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Last Updated: Friday, 17 December 2004, 14:14 GMT
The bagel king
Steven King - 'King of the bagels'

The bagel traces its history back to Eastern Europe in the 18th century.

But until recently your best bet to see bagels being baked, displayed and bought in their full glory would have been to catch a flight to New York.

Now US style bagel bars are springing up across the UK.

King of the bagels

London bagel baron, Steven King - 'King of the bagels' - is opening his eighth store.

It's in the shopping centre at the heart of the Canary Wharf office complex in London's docklands.

Strangely, it's other businesses getting the jitters about expanding which has given him the opportunity.

"They are predicting a downturn in the economy next year," says Steven.

"Some companies have moved out of prime locations which before we would have been unable to afford," adds Steven.

Success or failure will depend on how many bagels leave the premises in the hands of bagel lovers.

Salmon and cream cheese

So which are Oi Bagel's top-selling products?

Number one is smoked salmon and cream cheese.

Followed closely by the pastrami and Swiss bagel, and with the turkey and bacon club coming in third place.

Seems simple, but there's a lot of money riding on these lumps of dough.

Steve has a 1m worth of backing from investors and the plan is to expand to 25 bagel bars within three years.

That will give the backers something tasty to say they own.

Steve's challenge is to deliver what they've ordered

Student Guide

Oi Bagel sells its products from High Street shops where there are lots of people passing.

A new shop employs six people, makes bagels in 60 seconds and takes orders for office lunches.

It already has a turnover of 3m and wants to grow.

It has just found a new location at Canary Wharf in London's Docklands.

Just think...

A turnover of 3 million sounds great but what more information do you need before you know if it really is great?

Why do you think Oi Bagel wants to grow?

What factors must it investigate before it opens a new store?

Making the decision

  • Raising finance

    Many businesses borrow money when they want to expand.

    Oi Bagel has been looking for people who wanted to invest for a while, and finally a group of private investors has come forward.

    Just think...

    If a business is borrowing money to expand, what must it consider before it goes ahead?

    Some people want a share of the business. What are the advantages and disadvantages of increasing the number of shareholders?

  • The right place at the right price

    Oi Bagel's investors know all about the retail market and are convinced that the economy will weaken next year.

    This means that people will have less to spend so shops won't do so well and some shops will end up closing down.

    Oi Bagel can then pick up some prime sites in high streets and shopping centres.

    The rent hasn't fallen in Canary Wharf.

    There are so many people about that it is always a popular location for retailers. It's very near Dixons and Carphone Warehouse.

    They are both businesses which rely on lots of customers.

    Oi Bagel asked a company called 'Footfall' to work out how many people passed the shop before the investors decided to go ahead.

    They use a special device to count the passers by.

    Just think...

    Why do people have less to spend when the economy weakens?

    Why is the amount of rent paid for a shop important to a business?

    Why are rents likely to be high in places where there are lots of potential customers?

    Why is counting the passers by a useful way of judging whether a shop is likely to be successful? Think of some factors that you should take into account before you go ahead.

    Counting the returns

    Oi Bagel expects a shop to repay the initial investment in two years so it has to be a success from the start.

    It costs between 160,000 and 200,000 to set up a new shop so is expects to cover between 80,000 and 100,000 each year before it starts contributing anything to the business.

    Just think...

    If you were an investor, what information would you want to have before you put your money into the business?


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