We interview Hélène Charpentier, court-appointed administrator and associate at SOLVE.
Interview with Alain Renault
We interview Alain Renault, Managing Director of the Sighor group.
DEALCOCKPIT: Can you introduce yourself?
Alain R.: I am the Managing Director of the Sighor group since 2010. I have a highly specialised professional background that began in finance and accountancy, but I preferred orienting myself towards business management rather than working at a firm. I have worked in large companies specialising in commercial food services, mainly in the public sector covering motorways, airports, and railway stations. I have gathered experience within large groups such as Autogrill. I then decided to join Sighor, which was an SME, to develop the market of motorway restaurants.
DC: Can you tell us more about your career as an entrepreneur?
Alain R.: Of course. I have occupied various administrative and financial roles within different companies, always with the aim of being a generalist in acquisition and development transactions. I evolved towards general manager positions, particularly within the Autogrill group, before taking over as director of Sighor.
DC: Sighor is the first independent French restaurant group, financed by equity capital. How did you manage to have 71 hotels and restaurants in all of France?
Alain R.: Sighor is a young company founded at the beginning of the 90’s in Clermont-Ferrand which began by winning an initial call for proposal when the Paris – Clermont-Ferrand motorway was built to manage the first activity of its kind in the era known as “Volcans d’Auvergne.” The company was created by hoteliers and restaurateurs from the Auvergne region, who have a natural fibre for hospitality. They appreciated the management of motorway services and progressively extended their business, starting with the Auvergne region, then expanding to Corrèze, followed by Aveyron, before becoming a genuine representative of all motorway companies in France.
Their primary business was the development of restaurant concepts, but they also provided ancillary services such as fuel distribution and shop management with brands such as Casino and Carrefour. Being one of the only independent companies on the motorway market, which is dominated mainly by major international groups, our culinary specificities, our methods, and our vision of local products have always given us a share of the market.
More recently, around 20 years ago, the shareholders have decided to diversify their business activities by creating a second branch, namely hotel management, in order to have a chain outside of the motorway with its own specific features: a high level of three-star comfort at a very competitive price. Thus, we today have the Ace Hôtel chain that currently encompasses 33 hotels in France, in its major cities.
DC: Of your brands, do you have a favourite one, and why?
Alain R.: I would have to highlight our brand Origin’R, the most recent addition to our portfolio, because it embodies the slogan “from the land to the plate.” There, we strive to offer local products of excellent quality, making them accessible to the general public. It is a brand to which I am particularly attached. Of course, in the hotel industry, I firmly believe in the future of Ace Hôtel.
DC: What are your long-term objectives and what is your development strategy?
Alain R.: We recently sold our motorway restaurant business to the Areas group, the market leader, due to market evolutions in the restaurant industry, the major investments required, and the effects of COVID-19. We are a team of entrepreneur-shareholders, a business with strong investment capital, which has driven us to choose to protect this branch by entrusting it to a major operator. Our development strategy is now focused on our hotel chain, Ace Hôtel, and we anticipate the opening of two to four hotels per year in major French cities. Parallely, we are working on innovative services related to mobility to meet the needs of travellers, covering restaurants and hotels, as well as vehicles and ancillary services for frequent travellers.
DC: Can you give us an example?
Alain R.: Concerning vehicles, we are concentrating on the sector of new energies and we are building partnerships in order to find tomorrow’s energies. In addition, we are putting focus on the security of heavy goods vehicles (HGV) to protect merchandisers and drivers alike, by ensuring that they enjoy a safe and welcoming environment during their rest periods. This is a new sector on which we are actively working by anticipating future needs.
DC: Coming back to the sale of your company in July, do you think that a development strategy is necessarily a growth strategy?
Alain R.: Yes and no. Our development strategy is based on the economic capacities to execute it with serenity. As a modestly sized group, we choose to develop in a secure manner by deploying considerable financial resources, mainly own funds, to support our establishments in making the necessary investments. This approach aims to ensure stability and, in case of difficulties, we can be compelled to sell companies to reinforce our own funds and facilitate the redeployment towards other activities. This is our strategic choice.
DC: The hotel and restaurant industry is constantly evolving. How do you adapt your acquisition strategy to current market trends and consumer preferences?
Alain R.: The hospitality industry has become considerably more complex since the COVID-19 pandemic. Particularly the commercial food service industry, and even more so travel-related catering services, are confronted with the management of varying customer volumes, which demands a different approach to that of restaurateurs in the city. Hospitality being the sector most severely affected by the pandemic, the last two years have been difficult. Furthermore, the consumer’s vision on the catering world has evolved, which raises the necessity of finding tomorrow’s recipes to satisfy clients. It is likely that significant changes are materialising in the hospitality market, potentially resulting in certain chains disappearing.
