1. Make brief background reference to Johnson’s education and basic details.
2. Make a report about Luke Johnson (a Serial Entrepreneur) and the number of companies involved in.
3. Show the defining moments in the subject’s career.
4. Investigate Johnson’s competitors, market share.
5. Analyse the entrepreneur using a specific model that is relevant.
6. Make reference to problems that the entrepreneur faced and how the individual overcame these issues.
Luke Johnson, known for his very successful development of Pizza Express, is not by any standard ‘a normal’ entrepreneur.
Business ventures include:
• Started an evening event at a local nightclub with partner Osmond during his time at Oxford University.
• 1993 Took control of Pizza Express with Partner Osmond.
• Created ‘Signature’ which owns ‘The Ivy’, ‘Le Caprice’ and the ‘Belgo chain’.
• Started and developed the Italian restaurant ‘Strada’.
• APT controls – Market leader in car park equipment
• Founded Integrated Dental Holdings (1996-2006), which sold for over £100 million.
• Chairman and part owner of ‘Bread Holdings Limited’ (artisan bakery)
• Founder of the private equity firm ‘Risk capital Partners’ in 2001 with partner Ben Redmond.
• Luke Johnson’s private equity firm went on to invest and become the lead shareholder in Giraffe. Whilst still allowing the founders of Giraffe creative and managerial discretion.
• Chairman of 3Sixty restaurants which controls ‘The Rocket’ and ‘Ego’.
• Johnson became a strategic investor in Beer and Partners 2010 – Biggest investment agency in Britain – Johnsons investment into beer and Partners is known to some as ‘angel investment of the decade’.
• Chairman of ‘Fast Track’- leading UK business in networking events and research focusing on the top preforming private company
• In 2010 Johnson gained control of ‘Feng Sushi’ – a chain of Japanese restaurants which specialise in delivery.
• Director of 2 theatre production partnerships – ‘Playful productions’ and ‘Fiery Dragons’.
• September 2010 Johnson bought the majority stake in ‘Ego Group’ – a casual dining firm.
• Former investor in ‘Seafood Holdings’ – a fresh fish distributor. Sold in 2010 for £45million.
• GRA – The UK’s largest greyhound track – Johnson is principle owner and has been since 2005.
• Johnson previously was principle owner of ‘Mayfair gaming’ (chain of Riva bingo clubs) from 2004-2006.
• Chairman and part owner of ‘Patisserie Valerie’.
• Chairman of ‘Druckers’.
• Part owner of ‘Baker and Spice’.
“Don’t put all your eggs in the same basket” – A quote Luke Johnson appears to live his life by.
❖ Writes for the financial times
❖ Used to write for the telegraph
❖ Chairman of channel 4 for 6 year
❖ Stock analysis
First career movement
Johnson and Osmond started a local event at a nightclub in Oxford, they collected entrance fees whilst the club kept the entire bar’s custom. It is here when Johnson realises the opportunities in business and begins to see his future steer away from the medical profession and into the world of investment and entrepreneurship.
Defining the Career
1993 – The year of decision that gave him a name in the business world. Johnson took control of Pizza Express and developed the company from 12 venues to 250, share price from 40p to 900p by the time he decided to sell out in 1999.
Once gaining control Johnson immediately had big plans of change, which were to be implemented in certain areas of the company. These include:
• Head office staff
• Head office buildings
However, Johnson was adamant that some aspects would not change. These included:
• The Menu
• Branch managers – Johnson believed that the works provided by these individuals were up to standard and moving in the direction that Johnson wanted
Johnson shows the qualities of an entrepreneur throughout his time with both Strada and Integrated Dental Holdings, as both companies’ become very profitable and economically dependable.
1. Johnson started Strada from scratch – transforming it from nothing to a 30 restaurant chain.
2. In 2005 Johnson sold the company for £60million to Richard Caring.
3. Caring then sold Strada two years later for an estimated £140milllion.
Integrated Dental Holdings:
1. Johnson was non-executive director of Integrated Dental Holdings since 1996 and he sold out for over £100 million in 2006.
2. Johnson developed the company to become the largest dental surgeries chain in the UK with over 500 qualified dentists.
It was a successful venture, however, problems found proved to be difficult obstacles.
• Early 2003, jobs for dentists were in high demand.
• Integrated Dental Holdings was no exception.
• IDH had a staff deficit of at least 100 staff.
• Staff they wanted to employ (polish staff) may not be liable to work.
The Answer to the problem:
• Jo Wier – recruitment consultant was brought in to inhibit change.
• Wier’s first action was to seek staff from European countries that had large amounts of legally qualified dentists.
• It was noticed that the standards in Portugal, Poland and Spain were very impressive
• In 2004 Poland became a part of the EU and heavey screening test were given to those applicants, where their abilities were scrutinised and tested, to ensure the standards were just as high as the UK.
• The entire structure of the firm was changed by turning the normal recruitment system into a 3 person team whose credentials were perfectly fitting for the role.
The failing company
Johnsons private equity firm invested into ‘Borders’ and bought the UK branch for £10million upfront and a further £10million consideration.
Facts about Borders:
✓ Borders Group although being bought out has managed to retain 17percent of the company.
✓ 8% market share in the books industry in the UK.
✓ 70 stores in the UK
✓ Figures of £223million were generated through sales in the lead up to 2007 February.
