Beirut is saturated with restaurants, but how many are owned by 17 women and two men? That is the story behind Pinocchio, the five-month old $140,000 Italian ‘Pizzeria-Trattoria’ in Ashrafieh. The 140-chair restaurant threw open its doors for business in January, and has since been consistently packed for lunch and dinner. So much so that by mid-may, majority shareholder Saad Kazan, claimed that he and his “angels” had recouped their initial investment. Come autumn, predicted Kazan, he will have doubled his money. By then, if Pinocchio is swallowed by the Beirut whale, he and his co-investors will move on to new pastures.
“Doubling your investment in six to seven months is fine by me,” he laughs. “It’s fine by any standards.”
Another option is to close for the summer, when the majority of those people who would normally eat out, head to the beach instead. According to Kazan, in order to keep the brand fresh it is better to shut down and open in late autumn than compete with the beach clubs and have empty tables.
Kazan explained that he initially exploited a gap in the market for a real, traditional pizzeria in Achrafieh. “We’re selling more than 200 covers a day – more than double what anyone expected, including our suppliers. Now every supplier in Lebanon is banging down my door. They wouldn’t give me the time of day a few months ago. Sweet revenge, eh?”
But it is Beirut’s army of ladies who, like the emperor at the Circus Maximus, will have the final say. According to Kazan, Beirut’s restaurant sector is fickle at the best of times. His challenge is to survive beyond the summer season. “The customers are blasé,” he noted. “Whatever you give them is fine for a short period of time, and then they move on. This is why we needed an edge.”
The edge is, in fact, the female investors’ social connections, which have helped generate business. “We are doing well because of these women,” Saad concedes. “We did a good thing to let them in here. They’ve been the driving force behind this restaurant.” On any given day, he said, 90% of customers at lunchtime, and 50%to 60% for dinner, are women and friends of my partners.”
Nonetheless, Kazan has factored in Beirut’s short restaurant life expectancy into his business strategy. “I was fully aware of the situation when we set up. That’s why we have low overheads and are aiming for a fast return. I know that things could easily go wrong after a few months, even with the success we are having now. Success wanes quickly here and we had to factor that in.” He and his wife hold a 25% stake in the business. Two other investors have 15% and 10% shares respectively. The remaining 50% are spread in small, chopped-up parts (either 2.5% or 5%) across the other shareholders. Of the 17 female investors, all are of what the founder called a “certain social standing and they bring in the business.”
The minimal cost, low-risk, quick buck strategy explains, as well, why the initial investment was spread across more than a dozen people. It would be “sheer madness” for one person alone to shoulder the financial burden in the anticipation of drawn-out success, said the founder. “I would never do it. Unfortunately some of my colleagues have. They’ve lost a lot of money.”
Pinocchio’s simply decorated wooden-focused interior cost $25,000 to fashion. A $4,000 to $5,000 landscaping job set up an outside garden terrace for the summer months. And monthly costs run at around 50% of revenues – which are over $125,000 a month.
Nice work if you can find it.