Propel Morning Briefing Mast Head CPL Learning Link Paul's Twitter Link Greene King Banner
Morning Briefing Strap Line
Thu 8th Aug 2013 - Gondola, James Horler, McDonald's and Star Pubs & Bars

Story of the day:

Star Pubs & Bars achieve 45% success rate on business rates appeals: Over a quarter of the total number of Star Pubs & Bars lessees have now benefited from successful business rates appeals. Working with commercial property specialists, Gerald Eve, the company has helped to secure reductions for 360 lessees out of its estate of 1,300 pubs. Around 400 appeals are currently outstanding, and with a success rate to date of 45%, Star Pubs & Bars estimates a further 180 of these could result in business rates being cut for lessees. Average reductions are nearly 20% of the original valuation, equating to an average saving of nearly £2,500 per year (or £17,500 for the seven year period between valuations), while a sixth of the successful appeals have resulted in business rates bills being slashed by over £10,000 a year. The biggest saving secured to date has been £30,000 a year. Charles Wilford, who heads the team at Gerald Eve, said: “Star Pubs & Bars’ success rate has been helped by the diligence of the company’s BDMs in compiling detailed and relevant information for the appeals.” The company reviews every pub in its estate twice a year with Gerald Eve to identify whether there has been a material change of circumstance that could have impacted on the site’s rateable value. This has resulted in Star Pubs & Bars lodging 170 new appeals in the last three years. Said Chris Jowsey, Star Pubs & Bars trading director: “The savings that a business rates review can achieve for lessees are substantial and can make a significant difference to a pub’s profitability. And when you add in other services and fees linked to a pub’s business rates such as Sky Sports, some water bills and the new late night levy, the real savings are even greater. The delay of the next revaluation by two years to April 2017, makes it even more important for licensees to regularly review their business rate valuations. If the same rates of success we are achieving hold true for the rest of the pub industry, then a worryingly high number of licensees are paying more than they should.”

Industry news:

Tension mounts between McDonald’s and franchisees over ‘extra’ costs and rent: There is increasing tension between McDonald’s and its franchisees in the US over rents and additional costs that have been imposed in the past five years. McDonald’s has been increasing revenue generated from franchisees with rent and royalties increasing 8% on average during the past five years, while total revenue rose 4%. According to Bloomberg, some franchisees are paying as much as 12% of sales in rent compared to a historic rate of about 8.5%. McDonald’s restaurants average about $2.5 million in annual sales, according to Chicago-based research firm Technomic, which means franchisees are paying an average of $300,000 a year, up from $212,500 at the 8.5% rate. Franchisees are also being charged an extra $10,400 per store annually for new software, Wi-Fi and employee training costs – all new fees added in the last five years. As franchisees struggle with additional company-imposed costs, there have been claims that some run-down sites aren’t getting refurbished. One franchisee told Bloomberg: “What I see going wrong is the corporation itself is forgetting that its fiscal strength rides on the fiscal strength and the creativity of the operators, and it’s just going for such centralised control.”

Quintain – 70% of Wembley Designer Outlet is let: Property developer Quintain has reported that 70% of its London Designer Outlet in Wembley is already let. It stated: “Over 70% of contracts for London Designer Outlet are now exchanged or in solicitors’ hands ahead of the opening at the end of October, with 11 new lettings agreed since the preliminary results announcement at the end of May. Fit-out of the cinema and restaurant units is taking place and preparation is underway for the October opening, ahead of the full launch in the New Year. The opening will coincide with the launch of the new ‘Wembley Park’ brand.” Meanwhile, its scheme for Greenwich Peninsula development has been granted planning consent. This design provides for 1,683 apartments, two hotels and 90,000 sq ft of shops and restaurants.

Women 1st seeks debate on more women on boards: Women 1st, the initiative that aims to increase the number of women in senior roles in hospitality, passenger transport, travel and tourism, is calling for views on whether or not the government should introduce quotas for women on boards. In 2011, a report by Lord Davies recommended all FTSE 100 companies should have 25% female representation on their boards by 2015 but recent figures suggest that the rate of appointments has slowed drastically, with female representation currently remaining at 17%. The hospitality and tourism industry faces a similar situation – women make up almost 60% of the workforce, but only around 6% of board level roles.

