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Wed 1st Aug 2012 - M&B, Glendola and JW Lees

Story of the day:

Collyer – search for M&B chief executive “maybe going back to close to square one”: Deutsche Bank leisure analyst Geof Collyer has argued that the £100m sale of Novus to LGV Capital and Hutton Collins might have put the Mitchells & Butlers (M&B) search for a chief executive back to nearly square one. He said: “Novus chief executive Steve Richards is widely believed to have been M&B’s number one choice to become its next chief executive. M&B chairman Bob Ivell – who used to work with Steve Richards at S&N Retail – has talked about having found the right person but the timing of being able to actually recruit was out of his hands, presumably because of the Novus sale proceedings. Had these fallen through, we believe that the probability of Steve Richards going to M&B would have increased significantly, but now we would see M&B’s search for a new chief executive maybe going back to close to square one. In M&B’s recent (third quarter results announcement), the text relating to the chief executive recruitment process was altered to remove any hint of progress, possibly anticipating this news. The text of the sale statement would suggest that Richards is likely to be staying at Novus for a few years, so not going to M&B. John Kelly, the leisure industry veteran is also staying on as chairman. We have never seen Steve Richards as a potential M&B successor in the near term as private equity would not be buying Novus (£100m cost) without locking the senior management who have transformed the old First Leisure bars business (previously called Urbium) into the thriving operation it is today. Similarly, we would have thought that Steve Richards would want (and need) to stay with the new owners to collect any financial incentives due, having run the business since May 2005, and overseen a take-private in September that year, and increased EBITDA by around 50 per cent over the same period.” 

Industry news:

Hotels in London slash prices: Hotels in London have been forced to slash their prices amid businessmen and tourists staying away from the city. Many hotel bedrooms are now cheaper than they were this time last year. Lastminute.com reports that the average room in London booked on a last minute deal is £112 a night compared to £133 last year. The Earl of Bradford, who owns Porters restaurant in Covent Garden report takings at his Covent Garden restaurant are “disastrous”.

Hotel company accused by OFT of price-fixing: Intercontinental, the world’s largest hotel group, has been accused of price-fixing by the Office of Fair Trading. The company was accused of preventing consumers from shopping around for deals by allegedly hatching a deal with Expedia and Booking.com to sell discounted rooms not available to rival websites.

Alcohol makes us feel attractive: French researchers have found that alcohol makes us think we are more attractive than we are. The research found that the more their subjects drank the higher they rated their attractiveness. This outcome was even observed when subjects were told they were drinking alcohol.

Family finances suffer a lost decade: Families have the same amount of disposable income they had a decade ago. The average Briton had a disposable income of £3,620 for the first three months of the year – the same figure, adjusted for inflation, as 2003.

Company news:

Rainforest Café operator – London trade down 15 per cent during the Olympics: Glendola Leisure has reported a dramatic fall in trade at its central London sites since the start of the Olympic Games. Managing director Alex Salussolia said takings had fallen by up to 15 per cent at five of its prime sites, which include the Rainforest Café and Waxy O’Connor’s. Salussolia said the drop in trade could rise to 30 per cent as more people choose to stay out of central London as the Games progress. He said: “I feared it would be this bad. Even at sites that we thought would benefit, it hasn’t proved to be the case.” He said the venues were noticeably quieter on Friday night’s opening ceremony and that trade at The Cricketers in Cobham, Surrey was severely affected by road closures during the road races. “It’s a simple dynamic – more people have left London or not come into the City and West End because of the travelling difficulties than tourists coming in and tourists have a different spending profile.” Salussolia said other businesses in the area were in a similar situation because trade always fell at major events in London like the Queen’s Jubilee. He reported sites located outside of London in the 19-strong estate were trading well, but that the drop in sales in London had depressed July’s revenue by around three per cent.

Collyer – Enterprise Inns likely to have made progress toward achieving flat sales: Deutsche Bank leisure analyst Geof Collyer says he expects Enterprise Inns to have made further progress towards flatter like-for-like income when it reports its third quarter results on 9 August. He said: “We are expecting the company to update on further progress towards a flatter like-for-like net income position. In the first half of 2012, this was -1.6 per cent (versus -5.0 per cent in the first half of 2011). Given the volatility in the weather, the difference in timing of holidays, national celebrations, various sporting tournaments, the pattern of trading this year has been tough to predict. The overall position at the end of the first half could be summarised as follows: Despite a 16 per cent increase in absolute levels of beer discount on an estate that had shrunk by six per cent, beer sales per pub were up around +1 per cent. Rent per pub was broadly flat, with nearly all of the rent rebasing now completed. Although the regions have been marginally re-jigged, substantive net income in the north was flat, (from down last year) whilst the midlands region is now in growth (from flat). The south remains in growth. By the first half stage, disposal proceeds so far had reached £89m. There have been plenty of minor announcements in the trade press suggesting that the top-end site programme has continued apace, whilst the auction rooms have been busy with packages of ETI’s bottom-end sites. This suggests that our £200m target for the full year looks fine.”

