The world is full of successful CEOs, innovative entrepreneurs, and risk-taking business owners, but every person follows their own path to the top. In our monthly interview column, How to Succeed, we pick the brains of industry leaders to find out how they got to where they are today.
While you may not know who Sandeep Sekhri is, you’ve surely dined at one of his restaurants. The CEO of Dining Concepts, Sekhri runs a total of 29 restaurants and bars around town, from casual cafés such as Brussels import Le Pain Quotidien to casual burger joints and full-blown steakhouses including Argentinian restaurant Tango and Causeway Bay grill house Alto. Then there’s the slew of celebrity-chef partnerships that have been instrumental to the growth of Dining Concepts from the start: London House and Bread Street Kitchen & Bar from the British TV chef Gordon Ramsay, BLT Steak from French restaurateur Laurent Tourondel, and Al Molo at Ocean Terminal, whose kitchen is overseen by the acclaimed NYC chef and owner of Altamarea Group, Michael White. Recently, the prolific restaurant group has turned its attention and resources more towards the bar scene, bringing in the creative-minded Ashley Sutton to design a number of extravagant concepts around town: J.Boroski, Ophelia, Dear Lilly, Iron Fairies and Yojimbo, plus several more in the works.
With 15 years of experience in Hong Kong’s gruelling restaurant scene — the competition is only getting stronger as profit margins diminish, says Sekhri — the “king of F&B” has established himself as an accomplished role model not just for budding restaurateurs, but for any ambitious CEO. (He successfully took Dining Concepts public in 2016, paving the way for several other restaurant groups in Hong Kong to follow.) In an interview with LSA for “How to Succeed”, Sekhri looks back on the last 15 years to recount his achievements and pitfalls, greatest challenges, setbacks and successes, and his best advice for any entrepreneur looking for a way to the top.
I’ve been in Hong Kong since 1990. I started off as a restaurant manager, then became a partner in that company after five years. I helped to open restaurants; we also had a hotel supplies company, a point of sales division, a kitchen company — so we did a lot of things relating to F&B. I split with that company in 2002, and I was at a stage where I was not employable anymore. I had been running a team of 250 people, nobody would hire me for the amount of money I was making and there was no way I could continue in my previous job as well, so I had to start something on my own. I literally had no choice.
During the course of trying to figure out where to start and not having a lot of money on hand, it all happened with my designer saying “I’ll design a restaurant for you and I won’t charge you”, another contractor saying “I’ll do this”, and one of the landlords in Central saying, “Ok you can have this place and pay me whenever you can”. So that’s how it all started. To be honest, back then I did not have a vision or a dream to build what we are today, it just happened during the course of the last several years.
I knew when I was 15 that I was getting into the hospitality business. I was academically very average, and growing up back in India one had to be an engineer or a doctor, and I couldn’t be either of them. I loved the people’s part of the business of hospitality. There’s no monotony in this business; every day it’s a new day that brings new challenges. I mean, it’s never been for the love of food or wine that I got attracted to this business, its because of the nature of it. And I sort of figured out that was my natural talent. I was following my natural instincts to get into a business where I could work with my heart and do my best.
I have like 20–30 people who have been with me for the last 15 years, so I would say that one of the key reasons for our success and whoever we are today is because of the team. It’s a people’s business at the end of the day: You have to have the right people, and you have to share your success. You have to make sure they have a sense of belonging as to what they do. We are a passionate and very driven team. We love what we do and we adapt ourselves according to the way the market is, whether it’s picking a location, looking for the right real estate, etc. Sometimes we have the real estate and then we go out looking for a concept. So it’s either the concept drives the location or the location drives the concept.
Definitely — finding the right location for the right price. You kind of work your numbers backwards and make sure you’re conservative in your estimates and you’re not going to lose money. But you know, it’s extremely challenging to find the right location, and then finding the right concept, then finding the right people to run that concept.
