Pret's global bid eats into profits

It brought such exotic fare as Tandoori chicken with Vietnamese pickle to a grateful British public.

Before Pret A Manger launched its distinctive metal and maroon shops in 1986, office workers were lucky to find anything more ambitious than tuna mayonnaise in the limp and often stale offerings that passed as sandwiches.

Now the shops are a familiar high street presence after reinventing the sandwich in the country of its birth.

But an over-ambitious plan to take the concept to New York has taken the once highly-profitable firm deep into the red, the Evening Standard can reveal.

The company made its biggest loss of more than £20million last year following its expansion in Manhattan, Hong Kong and Tokyo.

The 2002 results, just filed at Companies House, show plans "to replicate the success the business has enjoyed in the UK" overseas went horribly wrong. Poor locations and high costs squandered millions of pounds.

Of the 22 stores opened in Manhattan, seven have now been closed and Pret has also been forced to close outlets and lay off staff in Britain.

It was the very success of Pret - founded in 1986 by ex-college friends Julian Metcalfe and Sinclair Beecham and adopting the slogan "passionate about food" - that led to numerous imitators such as fast-growing rival Benjys.

Pret's 2002 losses follow a £6.7 million deficit in 2001, when the company first started investing overseas. But in 1999 it made a £4 million profit.

The mounting deficit triggered the biggest crisis in the company's history. In March, two executives brought in by the founders to run Pret were ousted in a boardroom coup.

Mr Metcalfe, who with Mr Beecham, still owns a controlling stake in the business, said today that with hindsight the overseas expansion had been "far too bullish". He added: "The opportunities for Pret in the UK are still incredible. I was unhappy that we were planning to open in China when we were still not in places like Wimbledon, Bromley and Kingston."

Profits in Britain halved from £3.6 million to £1.8million last year, while the New York outlets recorded a £5million loss. The five Hong Kong Prets were £2.4 million in the red.

Mr Metcalfe said he now planned a new, softer look. Eating in some of the metallic interiors was "like sitting inside a washing machine", he said.