Spur Group CEO Val Nichas stretches out her hand to greet me. “Where is the ‘s’?” she asks. I get it straight away. She is referring to the fact that my name Ari (Hebrew for lion) is missing the “s” of Aris (the Greek god of war).
Malcolm Gladwell’s thoughtful book Blink argues that a first impression gives a great glimpse of character. If so, Nichas is emotionally intelligent. The focus was me. The missing “s” shows attention to detail. Perhaps delve deeper and conclude that she is proud of her Greek heritage.
I am meeting with Nichas for an interview, drawn by the financial scoreboard of Spur since she moved into the ranch in January 2021. In the period since settling in, revenue is up about double to R3bn to June 2023. Pretax profits have doubled to about R300m.
Then there are the operational smarts. In the 2023 financial year, marketing costs are up 70% to R300m, while operating costs are flat. Nothing better than marketing the brands off a lean cost base. Covid kept the revenue base low and easier to grow. A good strategy was a perfect add-on.
Franchisees are backing Nichas with more investment in the stores. There are improved efficiencies at group level. This has flowed through to the operator at the ranch.
Vastly more important is that the share is up double at R26 a share since Nichas pushed open the saloon doors.
A Jewish father interviewing a Greek mother. We cut each other off. We lost our train of thought and ultimately, she got up. She had to go. She was late for another meeting. We still had to scurry to get a photo together. Let us stand, she said. I suggested we sit. She acquiesced and sat. Nichas was right. The sunlight filtered through the window and threw a silhouette over the photo. If you blink then Nichas doesn’t have to win on the small stuff. However, mess with the big picture, the strategy … well, don’t.
Nichas takes me back to the Pretoria CBD in the 1960s. I have this mental picture of her dad’s tearoom. I can see her stocking goods on the shelves and pricing the items. She is young, perhaps single digits in age. Her mom is feeding the parking meter with coins so customers can shop in the store. Of course, lollypops for kids.
No wonder the customer comes first for Nichas . She is building the Spur Group strategy by deepening the understanding of the customer and so sell, accurately, the different brand stories to the right markets.
As an example, note the reinvention at Spur Stores. New bold signage. The tinkering with the Spur TV adverts. More hip but not too much jive because it is always about the family. There is a deeper strategy with smaller configurations of stores on the horizon.
After school, Nichas built her career off a marketing base. She was always sought after. A divisional head at Edgars in fashion and then leading the Wimpy brand in Famous Brands. In 2012, she took time out from corporate life and built her own consultancy. She laid out strategic plans for customers in the retail space. Now, she brings all that understanding to the Spur Group.
It is hard to fathom leadership. Look at Spur. There is the innovator and creator, Allen Ambor. Poles apart from the next to lead — Pierre van Tonder. At 6ft 4in, he was a big man and the head honcho at Spur. In a space where every franchisee owns a ranch, you needed a proper cowboy to keep all the other cowboys in line. Van Tonder was your man.
Nichas has now stepped in. A more structured leader. A strategist. Perhaps she was born to lead. This from the time she was chosen to be head student at high school.
Let’s have one last check-in to the past, before the handover of the keys to Nichas.
It’s early 2000s and Van Tonder is with me in Angola. I have built a bureau de change business in Luanda. There is a new shopping centre. He is searching for opportunities to build the Spur brand in Africa. Manchester United are about to kick off against Chelsea (Van Tonder was a fanatical Manchester fan). He is going to miss the game. It is prime-time Luanda CBD. Bumper-to-bumper traffic. He is getting impatient. This very quickly builds up to extreme restlessness. Remember he is big. I need to note he is in a small car. The driver panics, jumps the curb and drives on the pavement all the way to the hotel. We get there in time for kick-off.
Van Tonder was unforgettable.
I remember the incident as though it was yesterday. He was passionate. Think his soccer team. He was hands-on. He didn’t send an emissary to Angola to view the opportunity. He had a spirit that could inspire, though that could daunt, consider the restless energy that affected the driver. Then consider his positive energy that may very well still pulse in Spur today.
Nichas remembers the call from chair Mike Bosman. “How do you feel about running 500 stores?” he asked. Nichas had built a consulting business and was ready to take on the next challenge. She had the strategic skills and this was a dream opportunity. The timing was perfect. Certainly, a shrewd call by Bosman. The target CEO should have been a current operator in a big quick service restaurant or a casual dining setup. Bosman and Nichas had worked together at TBWA, an advertising agency.
Nichas walked into a financial structure that was out of rhythm. There wasn’t a consolidated monthly report on performance, just scattered reporting: a regional report here, a brand report there. She grabbed the situation by the scruff off its neck. She can be tough. Today there is clear reporting monthly in brand silos and much better business planning.
This concludes the first phase.
Now phase two: the next three years. Nichas’s focus is simple, in that nearly 70% of the revenue of the Spur Group is in the Spur stores. Certainly, smaller formats will lead the way to growth. Nichas has grown to love the brand. It is a power brand. If you disagree, name another serious steak ranch in South Africa.
Nichas showed her hand with the purchase of Doppio Group and an indication of the intention to build up the speciality brands inside Spur Group. This is where Doppio will fit. There is R375m in the bank, hence enough to hunt the “sit down” businesses. Also, money is tight among the smaller operators in the casual dining space, which means it’s a good time to pick up good value. Speciality brands now include Casa Bella, Hussar Grill and Nikos, a Greek eatery.
Nichas is building a strong core team to implement her strategy. I dropped into Hussar Grill in Mouille Point to chat to the operator of the speciality brands, Justin Fortune. Fortune is a no-frills guy, he cuts straight through to the truth.
“Nobody likes change, I don’t. There was fear.” Justin is describing the emotional impact of Nichas’s arrival. Suddenly there were rules. This was new and disconcerting, as before there was a much looser structure. Today the strong structure has Fortune’s nod of approval. He is referring to the brand silos. As important to the team, there are talented young leaders operating the bigger brands Spur, RocoMamas, Panarottis and John Dory’s; they are future leaders. Kevin Robertson is group COO, with 30 years in Spur. Quality decisions are a combination of youthful energy and experience.
Ultimately, the share has languished over the past five years, and is now R26 a share, even with the mighty share rise over the past three years. Nichas is going to take Spur into a new world; her world of tighter controls and clearer strategies.
IM’s prognosis is that the share is a short distance, perhaps 12 months, from R40 a share. This is on the basis of great brands, a great operational team and a great strategy to grow customer revenue. Also, expect smaller brands to be acquired.
Spur has new energy in Nichas and her strong strategy. But never forget the past, filled with the spirit of Pierre van Tonder.
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