Company news:

Financial Times – Cinven holds preliminary talks over Gondola sale: The Financial Times has reported that private equity firm Cinven has held preliminary discussions over a sale of PizzaExpress operator Gondola Holdings, which it acquired in 2006 for 1.3bn Euros. The newspaper suggested Cinven is interested in hiring bankers after the summer to explore a sale, although this was unlikely to happen before the end of 2013. The economic downturn that followed the financial crisis of 2008 has meant Cinven has owned Gondola longer than is usual for private equity companies. Earlier this year, Cinven decided against selling better burger brand Byron after receiving unsolicited approaches. In its annual report for the year to July 2012, the group recorded a 4% increase in sales to £592m, and a 6% decline in earnings before interest, tax, depreciation and amortisation to £108m. Operating profit fell to £39m from £48m the previous year. The group had Ebitda of £91m when it was taken private.

Brewdog releases detail on Shepherd’s Bush opening: Scottish brewer and retailer Brewdog will open its Shepherd’s Bush site, its third London opening, in October, located at 15-19 Goldhawk Road, on the site of the existing Vandella bar. Brewdog Shepherd’s Bush will “feature 40 beers on tap, a BBQ food menu and some vintage arcade machines”. Meanwhile, A new television series featuring Brewdog founders James Watt and Martin Dickie visiting US craft brewers will premier on Esquire Network on 24 September. The TV series seeks to prove that “the drink of the masses doesn’t have to taste mass-produced”. 

Beds and Bars new Paris site hits 90% occupancy: The new 38 million Euros 600-hostel opened by Beds and Bars in Paris has achieved 90% occupancy within its first four weeks. Managing director Keith Knowles told Propel: “We have 1,000 beds in Paris now - (we have gone) from zero to 90% occupancy in four weeks with no effect on our existing site. The digital media team we have are simply the best in the business, the product development and delivery are amazing - and not a single zero hours contract to be seen. I am very proud to have the company I have and of the people in it.”

Hogs Back Brewery to double capacity: Surrey-based Hogs Back Brewery, headed by Wychwood Brewery founder Rupert Thompson, is to double its brewing capacity. The brewery has installed the first of five additional conditioning tanks this week, with the remaining four in place by September 2013.Thompson said: “We’re putting in four other conditioning tanks and when we’ve got those we’ll have doubled our capacity. If all goes to plan, we’ll be producing about 5.5 million to six million pints in total.” Hogs Back recently introduced its first cider, Hazy Hogg Cider, and a new lager is also in the testing stages.

JD Wetherspoon plans Shoebury Barn conversion: JD Wetherspoon has unveiled plans to convert Parsons Barn in Shoebury, Essex (population: 20,210) into a £1.4m pub. It closed last November and has been the subject of repeated vandalism ever since. The new owner hopes to have the work completed and the beer flowing again by next February, creating 45 jobs. Wetherspoon chief executive John Hutson said: “We appreciate this is a well-known building in the town, which has fallen into disrepair since its closure. We are looking forward to restoring the building and opening a new pub, which we are confident will be a great addition to the Shoebury community.”

Antic opens new pub, Leyton Technical, tonight: London operator Antic, led by Antony Thomas and backed by Downing, opens The Leyton Technical pub this evening at 7pm. The company opened a well-liked pop-up at the venue during the Olympics and for a weekend in June last year. Formerly Leyton Town Hall, plans to change the use of the building to a pub, install a pub sign and a new door and repair the ceiling were approved in November last year. The pub will open in stages with several rooms beyond the large front room, which will open today, to open as they are refurbished.

Purity hires Californian brewer: Warwickshire-based brewer Purity has hired a Californian brewer. Aaron Taubman has worked as head of brewing quality for Miller Coors in California for the past six years – his interview was done by Skype. He said: “I didn’t see the brewery until my first day on the job, which was the day after I arrived in the country, but I really couldn’t wait to get to work and start brewing in the UK. Everything in the US is kegged beer or bottles or cans, so I’m very excited to produce cask-conditioned beer.” Purity is opening a new brewhouse at its site near Alcester. The new facility will enable the brewer to produce up to 140,000 pints of beer every week, a 150% increase in brewing capacity.