✓ In some Borders stores small Starbucks cafés can be found.
Johnsons Plans for Borders were to develop and expand the company’s borders (excuse the pun), from just books to:
• Computer games
However, Johnson didn’t want to stop there, he believed changes could be made in the following areas:
❖ Shop floor
❖ Stock taking
This shows Johnsons entrepreneurial character by his desire to expand and innovate.
The initial competition came from rival book store W H Smith, but the 28 borders superstores and 41 Books etc. outlets eventually came under control of Johnson in
By entering such an evolving market competition was always going to fierce. Competition came from other specialist book stores such as ‘Waterstones’, supermarkets and online business such as ‘Amazon’.
Johnsons reasoning for going head to head with such companies was due to his belief that true book lovers prefer the atmosphere of the Borders store to a supermarket.
Also, Johnson believed the in the USP his business had, which was a hugely diverse collection of books.
It was an optimistic view, because Johnson had failed to acknowledge the innovation of online bookstores and the advantages of using sites such as amazon.
Key advice given by Johnson is “don’t take on a business which is undergoing serious structural change” because an individual is not bigger than the market.
Entrepreneur or Projector?
Johnson involvement in his projects is very high and this is shown by the drastic changes in revenue, profit and cost management. This is shown by increases in annual figures for many of his businesses, such as:
❖ Pizza express
❖ Integrated Dental Holdings
❖ Bread Holdings Limited
❖ Patisserie Valerie
Johnson is open about his feelings towards investments and is open about his reluctantly to start-up businesses from scratch. The reasons for this are:
1. There are numerous more risks when starting up a business than investing into and developing a current exsiting business.
2. Time – Starting a business from scratch takes far more time and effort.
3. Initial costs are very high without any accurate forecasts in regards to revenue and production costs.
Johnson shows he has the business mind which enables him to be regarded as an iconic business figure by his strategic investments. However, is Johnson a true entrepreneur?
An entrepreneur can be described as:
Johnson ticks every box when it comes to defining characteristics of a successful entrepreneur. But Johnson only ever tends to invest into already existing businesses with the exception of Strada. So is he an entrepreneur? There are two things to take into account, which are:
❖ Previous and current ventures
So the debate becomes whether it is the entrepreneur’s principles/characteristics or the work the individual has done that defines an entrepreneur.
The Facets model
• Focus – Concentrated on achieving goal. “Entrepreneurs are not balanced people and lose any work/life balance,”. “But that’s why they succeed.” This shows that if a goal is to be achieved nothing can get in the way and the social to work ratios is going to be unbalanced. Johnson used this focus throughout his career, an example of this is through the work of Pizza Express when he put all his time into developing the business into huge progression via the use of new tactical strategies. (http://www.telegraph.co.uk/finance/festival-of-business/8796050/Telegraph-Festival-of-Business-Luke-Johnson.html)
• Advantage – Making the right decision as to what business/company to invest in. A great example of Johnson’s good decision making is through his private equity firm, through the use of his team, collectively the company has made countless investments into company’s which have managed to develop due to the investment and create large profit margins.
• Creativity – The ability to bring new ideas to the table. Johnson is creative in some respects despite his creative input into his company’s. Johnson owns Seafood Holdings; this is beneficial towards his restaurants because he is able to provide smaller unit priced goods because of his involvement in the wholesalers market. This is a clever and beneficial investment which doesn’t just help reduce costs but it also gives Johnson the ability to have a number of his company’s working closely together.
• Ego (Inner/Outer) – Inner is self-confidence, Outer is courage. Johnson’s confidence is obvious by his extensive investment history.
• Team – Surround yourself with individuals that will enhance improvement and innovation. Johnson manages to surround himself with various key individuals which were vital to his success. Such as Osmond and Russell Joffe.
• Social – Dedication to an cause and ensuring it is delivered.
Johnson set out to study medicine but early into his career he decided to move to business and investment. This proved to be an extraordinarily good decision, because soon into his career he came across Pizza Express which was a defining moment for himself and the company. Johnson went on to develop his profile considerably, by investing into various different types of businesses such as his private equity firm which later goes on to invest into more diverse areas, thus allowing him to gain market share in companies such as beer and partners which is a company which helps small to medium sized businesses in all areas of their work. Entrepreneurs are defined by character, although Johnson invests rather than starting up new businesses he is still an entrepreneur because of his characteristics of needing to succeed.
1. (Helen Kelly, 2/7/2007, Nationwide shortage of dentists inspires Integrated Dental Holdings to hire recruitment consultant to source staff from abroad, [online], available at: < http://www.personneltoday.com/articles/2007/07/02/41305/nationwide-shortage-of-dentists-inspires-integrated-dental-holdings-to-hire-recruitment-consultant-t.html > Accessed on 20/11/2011
2. (Laura Cummings, 15/05/2003, Pizza express entrepreneur looks to future, [online], available at: < http://news.bbc.co.uk/1/hi/business/3021321.stm > Accessed on 18/11/2011
3. (Luke Johnson, n.d, About Luke Johnson, [online], Available at: < http://www.lukejohnson.org/about > Accessed on 18/11/2011
• (Anna Borowiec, 21/11/2008, FACETS model based on an entrepreneur Richard Branson, [online], available at: < http://www.borka.zont.pl/Virgin.pdf > Accessed on 16/11/2011