The bakery chain Gail’s, which opened its first branch in Hampstead less than 20 years ago, is reportedly touted for sale by Goldman Sachs with a half billion pound price tag. There are 152 outlets in the UK, all of them in relatively prosperous areas, and it has ambitious plans for expansion. But Gail’s is described as ‘divisive’; its popularity with ‘well-off, middle-class customers in the London suburbs’ being its chief offence against the Zeitgeist.
These days, I mentally calibrate almost all my discretionary spending by trying to think: if I didn’t buy this, how many Gail’s cinnamon buns could I buy with the money instead?
Here is one of those stories that gets what you might call sociological cut-through. For years, the Telegraphnews pages have treated the John Lewis Christmas advert and the Marks & Spencer share price not as business stories but as matters of vital national importance, and so it is with Gail’s. The presence of a Gail’s, data experts have determined, has a strong positive correlation with both house prices and the presence of people who vote Lib Dem. Make of that what you will. I take huge encouragement from this, personally, in an age when the latte-sipping metropolitan liberal elite is blamed for everything that goes wrong, and at the same time described as out of touch and irrelevant. If Gail’s is booming at quite the rate that its valuation suggests, there may be life in us latte-sipping elites yet.
But I’m not here to talk about cultural politics. I’m here to talk about croissants. The reason Gail’s is worth having, and deserves enthusiasm rather than anti-bourgeois sneering, is that – an old-fashioned virtue in a for-profit company, I know – the product is good. Have you tasted a cinnamon bun from Gail’s? Or one of their sublime cheese straws? Or any one of their very expensive sourdough loaves? These are, at least for a high-street chain, best in class by a country mile. As Marie Kondo would say, they spark joy. I would unhesitatingly submit that the world is a better place, and thousands of people’s lives slightly but perceptibly improved every day, for their existence. And they are products that require skill, and decent ingredients, to make.
The same argument applies, I think, to Le Creuset – which was bouncing around the news pages not long ago when a half-price sale in Andover caused the whole of Hampshire’s road transport system to grind to a halt as us latte-sipping plonkers raced to acquire a matching set of orange pans on the cheap. Yes, those casserole dishes are stupidly expensive, no question. There’s a reason that I’ve acquired only two (one new, one second-hand) in my half century on the planet. But the product is good. They are both useful and beautiful and almost indestructible – and good value if you amortise their cost over a lifetime and consider the pleasure they give. (The same isn’t quite true of that other middle-class totem, the Aga; they spark joy inasmuch as they warm your kitchen and your wet socks most pleasingly, but they’re not much use when it comes to actual cooking.)
Is Gail’s overpriced? Maybe it is. I know that when I treat myself, cliché that I am, to a flat white and a cinnamon bun from Gail’s on the way back from a meeting in Muswell Hill, I’m dropping nearly eight quid. The near-equivalent in Greggs (for which I’m also an enthusiast) would be less than half that. In Costa, Starbucks or Caffè Nero the price would be there or thereabouts and the product wretchedly disappointing. But bakeries, even expensive ones, are not in the category of things which are affordable only to the senior managers of hedge-funds or, be it remembered, compulsory to buy from. In a bakery, you can spend a couple of quid extra to upgrade from the mundane to the excellent – as you cannot do in a car showroom, a clothes shop, an estate agent or a full-dress restaurant. That seems to me a bargain. Luxury in the sub-£10 bracket is the dream: it’s luxury that’s available to nearly everyone. Those who respect the price-finding powers of the invisible hand will say that Gail’s pastries cost what they cost because there are enough people, like me, willing to buy them at that price.
Also, you pays your money and you takes your choice. After all, what corporate wallies like to call ‘the retail space’ is full of insane mark-ups and pitifully bad products whose pricing reflects a branding premium rather than a premium in quality – and these are not all middle-class indulgences. The cardboardy popcorn in my local Vue starts at about £6, which must be a mark-up in the thousands of per cent. If you want to buy branded running shoes, or the latest official replica football tops from the team you support, you’re spending a fortune on entirely average tat. Think of the pleasure and satisfaction that money could give you were you to spread it out over a few weeks of visits to Gail’s. These days, I mentally calibrate almost all my discretionary spending by trying to think: if I didn’t buy this, how many Gail’s cinnamon buns could I buy with the money instead? That’s why my jeans have holes in them and my charity-shop jumpers are spackled with cinnamon sugar.
I feel confident, then, in saying that the items Gail’s sells are well priced. Is the business itself worth the £500 million – aka 15 years of adjusted profits – that Goldman Sachs thinks it’s worth? Not being an investment expert or a microeconomist, I couldn’t with any authority say. Trends in global commodity prices, energy tariffs, wage legislation, immigration policy and any number of other factors will be involved. The market, again, will do its work. But whatever it’s worth, it’s worth because of point a, which is that the product is good and that people – not just middle-class plonkers but anyone who’s prepared to spend a bit more on a day-to-day treat – can’t get enough of it. Long live Gail’s.
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