Innventure recruits high-flying Singapore couple: Innventure, the six-strong multiple headed by former Mitchells & Butlers executive Chris Gerard, has recruited a high-flying couple from Singapore, Nick and Alyson Hancock, to run its Rusty Gun venue in St Ippolyts, Hertfordshire. Nick ran what is reckoned to be the highest nightclub in the world – the New Asia, which is on the 71st floor of a skyscraper on Singapore island. Alyson said: “On a clear day, you could see Indonesia and Malaysia in the distance.” While Nick worked hundreds of feet above ground, Alyson ran a fine dining restaurant closer to terra firma. Prior to Singapore, the couple worked in Dubai where Alyson was the manager of a Jamie’s Italian restaurant and Nick was a director with a company that operated nightclubs and restaurants.

Sports Direct buys Worksop hotel: Clothing retailer Sports Direct is understood to have acquired the 46-bedroom Lion Hotel in Worksop, which is 11 miles from its headquarters in Shirebrook, Nottinghamshire. Sports Direct is understood to use the hotel extensively to accommodate staff.

Greene King starts Isle of Wight hotel clear-up: Greene King has begun the operation to clear debris and demolish badly damaged parts of the fire-hit Hotel Ryde Castle, which was destroyed in a fire in March. A spokesperson for Greene King said: “We have started the process of demolishing damaged areas and clearing the debris. A scaffold has been installed around the building to enable a temporary roof to be fitted over the damaged section of the hotel, which has been left without cover. We expect these stages to be finished within the next couple of weeks. Once this is complete the next steps will be to carry out surveys of the building, including a historical survey, and to liaise with the Isle of Wight Council to secure planning permission to sympathetically reinstate the listed building.”

Mitchells & Butlers hires digital strategy agency: Managed operator Mitchells & Butlers has hired specialist digital strategy agency Underwired. The agency has been engaged to help the company develop its digital customer engagement and data strategy. Paul Madden, head of digital at Mitchells & Butlers, said: “The digital channel continues to grow in importance to our customers and we are constantly looking at new ways to improve our online services and the levels of personalisation we can provide.”

Corney & Barrow launches Cabin concept: Corney and Barrow launched its new Cabin concept featuring the first ever self-service wine machine to be installed at a major train station. The venue offers a British tapas menu that can be enjoyed with Martini cocktails, exclusive ales – including Harviestoun ‘Ola Dubh’ Special 12 Reserve – and wines by Corney & Barrow wine merchants, who hold two royal warrants importing some of the world’s most exclusive wines. Customers running for a train can enjoy Cabin’s take-out coffee, muffins, wine and made-to-order picnic hampers, featuring cured meats, speciality cheeses and freshly baked bread. Lucy Knowles, managing director of Corney & Barrow comments: “It is our mission to put the romance back into travel. We’ve created an original, elegant, sanctuary which will be first class, however you’re travelling. Featuring two live departure boards, we want Cabin to be the start of an exciting journey. Having thought long and hard about what customers want, we know queuing isn’t it, hence our introduction of the self-service wine machine, which will work like a pre-paid Oyster card system.”

Brew Cafe to open in San Francisco and Wimbledon: Brew Café, the concept inspired by the cafés of Melbourne, Australia and which is known for its signature egg dishes and all-day breakfasts, is to open new sites in Wimbledon and San Francisco. The concept has one UK site in Clapham but also venues in New York and San Francisco. 

For Your Eyes Only losses narrow: For Your Eyes Only, the company headed by Glen Nicie that operates lap-dancing clubs in London, Bournemouth, Southampton, Cardiff and Newcastle, made a loss before tax of £263,000 in the year to 31 October 2011 on turnover of £6,068,703. It lost £536,781 on turnover of £6,781,643 the year before. The company, which is 80 per cent owned by members of the Ladhar family, reported Ebitda of £879,636 for the year, up from £798,413 for the year before. The company has an excess of total liabilities over total assets of £1,430,853.

JW Lees buys two Spirit leased pubs: Family regional brewer JW Lees has followed Thwaites in buying two pubs from the Spirit leased estate. William Lees-Jones said: “(We are) delighted to have purchased The Rope & Anchor, Eccles and The Blue Bell, Woolston from Spirit and looks forward to working with the lessees to take the pubs forward. (We also have) finance in place to fund more high quality freehold acquisitions in the North West.”

