Charlotte Street renovation cost £750,000, but around £350,000 of that went on dealing with a long-standing water issue and the damage it caused). Next is Gaucho’s O2 restaurant, which will most likely be followed by Canary Wharf and Manchester.

Evolving the food offer

People chewing through a kilo of steak and necking a bottle or two of malbec was good for the coffers, but now that these occasions are on the wane the new strategy is to make the menu more accessible in terms of price point, day part and the dishes themselves.

“One of the biggest pieces of feedback we got from our customers was that our spend per head was too high. So the strategy is not to increase it,” says Williams, who has introduced more affordable set lunch menus that run into pre-theatre alongside a brunch menu.

“Spend per head is now flat but sales are growing due to cover growth. In the corporate market people are now looking for an accessible price point so they can entertain clients on a limited budget, and we can provide that while giving people the opportunity to spend more if they want to.”


Gaucho's menu has been expanded to include more lighter, contemporary dishes

Though high-quality Argentine steak is still at the core of Gaucho’s food offer, the scope of the menu has increased considerably. Using modern, cosmopolitan Argentina as his muse, executive chef Mike Reid has introduced ambitious dishes that appear designed to pull in customers outside Gaucho’s traditional demographic while simultaneously asserting the brand’s gastronomic credentials. Dishes include scallop ceviche with apple gel, compressed apple, pickled celery, cucumber and citrus dressing; beetroot tartare with mango ‘yolk’, avocado, sourdough crisp and buttermilk dressing; hake with chanterelle mushrooms and butter sauce; and aubergine Milanese with tomato, rocket and parmesan.

As well as introducing lighter, meat-free dishes, Williams is also reaffirming Gaucho’s steak expertise with a four-cover ‘beef bar’ that offers a four-course tasting menu. Exclusive to the Charlotte Street restaurant, the experience culminates with diners cooking their own steaks (under supervision from the chef) on a tabletop Konro grill.

The changes to the menu have required a major shake-up in the way Gaucho’s kitchens operate. “We’ve had to add in new equipment and ensure we have better trained chefs than we did historically. It’s had an impact on the amount of labour we need but it was the right decision to upskill and launch a more sophisticated menu. At the price point Gaucho is there’s an expectation of quality. Now we’re delivering on that. I’m not sure we were a few years ago.”

Williams is also looking to position Gaucho and M as the ethical choice for those wanting to eat steak. The Charlotte Street site is trialling ‘carbon neutral beef’, which is achieved by carbon offsetting, in this case planting trees in the Amazon. Gaucho is currently working with institutions including Cambridge University and the University of Buenos Aires to try to calculate exactly what the footprint of Argentine beef is.

“We suspect it’s incredibly low. There are no deforestation issues, it’s grass-fed, there’s no intensive rearing and it’s shipped over. It will soon be rolled out across the group when we’re sure we know exactly how much we need to offset. There is a cost but the modern diner cares about the carbon footprint of their meal. There’s certainly a commercial element as well as a philanthropic one.”

Rewriting the wine list
Gaucho’s wine program has also been overhauled. At its peak the list had over 250 bins which – aside from champagne – were exclusively Argentine. As rich and diverse as the country’s wine scene is, a selection of 100 different malbecs was probably overkill. During the administration process the list was slimmed down dramatically as the numbers of suppliers and the holding stock were slashed, leaving about 30 wines.

“The list had historically been large and lazy so it was a great opportunity to start again,” says Williams, who has ditched Gaucho’s profitable but not especially good value own-label strategy and looked beyond Argentina to offer a wider range of styles, as well as some big hitting, blow-the-budget bottles to tempt bonus-happy City types.

“We’re now about 70:30 in favour of Argentina. The exclusivity was problematic because people would ask for a particular wine and we’d have to suggest an Argentine equivalent. As brilliant and good value as the country’s wine is, there are inevitably some things they do better than others.”

Former Wines of Argentina Europe director Andrew Maidment has been brought in to create the new list, which showcases Argentina’s ‘innovative modern wineries’ that have little to no presence in the UK. In a further boost to its eco credentials, the Charlotte Street Gaucho has eight KeyKeg wines that save as much as a tonne of glass a month.


Gaucho has ripped up its wine list and started again

Growing the brand
So far the changes to the menu and wine list across the group have been beneficial in terms of both bottom line and cover growth (the latter was recently clocked at 14% up on last year). Gaucho 2.0 has been more successful still, insists Williams, with like-for-like sales currently up 20% on the previous year.

“We’ve demonstrated we can grow like-for-likes, but we need to demonstrate that Gaucho has the potential to open new sites in order for the value of the company to grow, which is clearly the aim when you have shareholders.”

Williams is “looking hard” at an opening in Liverpool towards the end of this year or the start of 2021. He also wants to increase the brand’s presence in its City heartland (about a third of Gaucho’s estate is positioned in and around London’s financial district) as well as repeat the success of its (typically) smaller ‘lifestyle restaurants’ that currently mine the capital’s more well-heeled neighbourhoods.

This last ambition provides a neat segue into M. While its first two sites in the City and Victoria have performed well, its Twickenham M Bar & Grill – a smaller version of the M concept
that looked to emulate the success of Gaucho’s neighbourhood restaurants – has proven a tougher sell.

Williams describes the site’s performance as “disappointing”, with it being far too reliant on the rugby. On an international game day it can take as much as £75,000, and the weekends are fairly strong, but midweek is more of a challenge. “It’s a work in progress,” he says. “It’s more about Twickenham being a tricky village. I’m happy with the offering itself and think it offers excellent value for money.

“It’s a restaurant we could probably force to be successful but I want my restaurants to be organically successfully. If you’re having to put additional energy and resources in, it’s right to question whether it’s worth it.”

The performance of M Bar & Grill has dampened the enthusiasm for bringing M to other outlying areas of London and even the regions, as was originally the plan, with Williams ruling out any further openings under the brand. It’s now a case of go big or go home when it comes to the smaller brand within the Rare Restaurants stable.

“M is a 9,000sq ft brand with a multi-faceted offering that includes a members’ club,” he says. “Gaucho is a specialist steak place that takes smaller sites. It gives the two brands a good point of difference.”

The first new M for three years will open in Canary Wharf’s Newfoundland development in November. In a departure for the group, which draws much of its inspiration from the steak-producing countries of South Africa, France, Australia, Japan, the US and Argentina, the restaurant will evoke the feel of the French Riviera (the skyscraper it occupies the lower levels of is surrounded by water). The nearly 10,000sq ft space will comprise a 200-cover restaurant, 100-cover bar, 50-cover PDR, 100-cover members’ area and a 100-cover terrace. It will also feature a separate grab-and-go element but what it will serve has yet to be decided.

Not being put out to pasture
Charlotte Street is an effective evolution of Gaucho’s design and one that hasn’t cost the earth, especially when compared with the amounts that Williams’ key competitors in the more upmarket end of the branded space – including the likes of Hawksmoor, D&D and Richard Caring’s The Ivy Collection – are spending on their sites.

Gaucho 2.0 appears to have been well-received by regulars and newcomers alike, as have the estate-wide changes to the group’s proposition. Yet given the prevailing market conditions, Williams still has his work cut out (his plan to refurbish the whole estate in under two years seems particularly ambitious).

“There’s a lot of love and enthusiasm for the brand, especially in the business community. Big milestones were celebrated in these restaurants. Change has been well-received. People are happy that a brand that had become a bit tired and lazy is still around and evolving.”

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