Another big challenge is human resources. I used to do all the marketing, the receiving, collaterals and design work myself. Being small is not easy, there’s not that many economies of scale, you know you want to do a lot more but you have so many constraints. You have to hire the right people and give them hope to grow, motivate the team and make them excited.
No, I always knew it would work. Although I didn’t know I was going to be able to open more than 1–2 restaurants. The first was the hardest, and then SARS came like six months after I had started my business and we lost 80% of our business overnight. I had just opened two restaurants at the time, Bombay Dreams in Central and one in Kowloon, and it actually became an immense opportunity as nobody was ready to take the risk. I had nothing at that point, I had lost everything anyway so I was like, ok, with whatever else I have let me open another one.
I saw a lot of potential in SoHo those days. And what I realised early on was while most of Hong Kong lost 80% of their business, SoHo only lost 20%, because everyone was coming down to dine in SoHo. So I brought in a designer and decided to up the level of the offerings, and get better-quality restaurants there. That’s when we started bringing in the good chefs. I did Soho Spice in December 2003, and we kind of never looked back after that. I had managed to secure leases for very low rentals for long term which was key.
It was a huge risk, but at that point I had nothing going for myself anyways. I was down and out. And when you’re down and out what else can you lose? You’ve lost everything anyways. So for me it was like losing 90% or losing 100%. Who cares at that stage? People are risk-adverse, because they think, “This may not work”. Nothing was working for me anyways, so I thought I might as well put everything in it.
So I did Bombay Dreams in Central, and then Soho Spice and Olive. Archie B’s and Taco Loco were for sale so I bought those, too, and so it was just kind of one after the other and we kept buying and opening restaurants. I opened seven restaurants in SoHo in the next few years. Then we had the opportunity to do something in Harbour City in 2008 and that was really, really good. That sort of changed all the dynamics of how everything worked, and we ended up getting more opportunities from that.
Don’t take a big risk, but take a calculated risk. The best definition of profit I’ve ever read is: “Profit is a reward for taking risk.” I think the key quality of an entrepreneur is risk-taking ability, and you know you don’t need to go to Macau to gamble: You’re already gambling with your businesses with what you do! Most owner-operated businesses generally don’t fail, because you know you’re focussed, you’re determined, resilient, and hungry to succeed. So you put in your blood, sweat and soul into what you do, and there’s every chance that you will succeed.
When anybody first asks me, I tell them not to get into the restaurant business [laughs]! It’s not for the faint-hearted, you know. The rewards are very limited and it’s a lot of hard work. But if you really love it, there is no better business. You’ve got to be ready to work 24/7 and put your heart and soul into what you do. Heart, soul, blood, sweat. Everything goes into running a restaurant business. And you have to love it — because it’s such a hands-on business. No two days bring the same challenges or same issues. You’re always dealing with different situations, be it employee-related, or landlord-related — it’s mostly always people-related issues.
But I wouldn’t swap this for anything else. I love to see our team grow, and great opportunities have come our way. So just don’t be adverse to taking risk but also take a calculated risk so you’re not putting all your eggs in one basket, like losing it all, and then never opening a restaurant ever again in your life.
Oh, definitely it’s a lot harder because the margins are smaller. The cost of operating business has gone up significantly in the last five years. The wage cost has gone up by 30% in the past three years, and it’s of course harder to get real estate. So it’s challenging. To a large extent the competition has increased because everyone is opening restaurants.
I try not to treat anyone as competition because to me there’s enough room, the pie is big enough, and it’s survival of the fittest. So you need to put in your best efforts and only the fit will survive. And it’s all about how you manage your costs and how you manage people, and what team you can put together. That’s why you don’t see everyone succeeding — only a few restaurants do very well and the rest are just struggling along.
Absolutely, and I love seeing that. Hong Kong’s home for me. We are a made-in-Hong-Kong story. So we love to see Hong Kong succeed and do well. We want more people to come, we want more recognition for Hong Kong as a kind of global food capital. So I love it when we see a great, successful concept.
