It’s important to learn as much as you can during a downturn so your business is prepared for the future.

Luke Mangan’s mum and dad had to wonder what game God was playing when they wound up with seven boys and no girls. And when their little Luke was shown the door at his school at the age of 15, his bank manager dad, who was known for his disciplined ways, gave him an insight to a business philosophy that has helped him to become one of the country’s most successful chef entrepreneurs.

“When I told him the bad news about being asked to leave, I wanted to have an option to put before him,” Mangan says. “In fact, I tell my staff today not to come to me with only a problem but also come with a solution or another option.”

Luckily for Mangan, one of his brothers was a chef at the famous Melbourne restaurant — Two Faces — and he was given a chance to do some work experience, which he liked a lot better than school. So that was the option he presented to his dad and the rest is culinary and entrepreneurial history.

Apprentice to chef

Mangan now has restaurants in Sydney, Tokyo and San Francisco with wine bars, which cater for a different spending demographic, and he has products on the shelf selling in places such as David Jones. He has books, a consultancy and a thriving public speaking/cooking business. He now also has a relationship with Virgin airline in both Australia and the USA.

His first business was the legendary Salt restaurant, started in 1999 after 14 years of cooking for others.
“I just wanted to have a go for myself,” he recalls. “I was quite confident and borrowed a lot from the bank to start it.”

He remembers how the media supported his venture, with Salt meant to be a mix between keeping it casual, with an element of fine dining.

“I think fine dining really has its place and some icon restaurants do it so well,” he says. “But at Salt we wanted to do it differently.”

This point of difference was the making of a lucky break when diners from the Port Japan Partners organization, which was building up a stable of 20 or so marque restaurants worldwide, asked if he was interested in selling half his brand to them.

“They said they had been to some of the best restaurants in Sydney, and that they had eaten at Salt and wanted to partner with me in Sydney and Tokyo,” he explains. “I was knocked out but I remembered the night they referred to and it was a great night at the restaurant.”
Since then Salt has become the name of Tokyo establishment while in Sydney, Mangan’s flagship is Glass which is ensconced in the new Hilton Hotel.

“I have learnt that while some restaurants can go on forever, most only have a life of about four to six years before they have to be re-invented or refreshed,” he advises. “The move to the Hilton has been a dream. This is not a hotel restaurant but my restaurant in a hotel.”

Customer respect

Explaining his rise to prominence he cites the quality of his food, but he doesn’t claim to be the best chef in town. He has a healthy respect for his customers and he rams this home to his staff.

“If a guy comes in and wants a steak well-done and with a fried egg on it, he can have it,” he insists. “If I have got the ingredients then I should make it. I am not precious about those sorts of things.”

Reflecting on his rise to fame, he concedes he was very much in tune with the needs of the media when he started. While he still tries to deliver now, demands on his time make it relatively harder. He says media support was important but that does not come without planning.

He says networking has also been critically important to his business. He has worked with business partners and they have both helped and hindered his business aspirations.

Downturn effects

Asked how changing lifestyle patterns of customers and the global financial crisis has affected his business, he thinks being in the USA actually helped him deal with the economic challenges both in Tokyo and here.

“America was the first to go into the recession and we were hit pretty hard because South in San Francisco was an upmarket restaurant with a wine bar,” he points out. “But we’re near the city’s baseball park so we introduced an Aussie-style happy hour and attracted the baseball crowd with a more casual menu and specials.”

The challenges were quite steep in Japan as well.

“We had the Citigroup building above us and when they laid off a thousand workers, we really felt that,” he says. “Japan was down 20 per cent overall and it was a big hit but the greater reliance on the wine bar with more casual dining helped.”

Mangan says the USA and Japan experiences were softened because the wage cost is not as great in those countries compared to here. However, the Aussie story, like the economy, is not so bad.

The master chef thinks the unofficial recession here and the real ones overseas taught him a business master class module.

“I have learnt so much from this global recession,” he insists. “I reckon if you can get through this time, you will be more savvy when the better times roll in.”

He was asked if he had thought about following the new patron demands for café dining and breakfasts?

“Cafes are a labour-intensive, low profit business and I take my hat off to the people who can do it well,” he says. “And when it comes to breakfasts, I would dread the 4am phone call from a drunken chef who was not going to make it into work.”

On the future, it will be more of the same — hard work and coming up with great ideas, and of course a new book is on the way. When faced with challenges, Luke Mangan knows the value of an innovative option — it’s been working for him since he was 15 years of age.

By Peter Switzer

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