Slug & Lettuce brand sponsors Sandown music night: Stonegate Pub Company’s Slug and Lettuce brand has sponsored one of the biggest race nights in Sandown Park’s calendar. The Music Night, which features Jessie J will be held on Thursday 9 August and will be named The Jessie J Music Night sponsored by Slug and Lettuce. The deal, which is one of the first commercial sponsorships by the Slug and Lettuce, sees the brand take naming rights to the whole event as well as race card branding. The bar group also secured the naming rights to The Diamond Edge Bar at The Racecourse on all three music nights held at Sandown Park. Slug and Lettuce will be giving its customers the opportunity to win tickets to the race night by hosting charity horse race nights in six of its bars close to Sandown Park - Epsom, Weybridge, Putney, Staines, Kingston-upon-Thames and Richmond-upon-Thames – all in aid of Help for Heroes. Over the course of the next two weeks, the selected Slug and Lettuce bars will be showing eight pre-recorded horse races on their screens and customers will be able to bet on the horses of their choice, with eight lucky customers on each night winning a pair of tickets to the Jessie J live event.

Contemporary Mexican to open in Shoreditch: A contemporary Mexican restaurant – Death By Burrito - is to be opened in Shoreditch this September by Rebel Dining Society. The venue will feature experimental cocktails and a street-food menu featuring burritos, tacos and small bites. Rebel Dining Society aims to “push the boundaries of fine dining” with a focus on “new culinary ideas, interactive art concepts and live performances”.

Punch Taverns to launch Champs sports bar concept this weekend: Punch Taverns will launch its Champs sports bar concept this Saturday in Sheffield’s Ecclesall Road in partnership with local multi-site retailer Danny Grayson, who runs two other Punch pubs. The company has bought the rights to the Champs name from Thornbridge Brewery, which operated the much-loved Champs sports bar 200 yards away until redeveloping it. Champs, which is famous for its American style burgers and grills, features a new affordable menu which also includes ribs, wings and steaks as well as classic desserts like key lime pie and knicker bocker glory. The new site, formerly the Pimona, will feature a full size competition-spec motorbike and around 30 plasma TVs, which will screen all types of sports. Some of these screens will be outside in the all-new beer garden complete with Astro turf - ideal for watching summer sports. Punch regional operations manager Richard Woodward said: “There’s been a huge interest on Facebook and Twitter. We’re focused on launching this site and then we’ll looking at moving the concept to other sites.”

Ooberstock unveils new listings: Ooberstock, the new ‘intelligent wholesale’ business, has announced new listings from some of the world’s biggest spirits companies, in the firm’s latest step towards revolutionising drinks distribution. Spirits brands from Pernod Ricard, Bacardi Brown Forman Brands, First Drinks Brands, Maxxium UK, Global Brands, Whyte & Mackay and Oval Vodka will be available through Ooberstock from August 2012. The new offering is a significant development for the company which now lists an extensive range of spirits, beers, craft ales, soft drinks and wine. Arran Heal, managing director of Ooberstock, said: “Spirits are an important, high profit-margin product for our customers so we are delighted to be offering an extensive range from some of the industry’s major players in this arena.”

Giraffe extends kids’ meal deals into weekends: Restaurant brand Giraffe has extended kids’ meals deals into the weekends. Giraffe co-founder Juliette Joffe told Marketing Week: “We’ve tweaked a few things to make Giraffe more attractive. Our kids’ meal deal only used to run Monday to Friday and we are now incorporating it into weekends. At places like The Trafford Centre in Manchester, every other restaurant has a kids’ meal deal at the weekend. And if we want to attract those families, we have to compete with that.”

Wetherspoon not at fault for customer’s actions: JD Wetherspoon has seen a case brought against it by a customer who took action under the Occupier’s Liability Act 1957 dismissed. A customer called Mrs Geary had been at a Wetherspoon pub in Newcastle with her work colleagues when, inspired by a scene from the film Mary Poppins, she decided to slide down the banisters on a grand open staircase. She fell over the side of the staircase and onto a marble floor below, sustaining a fracture to her spine that has resulted in tetraplegia. Mrs Geary sued Wetherspoons for not taking steps to prevent such an incident from occurring and argued that the accident was entirely foreseeable. The court dismissed her claim following an admission from Mrs Geary that she knew that what she was doing carried an obvious risk, but such an activity would not have been allowed by the pub, and that she had chosen to take the risk.

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