Will these bubbles ever burst?

Boutique champagne bars are bucking the downturn and opening their doors – to record profits. John Stimpfig reports.

April 10 2010
John Stimpfig

Not so long ago you could almost have counted the number of independent champagne bars in London on the fingers of one hand. There was Kettner’s, the old Soho staple, and er, not a lot else. Which was a bit odd. Not least because the economy was going gangbusters – as were retail sales of the world’s most fashionable and luxurious liquid.

Then, just as the worst global downturn in decades steamrolls in, a premier crew of champagne bars pops up all over the capital. Talk about bad timing.

One of the first was Texture Restaurant and Champagne Bar in September 2007. “Unfortunately, it was just as the party was coming to an end,” says MD Xavier Rousset. “It was not the best time to launch. But by then, we were committed. There was no turning back.”

As the recession loomed, Amuse Bouche opened its second venue, in Soho, in late 2007, just as Searcys’ wonderfully elongated trainside bar at London St Pancras grabbed the headlines.

Next up was the Veuve Clicquot outlet in Harrods in October 2008. Hard on its heels was Searcys Champagne Bar in Westfield’s The Village. And the end of 2008 was when Kettner’s decided on an expensive refit – just as the credit crunch really kicked in. MD Neil Wicker recalls being nervous about whether anyone would subsequently show up, but two years on, they’ve all done more than just survive. Against the odds, they have positively prospered.

“Last year, the St Pancras Champagne Bar and Grand Restaurant notched up a 20 per cent increase on 2008,” says general manager Michele Cartwright. And it was the same story at Searcys Champagne Bar at Westfield, situated within cork-popping distance of Gucci, Dior, Louis Vuitton, Tiffany and Prada. Here it has been standing room only for thirsty shopaholics as champagne sales have gone ballistic. In its first year, it sold more than 100,000 glasses of fizz, 28 per cent above its own high expectations.

The heady mix of fizz and fashion has also worked a treat in Harrods for Veuve Clicquot, which hit its annual sales targets within three months of opening. And it has been like that since. “We’re constantly busy,” says bar manager Neila Buth, who sells up to 75 bottles of the Veuve Clicquot range every day. It’s mostly £15 flutes of Yellow Label rather than £350 bottles of La Grande Dame Rosé 1998. Nevertheless, “People are queuing before we open at noon and are there till we close at 7.45pm.”

Veuve Clicquot isn’t the only Grande Marque to set up its own branded bar in recent times. Let’s not forget the Perrier-Jouët Bar in Harvey Nichols. Or indeed, the Bollinger Bars at Edinburgh’s Balmoral, Manchester’s Lowry and at the ENO in London. Dom Pérignon has also got in on the act with a couple of nifty pop-up bars, while Krug has opened its ultra-exclusive Krug Room in London’s Dorchester hotel as well as in Berlin, Las Vegas and Hong Kong.

In fact, with retail sales imploding, the past two years have been tough for the Champenois. And so the bars have provided much-needed support. But there’s more to it. According to Catherine Stockdale, brand manager at Krug, the major houses increasingly want “to own their own stages to showcase the brand and the range”. So it looks like being a bar trend that will run and run. Indeed, in November 2009, Veuve Clicquot opened yet another “salon” – Hunter 486 – at the Arch hotel at the top of Park Lane.

One might think that all this competition would have made life even tougher for independents such as Amuse Bouche. But its record profits in 2009 point to a bumper year – not easy given the depth of the recession. “Particularly when 85 per cent of our revenues come from champagne,” says MD Henry Lane-Fox. “So we’re delighted to have done so well.” The key for Amuse Bouche was knowing its customers and adapting to the market conditions as people traded down.

“What also helped drive up revenues was the willingness of certain houses to really engage and collaborate on some competitive offers, which pulled in the punters,” adds Lane-Fox. “Roederer, in particular, was outstanding in its handling of the situation. But so too were Pol Roger and Piper Heidsieck.”

Inevitably, the average price spend at Amuse Bouche dropped during the downturn. “Last year, it was firmly in the £25-£32 per bottle area, whereas before we used to see much more in the £40-£50 bracket,” he adds. “All our corporate custom evaporated and we saw the demise of City traders laying down their gold cards and ordering a couple of bottles of Dom Pérignon and Cristal. But it’s not just the prestige cuvées that have tailed off. Vintage has also suffered.”

