We could have sold our award-winning Liverpool restaurant Lunya for millions, instead we gifted it away

LiverpoolWorld’s sister title the Insider spoke to Peter Kinsella, now in his 60s, whose popular Catalonian restaurant started as an idea in his university days

Peter and Elaine Kinsella first opened their Catalonian restaurant Lunya on Liverpool’s College Lane in 2010, which soon moved to a larger premises on the same street. It was soon followed by a site in Manchester’s Deansgate in 2015, and Lunyalita on the Royal Albert Dock in 2018.

Peter , who is now in his 60s, told Insider about how the idea harks back as far as his university days, but it was put on hold when his career as a management consultant in health and social care services took off.

"I had my own consultancy. We had a large number of staff. We worked all over the world really.

"And that took me to Barcelona back in the late 90s.

"It was the first time I'd been in Spain working for the Catalan government and a charity over there. They took me out to lunch and that reignited this idea and planted a seed that if I ever did try and make a living out of cooking, it would definitely be a Catalan inspired eatery.”

Peter, in his mid-thirties at the time, said it went “on the back burner” due to his consultancy business.

"But it kept eating away at me. And I decided, five years later, I had to give it a go. I always had this belief that you couldn’t be a consultant all your life. You’d run out of juice, you’d get stale."

What followed was research, as well as "loads" of trips to Spain and then Peter and Elaine would trial Lunya at food festivals which were popular at the time, such as the Wirral Food Festival.

"I was still doing my other job, so I needed to make sure. Although I had no background or experience in this industry, I knew enough about general business management to know that it’s no use just having a good idea - that idea needs to be wanted and valued by other people, and you need to really market test it.

"You forget how few restaurants there were [back then] and what an absence of eating-out culture we had. It was the [Liverpool] Capital of Culture year in which really a lot of places opened and flourished, and it’s never looked back since,” he said.

"Anything we could find we gave a go. Each festival proved more popular than the next. We'd sell out. We were a really popular store. We were chatting to people, seeing if they fancy the Spanish restaurant in Liverpool.”

Two years later, a site opened up on College Lane in Liverpool One, and Peter and Elaine decided to move in.

"Even though there was a lot of planning, it was a rush moment madness because we ended up taking a huge and incredibly expensive site, which statistically shouldn’t have worked.”

"But it did. We survived and it flourished."

The gamble also involved betting on Liverpool One, which opened in 2008, to achieve the popularity and footfall that could sustain the site.

Peter said: "It felt like the whole locus of the city centre was going to change dramatically with Liverpool One. So we took this punt.

"It was a gamble at the time that Liverpool One would become dominant in the city centre. If we were going to be anywhere, we’d have to be in the city centre with a high footfall. And somewhere where there were enough people who would be interested in buying what we had to offer. The city centre felt like the right place.

"We knew we just had to take that gamble. I didn't have the luxury of starting small and then learning the craft and then finding another site."

Soon Lunya relocated just up the road to a site on the end of College Lane, where it remains today.

In 2015, Peter and Elaine opened Lunya in Deansgate in Manchester, and later Lunyalita on the Royal Albert Dock. However, when lockdown hit, they were forced to make the decision to close the former.

"We had three sites at the time," Peter said, "And we knew as soon as we were in lockdown, the world wasn’t going to get back to normal when it ended.

"We knew we'd have three restaurants all losing money for a good while and we knew that if we persisted at that, within four weeks the business would collapse.

"We knew we could just about succeed with two businesses for a year."

The decision to not reopen Deansgate came down to the sites’ landlords, and the "unsupportive landlord" in Manchester versus the landlords at the two Liverpool sites who supported Lunya with things such as rent concessions.

"We also had this idea that Manchester would be hit worse because its biggest strength was its huge business district. It was pretty obvious when people were working from home that Manchester’s trade was going to be hit massively."

Yet, lockdown was not only negative for Lunya, as the lack of international travel led to the boom in ‘stay-cationing’, who opted to spend local rather than in places like Spain.

"We gained hugely from that at that stage. We now had this great upturn, in domestic tourism, international tourists have come back and Liverpool is doing really well in that regard in terms of its service to our economy." Peter said.

Despite the success, the question of retirement started to become a reality. In 2021 Elaine was diagnosed with multiple myeloma and had to reduce the amount of work she could do for Lunya. And Peter himself said his average work week at Lunya is around 60 to 70hours.

"When Elaine got poorly and we were both approaching 60, we knew we had to think about retirement at some point. Retirement in general is never a staff decision, but when you have a business as well, you’ve really got to plan long term to exit."

"After lockdown, when Elaine got diagnosed, we really started to think, ‘well, look, we can’t keep on working forever. We’ve got to grab the moment really and try and find some time to enjoy life as well as enjoy the business.

"It’s fantastic, but it’s time consuming. We’re open every day. We’re open from early in the morning till late at night."

So the pair started to think about dipping their toe in the water with a trade sale - in the region of £3m - but they were hesitant.

Peter explains: "The thing which always worried us about a potential private sale, was we’ve always known that as a business we could make a lot more money than we do. We do what we want because this is the type of business that we want."

"We know that if we wanted, we could make more money by getting rid of the deli, by buying inferior products, and by employing fewer staff. We could make another £300,000 a year quite easily doing that.

"But we don't want to, that's not the sort of business we want. And I always thought that a private buyer was likely to realize that and see us as a bargain and introduce those cuts really quickly.

It was a Lunya regular and partner at Brabners who first floated the idea of an EOT (employee owned trust), and “the more we heard about it, the more we liked about it”, Peter said.

In October, Lunya announced it had become an employee owned trust, in effect, gifting the company to its employees.

The deal allowed Peter and Elaine to receive a fair value for the business and they now have an IOU of future profits up to the value of the independent valuation.

"It gave us an exit plan, which was really important, but also I think solidified the type of business we were. Because we knew we had a really great supportive and - for our industry - longstanding team who loved the type of business we were, liked what we were doing and would want to carry that on.

"So our deli's in safe hands, because delis are really tough, they're not very profitable, if at all. we know the space that the deli occupies, if that was a coffee lounge area or more of a bar area, it would make a lot more money, but it would destroy our profile and the business we are really [reliant on it|].

"It's because we have the deli, we have the most fantastic menu because we can use ingredients across both.

"And we've got people who've been with us for, you know, all 15 years of us being open, which is really unusual in this industry. It's a great way to be able to reward them."

In terms of a final exit, Peter said he has set himself three years to go from working “very full time to more part time”. Then from years four to seven of the transition, down to around 20 hours a week, helping to mentor those who will be doing his job upon their final exit.

When he talks about the exit, Peter has his children on his mind - not only he and Elaine’s real children and grandkids, but their Lunya too.

He says: "It's become such a part of our lives. It's not like just turning a switch off and saying well that's it, we're done.

“It's a bit like having children. Your children don’t stop being your children when they grow into adults, you never stop loving them and caring for them and supporting them, and that's a bit like a business.”