BT EXCLUSIVE

The man who sold Thai Express returns

Singapore

THAI Express co-founder Dellen Soh sold the home-grown restaurant chain to Thai-listed hospitality group Minor International in 2008.

But one decade on, he is back in the driver's seat. Mr Soh once again donned the hat of chief executive, this time at local unit Minor Food Group Singapore in March last year, when he was tapped to think up a turnaround plan.

He returned at a critical time: Minor Singapore - which manages not just Thai Express but also Xin Wang Hong Kong Cafe and Poulét, among other brands - was facing quarterly losses.

As the new year opens, Mr Soh is confident that he's the man for the fix-it job. Having trimmed headcount and closed eight ailing stores - Minor Singapore now has some 50 - he is gearing up to invest in renovations, new brands and overseas growth.

Mr Soh, who expects Minor Singapore to be back in the black with its full-year results for 2018, told The Business Times: "We are no longer going for cookie-cutter expansion."

He hopes to bring Minor Singapore back to its heyday within five years.

The company's bottom line had peaked in 2013 - two years after Minor International consolidated its stake in Thai Express - with a full-year net profit of 380 million baht (S$16.3 million).

Parent group Minor International's latest financial statements showed a net loss of 30 million baht in the Singapore restaurant business for the nine months to Sept 30, 2018, as revenue slid by 17.5 per cent on the previous year to 1.23 billion baht.

When asked how Minor's financial situation went downhill, Mr Soh points the finger at fevered price competition in an overcrowded food and beverage sector. With industry margins notoriously thin, earnings could not withstand the revenue drop, especially if costs were not cut quickly enough.

Promotions won't buy repeat customers, he explains. He has eschewed partnering discount coupon apps, and is begrudging the decision to join food delivery platforms.

Now, he is banking on mass-market casual dining, at price points that are wallet-friendly but not cut-throat.

In a bid to justify the menu prices, Mr Soh has budgeted S$8 million to refurbish outlets, with about half of that to be spent this year. But "with any brand that is successful, I would not open more than five stores", he adds, citing concerns over brand fatigue and product inconsistency.

New brands include Thai chicken rice eatery Go-Ang Kaomunkai Praunam. Minor Singapore opened Go-Ang's first restaurant here last year, and Mr Soh wants to double down on the hunt for potential partners.

"Singapore is still our base so I need to protect it," he says, when asked why he wants to import brands despite a supposed market glut.

"I need to bring in something that can attract people to come and eat regularly."

Meanwhile, Mr Soh wants Minor Singapore to make at least 30 per cent of its revenue abroad in five years, as he pursues opportunities such as a joint venture with Catalist-listed Japan Foods Holding. That deal, unveiled last month, will see the partners jointly franchise and run their brands in Japan, Thailand and China.

He has not ruled out fresh joint ventures in other markets, but is shying away from franchisees in case the brand fails and "they tell me all the nonsense things and I may not know the real reason why it was not successful".

I would never work with people who just want to cash out," he adds. "I want somebody who will stay."

Other ideas that he is itching to implement include seeding new eateries to be helmed by up-and-coming Singapore cooks, as well as opening casual dining joints for local fare. (Hae mee, or prawn noodles, would be a good start, he says.)

Mr Soh says he was asked to return as CEO in January last year and has bought back into the business as a sign of his commitment.

He declines to disclose details of his re-investment, but corporate records show that he has a roughly 8 per cent stake in Minor Singapore.

"They understand that giving me this free hand is so that I can change the company fast," he says.

"Because, if I needed to have board approval for everything, trust me, I'm not going to be able to turn it around so fast."

Mr Soh's hands-on approach to leadership includes dropping by each store and building rapport with restaurant managers.

But while he may get to cut through red tape, he stresses that this does not make Thai Express his personal fiefdom again. He hopes to hand over the reins in three years or so.

"I'm glad that within just nine months, I've been able to turn the whole situation around," says Mr Soh.

"It was tough - lots of firing, lots of scolding, lots of negotiating with landlords - and, on the other hand, I had to take care of the brand."