The more austere Zeitgeist also led drinkers to jump ship on the “bling-bling” brands and persuaded them to seek refuge in more discreet houses such as Gosset, Billecart-Salmon and Pol Roger, all of which offered excellent quality – and at less exalted prices. So the de-luxe champagne sector in some bars didn’t expire altogether. “We still moved decent volumes of prestige cuvée and vintage at St Pancras,” says Cartwright. “But it was much more likely to be Gosset Celebris rather than Krug Grande Cuvée.”

At Amuse Bouche, meanwhile, people went “back to brands they knew and trusted”, says Lane-Fox. “What they didn’t want to do was spend their hard-earned cash on an obscure champagne that they weren’t sure of and weren’t familiar with.”

Thus, when Kettner’s reopened in late 2008, many wondered about the wisdom of its radically revamped list, because it binned the likes of Veuve Clicquot, Mumm and Moët and replaced them with tiny artisan growers and smaller, family-owned houses.

The theory was that Kettner’s hoped to provide something altogether more diverse and authentic for its customers to savour. “Too much champagne rests on its laurels. Marketing flim-flam has replaced substance,” claimed the list’s author Nigel Sutcliffe. “We wanted to offer a range of natural, handmade wines, which are more exciting to drink, but not necessarily more expensive to buy.”

It was a bold move. But the result is a tour de force of fizz offering quality, value and variety. Bijou growers include top producers such as Prévost, Egly-Ouriet, Larmandier-Bernier and Vilmart. And the houses are made up of many of the region’s most lauded names – Gosset, Billecart-Salmon, Gratien, Philipponnat and Bollinger, to name but a few.

Also worthy of mention are Ilse Crawford’s glamorous design makeover and an inspired choice of stemware. Now you can opt for the standard flute or the more decadent and nostalgic coupe, rumoured to be modelled on one half of Marie Antoinette’s bust. As a result, sales have put in a sparkling performance. In fact, Kettner’s is selling more fizz now than it did in the glory days of 2007.

All of which begs the question: why has this latest crop of champagne bars done so well despite the arctic economic climate? Perhaps one answer lies in Napoleon’s apposite one-liner about champagne. “In victory, I deserve it; in defeat, I need it.” But many argue that the champagne habit is now so entrenched that it was never something affluent consumers were likely to relinquish completely during the recession.

“I think a glass of fizz is no longer élitist or just for special occasions,” says Cartwright. “Instead, it’s an affordable luxury that people regularly like to treat themselves with – come what may. The designer outfit may have been shelved, but we still want our bubbly to remind us that life is worth living.”

Champagne has always been seen as a good barometer for the luxury economy. If that is the case, then the past four to six months have seen a noticeable pick up – great news for luxury brands in general.

“The last quarter of 2009 was very positive,” says Rousset. “People were more relaxed about buying bottles in the £100-£200 bracket.” The prestige cuvée market is also showing more of a pulse than 12 months ago. In November, one St Pancras customer forked out £7,000 on a limited-edition bottle of 1995 Dom Pérignon White Gold.

All the bars remain bullish about the future, while some are budgeting for dramatic growth. In March, Searcys Champagne Bar at Westfield more than doubled its seating capacity. Similarly, Amuse Bouche is shortly expanding into the City – a declaration of intent and confidence if ever there was one. Over the longer term, it is looking at a series of openings in major provincial centres.

Meanwhile, Searcy is also on the cusp of a major growth spurt now that its bars represent the most profitable part of its catering empire. It is aiming to launch at least five new outlets in the UK this year and is planning a similar number in 2012. “The key is getting iconic venues with high footfall. Then it’s about finding the right staff and products and blending in style and glamour,” says Cartwright.

All of which bodes well for UK fizz aficionados. But the other good news is that on-trade prices seem set to remain fiercely competitive for a while yet. The Champenois still have a serious amount of unsold stock, “so there is a possibility we may see a further crash in the price of wholesale champagne later this year,” says Lane-Fox. Good news indeed for the bars – and their thirsty customers.

See also

Bars, Champagne