Essence: Opening Restaurants in a Tidal Wave
"We are going to have losses this year and possibly also next year, but we have to see it as an investment," says Xavier Mitats ( Barcelona, 1958), founding partner of the restaurant group Essence. Mitats, a former partner of El Tragaluz, sold his stake last summer with the entry of the investment fund Miura and began to build a restaurant group based on Agua , which was left out of the operation with Miura.
Mitats created Grupo Esencia, and entrusted the management to his third son Guillem. In November, they opened Tierra, at the Ninot market in Barcelona, and they were about to open the third restaurant, Brisa, in the Palau de Mar... Covid-19 has been like a tidal wave that has destroyed all plans. "We closed Tierra with the lockdown and since it is in the market, we have not been able to reopen it. We opened Brisa a few days ago... albeit at half throttle. Turnover is just 25% of our forecasts. Or of last year's turnover, in the Water."
The group invested $4.5 million in opening Tierra y Brisa and planned to make $12 million this year with its three stores.
Mitats already had the experience of landing in a tsunami in the previous crisis: he signed with Astroc, Enrique Bañuelos's real estate company, in 2006, to direct its expansion in Brazil. "No one could imagine that an event like the bankruptcy of Lehman Brothers would come and devastate world finance." Now, he highlights, governments are making the situation much better, "with ERTE and ICO credits to finance losses." Thus, Essence, which should have about 120 workers, has only 45 working, with as many others in ERTE and others who have never been hired. "We businessmen must make an effort to open up, to keep the city alive. There are entire areas that, if they deteriorate, will never tear off."
Mitats began his professional career as an economist and auditor. After Arthur Andersen ("the best school in the profession"), he co-founded Arraut y Asociados ("Javier is one of the people who have taught me the most in my life") and later, in 1998, he founded, with Carlos Puig de Travy, a consulting and auditing firm that was the embryo of what is now the Spanish subsidiary of Crowe Horwath International.
At the same time, however, it starts in the leisure and restaurant sector. “Rosa Esteva and Tomás Tarruella, the founders of El Tragaluz, were Arnaut's clients, and they proposed that I partner with them in Agua,” she explains. In 1998, he promoted a tourism project in Cuba with the French group Macumba and the Giró Group, and during those years, he began collaborating with El Tragaluz, providing partners to open restaurants such as Negro and Bestial. Also in Brazil, when he was running the Quabit subsidiary, he opened a restaurant in Fortaleza, which he still manages today.
"It runs in my family," he admits: his father launched Virmit, a company that sold and exported textile machinery, which was later run by his brother.
“Catering is a very rewarding business. People enjoy themselves, laugh... And in the 90s, I also had a lot of margin, more benefits than glamour.” The situation is more difficult for the sector today: rising costs of rents, salaries, and raw materials, which cannot be reflected in the price. "People want to have dinner for 30 or 40 euros... like twenty years ago." For this reason, it recognizes that it is a helping group: it creates administrative synergies, with suppliers and salespeople, because of the trust that the brand gives. Essence expected to have a turnover of 12 million in 2021 and continue to add local sales, some milestones that will be delayed. "Our priority is to consolidate the two new restaurants," in which the firm has invested 4.5 million euros.
Esencia also participates in the restaurant of the Barcelona Tennis Club, managed by Gonzalo Ros and Carles Vera. “I'm from the Llafranc Tennis Club. I love tennis. And in a country that has Nadal, it's impossible for there to be people who don't like him.”
Learn more about: Tierra Brava
Learn more about: Brisa Restaurant