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South Africa, Consumer
Before 2009, entertainment options for hip young professionals in Mexico City were limited to large, crowded, and expensive clubs that delivered a single, formulaic experience. Today, trendsetters can be found scattered across a series of cutting-edge “islands” – venues distinct in concept but united by the creative vision of Grupo Archipiélago. Grupo Archipiélago offers unique, alternative experiences across a portfolio of restaurants and bars.
Through its consistent success, Grupo Archipiélago has built strong brand equity and a loyal customer base. After the company more than doubled its sales and net income by expanding into restaurants, it has become focused on expanding within the restaurant category. While new bars enhance the company’s creative brand equity and provide high short-term revenues, restaurants enjoy longer operating lifetimes and more sustainable cash flows. The benefits to such a diverse portfolio include opportunities for business synergy. The team uses its bars to build the brand of its specialty liquor, “Unión Mezcal,” locates restaurants and bars near one another in target neighborhoods, and exchanges best practices across venues.
Today, Grupo Archipiélago entertains over 250,000 people a year across nine venues. The team plans to double sales and achieve industry-leading margins across all of its bars and restaurants. In addition, eight planned new locations will add even more choices to the growing menu of entertainment options in Mexico City. Grupo Archipiélago has been profitable since its first year and new venues typically break even in their first month of operation.
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