A great crisis also creates great opportunity, so El Segundo-based airport concession investor and operator Greg Plummer took his chance last year when he engineered the biggest ever acquisition by a minority-owned business of a large food concession operation at a major U.S. airport.
The deal netted Plummer and his partners at Concord Collective Partners eight separate food concessions at Los Angeles International Airport, and since then he has continued to expand. He has opened a proprietary concept called Betcha Burgers, and last week marked the soft opening of a Wetzel’s Pretzel location, all at LAX.
Starting in 2017, Plummer, a one-time concession manager at LAX Los Angeles International Airport, had run Enjoy Repeat, a certified Airport Concessions Disadvantaged Business Enterprise that had gradually acquired 25% ownership stakes in eight eateries at LAX operated by London-based airport concessions giant SSP Group. The eateries were mostly in Terminal 1 and included brand names such as Chick-fil-A, Panda Express, Einstein’s Bagels and Peet’s Coffee.
Things might have stayed that way for years, but then came the Covid-19 pandemic. Suddenly, as global aviation came nearly to a halt, the eight eateries that Plummer operated were forced to shut down – initially a disaster for Plummer and the 100-plus employees under his management.
But then came the opportunity. The pandemic had slammed SSP Group and its U.S. operations hard. For the fiscal year ending in September 2020, SSP’s revenue plunged 49%, then another 42% for the year ending in September 2021 to the equivalent of $1.1 billion. For those two years combined, SSP posted operating losses totaling about $860 million and as of Sept. 30 of last year had racked up nearly $2 billion in debt, all according to an annual company filing.
With these mounting losses and debts, SSP was forced to divest operations it judged as destined to underperform, including the eight eateries at LAX. SSP still had time left on its leases at LAX but decided to exit those leases early.
“I learned in mid-2020 that SSP was looking to sell and so at that point I spoke up and said, ‘If you’re going to sell, can I have the opportunity to buy it instead of (you) going to a third party?’” Plummer said.
SSP agreed and so did the main retail developer and leasing manager at LAX, URW Airports, a division of Paris-based Unibail-Rodamco-Westfield.
“We have a strong interest in seeing local principals who are (minority and women business enterprise) owners be directly involved at the airport and this was a way to do this on a major scale,” said Mike Salzman, executive vice president and group director for URW Airports.
Making the deal
But even with the agreement of SSP and URW, it took nearly a year to make the deal a reality. For starters, Plummer’s Enjoy Repeat didn’t have the capital.
So he decided to take on five equity partner companies. In an interview with the Business Journal, he declined to name those partner companies and would only say the amount they invested “was in the seven figures.” This new combined entity formed last April with a new name: Concord Collective Partners.
SSP also offered to sell its majority stake at a discount and then URW agreed to a “temporary lease abatement” for Concord Collective, according to Salzman. And, Salzman said, URW agreed to throw in some tenant improvements.
Neither Plummer nor Salzman would disclose how much Concord Collective Partner ultimately paid for the SSP concessions. SSP did note in its annual report filing for fiscal year 2021 that its North American “site exit costs” totaled 9 million pounds, or about $12.2 million.
When the deal closed in April 2021, it was viewed as a major milestone for certified minority business enterprises in the airport retail market.
“This is very significant,” said Andrew Weddig, executive director of the Airport Restaurant and Retail Association, a Chicago-based trade organization. “There’s not much, if any, precedence on this scale with a certified minority-owned business taking that large of a piece of a food and beverage business at a major airport.”
The deal was also welcomed by officials at Los Angeles World Airports, the city agency that runs LAX.
“At Los Angeles World Airports we’re focused on creating more opportunities for small, local and disadvantaged businesses,” Justin Erbacci, LAWA’s chief executive, said in a statement. “Greg Plummer is a model for how we want to see our ACDBEs build their businesses at LAX and become prime concessioners – and help to bring in and mentor more ACDBEs.”
New concept eateries
For Plummer, this new status is a long way from his career beginnings as a line manager at a single concession eatery operated by CMS Hospitality at LAX back in 2005. Eleven years later, CMS was bought by concession giant HMSHost Corp. of Bethesda, Md. That’s when Plummer left and formed Enjoy Repeat.
With his own company, Plummer sought to carry out his vision of becoming a major concession operator at LAX, with a mix of national brands and his own eatery concepts. Rather than bid on prime concession contracts, Plummer chose to acquire minority stakes in concessions held by prime contractors. That’s how he teamed up with SSP’s eight eateries at LAX, raising the capital necessary for the minority stakes from a “non-traditional lender focused on airport projects.”
As a minority stakeholder with SSP, Plummer said his role was to develop brand relationships and innovate new dining concepts. That’s when he came up with a proprietary dining concept called Betcha Burger, which he said was inspired by independent roadside burger stands that dotted the landscape several decades ago.
Since becoming a prime concession operator, Plummer has continued to innovate new dining concepts, having recently opened an eatery called Ace Cervecería & Tacos. (Cerveceria is Spanish for brewery.) And he has continued to open brand eateries, including a Wetzel’s Pretzels that opened earlier this month.
In a smaller scale repeat of last year, Plummer said he recently won the rights to three more airport dining establishments that had been held by another prime concession contractor that walked away early from its lease. He declined to identify the contractor or the eateries.
“This is a culmination of what I’ve always wanted to do ever since I started working at LAX in 2005,” Plummer said.
Riding recovery wave
Looking ahead, Plummer said he plans to take advantage of more such opportunities as they come up at LAX.
According to association executive Weddig, he may not have long to wait.
“They are getting in at a good time,” Weddig said of Concord Collective Partners. “During the pandemic, many concession operators issued large amounts of debt to help stay afloat.”
He said some of these concession operators may decide to sell some of their restaurants, though he said he doesn’t expect anything as big as the SSP sale to come up anytime soon.
All this is bolstered by rising air passenger counts at LAX as air travel continues to rebound from the pandemic. That in turn means more passengers entering Concord Collective’s restaurants.
Not surprisingly, the biggest short and mid-term challenge is finding enough personnel to run the restaurants.
“We’re still working on modified hours and recruiting team members,” Plummer said. “We’re only at 75% of where we should be for hourly operations. We want to get up to a full-run level. Then we can get back to focusing on our end goal: We want to be the best eatery operator at LAX – not the biggest, but the best.”