What does future hold for Paesano and Sugo in Glasgow?

Hospitality industry veteran Paul Stevenson struck a deal to offload the restaurants to long-established operator The DRG, Glasgow-based owner of brands such as Di Maggio’s, Café Andaluz, and Amarone, for what was understood to have been an eight-figure sum.

It looked like a great piece of business for Mr Stevenson, who feels he has found the right custodian for brands that have carved a special place in the hearts of many Glaswegians since the first Paesano opened on Miller Street in 2015. He is 65 and perhaps feels now is the right time to pass on the baton.

And it certainly looks to have been an astute move by The DRG, which seems in no doubt that it can roll out the much-loved Paesano and Sugo brands to other parts of the country, replicating the success it has enjoyed with concepts such as Café Andaluz. With the Paesano restaurants and Sugo attracting around 22,000 customers per week between them – a remarkable achievement given the ongoing cost of living crisis and pressures faced by operators on overheads – it is easy to see why.

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“In our discussions with Paul, it quickly became clear that we shared a clear vision of bringing the Paesano and Sugo experience to more locations,” said Mario Gizzi, who owns The DRG with Tony Conetta.

“We have shown repeatedly that we have the ability to take exciting restaurant concepts and expand them in a planned and successful manner, and it is going to be really exciting to do the same for Paesano and Sugo. They are brilliant brands - everything from the signage to the interiors, and particularly the food - is absolutely perfect.”

Mr Conetta noted: “We have watched with admiration how Paul has built the restaurants into powerhouse brands in a hugely competitive market and are really pleased that he will remain on board as a consultant as we develop our plans to roll out Paesano and Sugo more widely.”

The sale of an independent business to a much bigger player can elicit different emotions among consumers, however.

Some people have expressed concern that Paesano and Sugo will simply not be the same without Mr Stevenson running the show, albeit he has joined The DRG as a consultant.

In one respect the deal brought to mind the controversial sale of the beloved Ubiquitous Chip restaurant in Glasgow’s west end to pub giant Greene King in 2022. Some fans of the fabled Chip voiced fears that the culinary flair and ambience which had gained it fans around the world would be lost under the ownership of a major corporate player. And there was some stinging (and grossly unfair) criticism for the Clydesdale family for selling up to Greene King.

But it would be incorrect to overdo the comparisons between the Paesano/Sugo and Ubiquitous Chip deals.

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The DRG may resemble a large corporate from the outside, but it is without question independent. The business has been nurtured and gradually expanded throughout the country since it was established with the opening of the first Di Maggio’s Italian restaurant in Shawlands in 1985.

The Di Maggio’s brand, which now includes popular restaurants in Glasgow city centre and East Kilbride, has become a favourite of many families in the west of Scotland over recent decades. Moreover, Di Maggio’s is by no means the only part of The DRG, with the company having successfully introduced brands such as Café Andaluz and Amarone, as well as owning establishments trading as The Anchor Line, Barolo, Cadiz, and The Citizen.

The DRG portfolio had grown to more than 20 outlets prior to its latest acquisition, with the company recently revealing its intention to move into London and plans to add a further outlet in Newcastle. It made an operating profit before exceptional items of £5.04 million on turnover of £45.8m in the year to April 30, 2023.

Of course, all those achievements do not necessarily mean that The DRG will be a good custodian of Paesano and Sugo. Customers of Paesano and Sugo are entitled to express concern that the offer they have come to love under Mr Stevenson’s guidance may not be the same under their new owner. Will the pizza be the same? Will the restaurants retain their commitment to fresh, Neapolitan produce and ingredients? Will the prices change?

These are all valid questions, and only time will tell if such fears are to be realised.

But it would be short-sighted to bet against such an experienced operator as The DRG not only maintaining the appeal of these restaurants but replicating their success in other locations.

Mr Stevenson said Paesano is at its heart a “very simple offering” and alluded to a special alchemy it has created from the quality of produce and ingredients the restaurants use and the craft of the Neapolitan chefs who make its hugely popular pizzas.

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As long-term admirers of Mr Stevenson and his restaurants, and indeed having held discussions with their former owner prior to the acquisition, the owners of The DRG will have better insight than most into what makes these venues tick.

Having invested an eight-figure sum, in other words more than £10 million, to buy the business from Mr Stevenson, it would simply not make sense for them to risk spoiling a recipe that has diners flocking to these restaurants in their thousands every week. If anything, they have an incentive to make them better still.

There are of course plenty of examples of independent businesses losing their lustre when a big player takes them over. It is often the nature of the corporate beast to strip out costs in the pursuit of profit, actions which dilute the essence of what made a restaurant special in the first place.

Many consumers also have a natural distrust of major brands, preferring to give their custom to small traders who have put their life and soul into building their business.

No doubt, some will believe Paesano and Sugo will never be the same again. But I would humbly suggest that The DRG will have as good a chance as any of maintaining their appeal and taking them to newer audiences.

It is certainly good enough for Mr Stevenson, who declared that he was looking forward to watching the business expand under its new owners “while preserving everything that’s made Sugo and Paesano so special”.