DC: The brand Origin’R is hence part of the new era of catering services and consumer expectations?
Alain R.: Certainly. However, consumer expectations are equally evolving in the hotel sector. For example, clients are now looking for perfect connectivity, as if they were in the office. Hotels are becoming living spaces, and their services will evolve to offer co-working spaces where clients will be able to enjoy snacks and pastries. In these new surroundings, hotels will become real living environments, playing a central role in the daily lives of clients, over and above simply providing accommodation.
DC: Can you elaborate on the influence of COVID-19 and staff shortages on day-to-day operations?
Alain R.: COVID-19 had a significant impact on the restaurant industry, particularly in the public and travel sectors, requiring to maintain opening and service capacity, even during a pandemic. It was a very complex process, with considerable challenges for the staff. The second important aspect of this period is the change in people's attitudes and mentality towards professions and their expectations of them. This has led to a shortage of staff in the sector. While this is somewhat less pronounced in 2023, there are still major disparities in France, and we are trying to bring new satisfaction to our staff. Hotels, on the other hand, have smaller teams and can offer a more satisfying working experience for employees.
DC: Customer experience is essential in the hotel and restaurant industry. How do you ensure a smooth transition when you integrate new establishments into your group?
Alain R.: Under concession contracts, particularly for motorways, business activities are subject to frequent transfers, as contracts are generally of short duration, not exceeding 10 years. When we arrive, we have a dedicated transfer team that implements new organisational structures. The human aspect is paramount, knowing how to welcome and support existing teams that can be destabilised by the changes, with a focus on training and day-to-day accompaniment. The first month of opening is crucial to the success. From the clients’ point of view, the introduction of a new operator is usually accompanied by a reform of commercial tools and the modernisation of offerings, which generally brings a new satisfaction to the regular clientele of the service area.
DC: What are the indispensable elements for ensuring a smooth buying or selling process?
Alain R.: When it comes to acquiring a company, in-depth research is essential. It is vital to obtain a documentation of the business that is as comprehensive and accessible as possible, right from the start. Data Rooms play a key role in this process, providing a fast connection and guaranteeing the security of the information for optimal efficiency. This also applies in reverse, as the seller. The implementation of structured databases, with clear segmentation and summaries, has been an asset in satisfying potential buyers, thus facilitating the evaluation process.
DC: You place your trust in DealCockpit, and we thank you for it. How have you come to know us?
Alain R.: I discovered your company thanks to the services of an M&A firm, Sefico Nexia, that uses your solution. They suggested several tools and I chose DealCockpit when I decided to open a very large Data Room for the sale of the motorway branch, which comprised more than 12 companies and 35 establishments, which was a truly voluminous database. Our collaboration began with this experience.
DC: Can you explain why you are a DealCockpit user?
Alain R.: We use DealCockpit for a large number of operations, be it acquisitions, disposals, or transfers. It is particularly useful for operations of transfer, which require less regulations than acquisitions or disposals, and which often involve remote parties. The tool allows a rigorous and smooth transmission of the documentation, and we continue using it for projects of all sizes, whether short (three to six months) or longer. Building the database is easy and can be done quickly and in-house, without the necessity of external tools.
DC: What can we improve?
Alain R.: Day-to-ay administration does not appear to be difficult, there are few potential points of improvement. One of these points concerns the necessity to give users or collaborators access rights to each new folder once the architecture of the file summary has been completed, which is not necessarily intuitive. This is a functional detail that could be an area for development. Another aspect, although we have done some good work on the Data Rooms with Fiona without any difficulties, concerns the archiving process, particularly for smaller complementary databases, where it could be useful to place greater emphasis on the archive management at the end of the project. These are my main issues, but generally the platform works well.
DC: Thank you for the feedback. Do you have a last piece of advice for entrepreneurs?
Alain R.: With hindsight from my experience, I would like to stress the importance of tools such as DealCockpit, for both the acquisition and disposal processes. More generally, one should not hesitate to undertake an acquisition process, even if it is time-consuming and requires skill to implement, but neither should one hesitate to sell a company that perhaps does not correspond to the current strategy, because that is part of the life of an entrepreneur, and it is nothing to be ashamed of. Having tools such as yours remains a valuable opportunity for all entrepreneurs.