Camm & Hooper confirms Propel story on second site: Camm & Hooper, the bar and restaurant company that is looking to ‘revolutionise the events sector’ in London and which is backed by original Drake and Morgan investors Imbiba has confirmed it has acquired a second site, as first reported by Propel at the end of June. The company, headed by former hotelier Claire Lawson, has bought Greens Restaurant and Oyster Bar on London’s Cornhill. The Runner Bar at Greens in Cornhill can accommodate gala dinners for up to 200 guests or canapé receptions for 350 people – and the entire venue can be hired for events for up to 450 people. In May, Camm & Hooper opened Tanner and Co in Bermondsey in the large warehouse site formerly occupied by Delfina’s, which had a turnover of £1.5m at the site. The first Camm & Hooper opening has a school gym theme.

Orchid Group champions government ‘back to work’ schemes: Orchid Group is doing its bit to halt rising unemployment by participating in a variety of government ‘back to work’ schemes. As figures show that the number of people out of a job fell by 57,000 in the three months to May this year, the pub company is embracing the opportunity to get more people into work. Orchid is on board with three schemes to give as many people as possible the chance to start a successful career in the hospitality industry. Sector-Based Work Academy – 30 participants so far: This pub and bar scheme is run by Perceptions and gives participants two weeks of hospitality training. There is no age limit on who can take part and Orchid commits to interview all those who complete the training. Wage Incentive Scheme – 26 participants so far: Provided by Job Centre Plus, this scheme is aimed at those aged between 18 to 24 who have been out of work for six months or more. Orchid pays each employee on the scheme the National Minimum Wage, and if they remain in continuous employment across 26 weeks the pub receives £2,275 for a full-time staff member; Work Experience – 35 participants so far: Work Experience is coordinated by Job Centre Plus and gives people between two and eight weeks of training in different areas. The participants do not receive a wage, but if they impress and opportunities are available, Orchid aims to bring them in to the team.

Hop Stuff Brewery and Quantock Brewery hit crowd-funding target: Hop Stuff Brewery, a start up brewery in Woolwich, south east London headed by James Yeomans looking for investment through crowd-funding to part-fund the cost of set up and produce new ales & craft beers for younger audiences, has beaten its target through Crowdcube. The company was looking to raise £50,000 for 30% of its equity. The company has in fact raised £58,300 through 72 investors, 117% of its target. Meanwhile, Quantock Brewery, based in Wellington, Somerset and headed by Rob Raine, has raised £120,000 from 130 investors through Crowdcube, which is 120% of its target.

Stonegate to convert Reflex in York to Popworld: Stonegate pub Company is to invest £220,000 to convert Reflex in York to Popworld. It will close this Sunday (11 August) and re-open on Wednesday 21 August. Tony Collins, general manager of Reflex said: “One of our team members summed up Popworld perfectly. They said it’s like being at a wedding party but without the wedding. You can dance like no one is watching, sing your heart out and everyone feels relaxed and safe.”

Draft House places Lordship Lane site on the market: Draft House, the bar operator led by Charlie McVeigh that has investment from Luke Johnson, has placed its site in Lordship Lane, East Dulwich on the market through agent Davis Coffer Lyons. The free-of-tie site has 24 years of a 25-year lease left with rent payable of £70,000 per annum – a premium of £50,000 is sought.

Arc Inspirations lines up US smoked food opening: Arc Inspirations, the Yorkshire bar and restaurant operator headed by Martin Wolstencroft, will open its tenth site in Leeds on 31 August. The Pit, a £800,000 investment located in Leeds Northern Quarter, will be an underground, urban-themed bar with a US food offer. It will sell its own beer, Pit Canary and steaks, lobsters, burgers, wings and ribs will be served after being cooked on a hand-built Oklahoma smoker. Of The Pit opening, Wolstencroft said: “This area of Leeds is one of the best locations for independents – we’re not about followers, we enjoy our independence and so do our customers. They want the best but also we want our customers to expect the unexpected. The Pit is very different to our other bars in Leeds, Harrogate and York, and we recognise that quality in everything we do, is a must. The urban, contemporary look is no excuse for not being at the top of our game. We are looking to grow our portfolio of bars in Yorkshire with two more bars opening next year. We want to enjoy the process of growing our portfolio but enjoy everything we do.” The opening comes a month after the company opened Banyan York, its ninth site. Arc Inspiration’s other venues include The Banyan Bar & Kitchen in Harrogate and Nappa Bar & Kitchen in Leeds. The company reported pre-tax profits of £2,557,465 on turnover of £11,655,708 in the year to 1 April 2012. Arc Inspirations had turnover of £12,536,538 and pre-tax profit of £2,760,300 the year before.