I think what makes me most satisfied is to see my team grow, and see the kids do so well. They’re all born in front of me and they’ve all grown so beautifully and, you know, with so many people we have possibly one of the lowest turnover rates in town. We’re able to retain a lot of people, so we work like one big family. And that’s probably one of the most rewarding things that’s come out of the last 15 years.
Listing was very challenging but very rewarding. Restaurant groups were traditionally not going for listings. It was never a preferred way to raise institutional capital, but lately this has changed. When it happens, everybody treats you differently, your landlords treat you differently, and everyone looks at you different. You’re more structured when you’re listed, the accounting books are more in order than when you’re a one-man show, so yeah, there are a lot of benefits. But there is also compliance, which is definitely challenging.
Southeast Asia, for sure, but I still see so many opportunities in Hong Kong. There’s so much more we can do here. We’re opening a couple more Le Pain Quotidiens this year. We’re opening another bar in the old police station in Central with Ashley Sutton called Dragonfly. Then we are looking at opening something in Harbour City in the Ocean Terminal extension that should be ready by summer. Internationally, we’re looking at various opportunities for Iron Fairies, or Le Pain Quotidiens — expanding them in Southeast Asia.
I think that raised our profile for sure. That helped with our sort of brand identity, and made us very popular which has been great. Again, it’s all real estate-driven. If I find the right real estate and I find the right chef and the right brand to expand, then I’ll do it. But it’s not a must.
You know, now it’s the other way around: We always get approached to form partnerships. We are in a slightly better position than when we first started! So we’re looking at various different opportunities but nothing is set yet.
I get inspired by what’s missing in this town. What else can I do to up the culinary standards? We’ve gone slightly into the bar business, so I am more looking at Ashley Sutton kind of partnerships where we bring in something unique which doesn’t exist. I’m always looking to create unique experiences, whether it’s Iron Fairies, Boroski, Ophelia, or Dear Lilly now. It’s all about giving something different to the diners.
There are a few groups. But you see, while you can take inspiration from them, what works in North America or in Europe doesn’t necessarily work in Hong Kong. The dynamics are very different, the size is very different, the palate is very different. Hong Kong’s palate unfortunately has a ways to go. What we know is all Italian restaurants will work here, all steakhouses will work, most Japanese restaurants will work. Japanese is probably the most popular cuisine after Cantonese. So while it’s good to take inspiration, you have to understand the local market and the numbers and whether that’s going to work or not. That’s the key.
I would like to see the rules for outdoor seating getting relaxed. We are a world dining city and we should have more alfresco options. Also, the nightlife is limited in Hong Kong because we have a lot of restrictions from the authorities on larger entertainment venues, for example. Although licensing and immigration has really improved tremendously over the last several years — the licensing procedures have been made a lot simpler and easier — I still feel like the city requires a little more vision for bringing in more talent, and more openness with how the authorities approach this.
I think we are making slow progress; events such as Taste of Hong Kong all contribute a lot. I’d love to see a Bon Appétit event, like what happens in Vegas each year. And the Hong Kong Tourism Board should get more involved in promoting the hospitality business in general.
My role has evolved over the years. I used to be very hands-on, working the floor, working behind the bar for the first 2, 3, even up to 8 restaurants. I was very much involved operationally, and then as we grew, we created a proper hierarchy where we have a director of operations, director of design, marketing, finance, etc. who report to me. My current role is probably more strategic planning, financial control, concept development, and dealing with landlords, so I spend most of my time doing that. While I don’t visit the restaurants every day, it’s more troubleshooting. Whatever the team can’t deal with or whatever they need my help with, I’m always there.
Nowadays I travel quite a bit — more for leisure than for work [laughs]. Like I said, scale is extremely important. And once you’re a certain size, opportunities come your way and you don’t have to go after them as much, then you can pick and choose. And so it works out a lot better.
To just be grounded. And not forget your roots. Everything around us is temporary, so all this name and fame and money and success is very temporary. Valuing your human resources is your biggest asset. And treating your people the right way they deserve to be treated. I think it’s extremely important in any business, but even more so in our business because that’s the core of what we do.