Podcast: Walter Butler of Butler Industries analyses strategic investment in luxury
Walter Butler, the businessman who founded investment firm Butler Industries in 1991, is a serial investor in the international art-of-living, tourism and luxury sectors. In spring, he acquired Parisian restaurant L'Ambroisie, a triple-Michelin-starred haven for the French capital's gourmets and one of his latest coups. In the new episode of the LuxurynsightXFashionNetwork podcast series, the French-American-Brazilian entrepreneur talked about his career with Godfrey Deeny, global editor-in-chief of FashionNetwork.com.
Butler was born in Rio de Janeiro (Brazil), and moved to France in the 1960s following his parents’ divorce. After graduating from the prestigious ENA civil service school in 1983, he worked at France’s General Inspectorate of Finance for three years, and later joined the office of François Léotard, then Minister of Culture and Communication, as an advisor.
“At the time, we were working on the privatisation of TF1, Europe’s largest TV channel,” said Butler. “I loved that period, it was an exposure to the media industry, which was just beginning to become important [in Europe],” he added.
After a stint at New York investment bank Goldman Sachs, where he discovered the world of venture capital, in 1991 he founded the Butler Capital Partners (BCP) investment fund, the subsidiary of his eponymous group, Butler Industries, that specialises in asset management.
Mentored by François Pinault, Butler began, with the BDDP advertising group, which he bought in 1993, his career as buyer of struggling companies, becoming a turnaround expert. Among the highlights of this period were acquiring a stake in Corsican shipping company SNCM in 2005, buying PSG with Colony Capital in 2006, and becoming a majority shareholder, with a 74% stake, in the Virgin Megastore chain (buying up the shares owned by the Lagardère group).
Focus on French cuisine gems
Aiming for “strategic diversification,” Butler shifted his investment choices towards the lifestyle sector. In 2004, he rejuvenated the Flo group, which owns some 50 bistros, including Parisian restaurants La Coupole and Bofinger; in 2018, Butler acquired the Paradis Latin - a famous cabaret set up by Napoleon Bonaparte in the 19th century - and three years later, he acquired the premium patisserie chain founded by celebrity pastry chef Pierre Hermé. They are all icons of French art-of-living and luxury, “known all over the world” and “very profitable,” according to Butler.
His most recent acquisition in the upmarket restaurant sector is uber-chic L'Ambroisie, located on place des Vosges in central Paris. An elegant 35-table establishment that Butler bought in May from its owner, chef Bernard Pacaud, who is still holding sway in the kitchen.
“It’s one of the best restaurants in the world, [...] It’s French cuisine at its best, very pure, with very good ingredients,” said Butler. “The idea there is not to create a brand but maybe to set up another L'Ambroisie in Japan, probably in Tokyo, then open a similar but more affordable restaurant, like a quality brasserie, in France and Japan,” said Butler, who believes that replicating winning ideas is a strategic factor of success.
Butler is prudent about artificial intelligence, and said that “data is better utilised to manage assets than to make investment decisions.” He said that “one of the reasons the Paradis Latin’s revenue has quadrupled in recent years is the smart way we use our customer data. Giving customers a very good first experience enables us to have a 25% return rate.”
For young entrepreneurs wishing to become investors, Butler’s advice is above all to “know if there is really a market, and know the potential competitors.” He added that they should not be afraid of “starting small and growing gradually,” like Alsatian pastry chef “Pierre Hermé, who launched his brand on his own 25 years ago,” and who is now in charge of a giant growing at a 15% rate and generating a revenue of over €100 million.
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