Holding company led by Tom Molnar has reportedly hired Goldman Sachs to auction a sale of the 140-store café group, which could see investors Bain Capital Credit and EBITDA Investment exit the business
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Gail’s has been scaling its regional presence beyond London over the last 18 months | Photo credit: Bain Capital Credit
Gail’s parent company Bread Holdings has reportedly appointed New York-based investment bank Goldman Sachs to auction a sale of the boutique bakery-café group.
Led by Founder and CEO Tom Molnar, Gail’s has steadily expanded across the UK – growing from a single site in Hampstead, London, in 2005 to over 140 outlets. The bakery-café chain has been scaling its regional presence beyond London over the last 18 months, opening stores in Manchester, Birmingham, Bristol and Chester, and in April 2024 announced plans to open 35 new stores.
London-based Gail’s could be valued as high as £500m ($525m), according to sources quoted in a Sky News report. The news network also reported that any potential sale would likely lead to the partial or full exit of Bread Holding’s existing backers.
Formed in 2011 as the holding company for Gail’s and wholesale business Bread Factory, Bread Holdings sold a large stake to London-based private equity firm Risk Capital Partners in 2011.
In September 2021, Risk Capital Partners, led by hospitality entrepreneur Luke Johnson, exited the business as part of deal which saw Bain Capital Credit and EBITDA Investment take a controlling stake for over £200m ($251m), with Johnson remaining as Bread Holdings’ Chairman.
In March 2024, Gail’s dismissed reports by Sky News that its investors were gearing up for a formal sales process in 2025. World Coffee Portal has approached the boutique bakery-café group for a further comment.
While Goldman Sachs, Bain Capital Credit and EBITDA Investments have remained tight-lipped on the report, fast-growing Gail’s could be attractive to a number of high-profile hospitality investors seeking growth in the opportune UK branded coffee shop market.
London-based The Nero Group has been steadily building its specialty coffee portfolio, taking full control of Coffee#1 in February 2022 and adding Nottingham-based coffee roaster and café chain 200 Degrees Coffee and London-based travel hub operator FCB Coffee in October and November 2024 respectively.
UK hospitality group WSH could also seek to grow its brand portfolio following the September 2024 acquisition of JAAQ Coffee parent company Genuine Dining for an undisclosed sum. The group, which also purchased boutique café chain, coffee roaster and wine bar Notes in November 2022, also operates the Benugo café chain and contract caterers BaxsterStorey and Searcys.
Gail’s could also attract investment from further afield, such as US confectionery giant Mars, which acquired UK luxury chocolate retailer and café chain Hotel Chocolat in January 2024 for £534m ($679m).
While JAB Holding Company appears to have cooled its focus on coffee acquisitions, the Luxembourg-based investment giant acquired UK food-to-go and coffee chain Pret A Manger for a reported £1.4bn ($2bn) in May 2018 and currently manages a $23bn coffee and hospitality portfolio.