Bain Capital bakes £200m deal to take control of bakery chain Gail’s

One of the world’s biggest buyout firms is swallowing Gail’s, the upmarket café chain, in a bet on the continued recovery of the UK’s post-pandemic economy.

Sky News has learnt that Bain Capital has struck a deal to buy Gail’s parent company, Bread Holdings, for more than £200m.

The sale is expected to see Luke Johnson, one of Britain’s best-known hospitality entrepreneurs, rolling over part of his stake in the business to retain a shareholding of about 15%, according to one person briefed on the deal.

Image: Luke Johnson is one of the country’s most prolific hospitality investors

Bain was one of a number of private equity bidders for the business, according to banking sources.

The deal follows a sharp sales rebound at Gail’s despite the pandemic’s impact on the UK restaurant sector.


Revenue for the current financial year is expected to exceed pre-pandemic levels and profitability to hit a record in the 12 months to February 2022.

Mr Johnson’s private equity vehicle, Risk Capital Partners, asked bankers at Nomura to conduct an auction of Bread Holdings earlier this year.

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The sale caps a turnaround for a company which, like its industry peers, was forced to close many of its sites for part of the pandemic and open for takeaway-only service at other times.

Gail’s now trades from nearly 70 outlets, with plans to open dozens more sites – taking the total to more than 100 – during the next three years.

It specialises in selling a range of premium sourdough breads, pastries, and cakes, alongside coffee and a hot food prepared in-store.

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Risk Capital holds a big stake in Bread Holdings, alongside management team members including Tom Molnar, chief executive.

Mr Molnar established the business with Ran Avidan, naming it after Gail Mejia, who was a supplier of premium bread to restaurants.

Its first site selling artisan bread products, hot food and premium coffee opened in Hampstead, north London, in 2005.

Mr Johnson invested in the company in 2011.

Mr Johnson, who could not be reached for comment, is one of the country’s most prolific hospitality investors, having backed restaurant chains including PizzaExpress, Giraffe and Strada during the last three decades.

He also chairs The Brighton Pier Group, the listed operator of the eponymous attraction as well as a number of bars around the country.

Image: Patisserie Valerie was broken up after an accounting scandal at its parent firm in 2019

His status as one of Britain’s most successful entrepreneurs suffered a setback in 2019 when an accounting fraud at Patisserie Holdings, the publicly traded cafe chain where he had been executive chairman for years, was uncovered.

Mr Johnson tried to rescue Patisserie Valerie, its main subsidiary, by providing a £10m emergency loan to keep it out of administration, but the deepening scale of the crisis led to its collapse and break-up.

Sky News revealed last weekend that Grant Thornton, Patisserie Holdings’ former auditor, was close to being fined about £4m by the accounting watchdog.

Bain Capital has been contacted for comment.