James Horler – Nottingham saw a perfect storm in July: James Horler has reported his Rocket@Saltwater restaurant in Nottingham had a bumper July - the venue’s busiest month on record. Last month saw Nottingham host the first Ashes test, National Armed Forces Day and a week-long programme of graduation ceremonies. The final week of July saw the bar and restaurant sell 3,500 pints of beer, 2,500 bottles of beer and 2,068 cocktails. The footfall through the month was an average of 6,000 a week, which is up 40% up on last year. Horler, whose restaurant is based in The Cornerhouse leisure and entertainment complex, said: “Nottingham created what I can only describe as a ‘perfect storm’ through July. There were three huge events and almost unbroken sunshine. We have had a fantastic month and I would like to say a huge thank you to our team who did an outstanding job. This is an important period for businesses in Nottingham, especially for ones like ourselves that have an emphasise on outdoor service. Taking full advantage of these busy months is something that is vital for both leisure and retail businesses across the city.”

Molson Coors to ramp up efforts to premiumise portfolio: Molson Coors is to ramp up efforts to premiumise its portfolio. Marketing activity will include its Carling Zest range, which Molson Coors reports is growing strongly, and its recently launched range of Carling Coolers fruit-flavoured beers. It comes as the brewer reported a 2.9% year-on-year dip in global sales to $2.2bn (£1.4bn) in its second quarter. The brewer blamed poor weather for denting demand in Europe where sales volume decreased 2% year-on-year. It is a downgrade on the brewer’s first quarter performance where sales jumped 1.6% year-on-year to £1.1bn.

Adnams – we are seeing a shift towards web sales: Suffolk-based Adnams has reported a shift at its shops to web sales. The company reported: “Turnover in the Adnams Cellar and Kitchen Store business was slightly lower than in 2012, but with costs savings achieved following a business re-organisation last year, the bottom line improved. There have been minor changes in our portfolio of shops since last year. We closed the Spitalfields shop last autumn and we opened the Norwich shop at the end of May last year. Having opened our own Norwich shop we closed the concession that we had in the House of Fraser store in Norwich in January this year. Sales in our shops fell by 1.7% compared to last year, though like-for-like sales were up by 0.6%. We have been investing in understanding the trading performance of each store so that it provides the best service for its local customer base. Aside from our shops we also saw a good performance from our mail order and web businesses over the last six months. There is a long-term shift in our business, as with many others, away from traditional mail order and towards web sales, but with a strong seasonal cellar offering and with en primeur wine sales our mail order business has had a good six months alongside a growing web business which has become important for sales of hotel rooms and brewery and distillery tours as well as Cellar & Kitchen products.”

Hooters franchisee buys Nottingham site: Chanticleer Holdings, a franchisee of international Hooters restaurants and a minority owner in the privately held parent company of the Hooters brand, Hooters of America, is to buy the Hooters restaurant in Nottingham, England, for $3,150,000, from West End Wings. Nottingham will be Chanticleer’s second European and seventh international location. West End Wings has operated the Nottingham restaurant for 13 years. The restaurant is one of Hooters’ leading international locations, and is located in an area that is home to successful sporting teams and tourist attractions. The restaurant’s current management team will continue to operate the restaurant under Chanticleer’s new ownership. The restaurant has 340 seats, including two outdoor patio areas that accommodate a total of 80 customers. Mike Pruitt, chief executive of Chanticleer Holdings, said: “Nottingham has been a stellar location for the iconic Hooters brand, and we look forward to closing this transaction soon and benefitting from the restaurant’s future success.”

Spirit makes finals of apprenticeship awards: Spirit Pub Company is celebrating having reached the regional finals in two categories at the National Apprenticeship Awards 2013. Now in their tenth year, the awards celebrate the achievements of the country’s most outstanding apprentices and apprenticeship employers. Spirit is a finalist in the Apprentice Employer of the Year, and has its star apprentice, Charlotte Bonser, up for the Intermediate Apprentice of the Year award. Finalists for the Employer of the Year award include Morrisons, Sanctuary Group, McDonald’s and Nestle, among others. The award winners will be announced at a ceremony organised by the National Apprenticeship Service, which will be held at Madejski Stadium, Reading on 19 September. Jo Bradford, national qualifications manager for Spirit, said: “We’re absolutely thrilled to be named regional finalists at the National Apprenticeship Awards. To be considered alongside large multinational companies that are well established is an achievement in itself. In just over three years we’ve developed a comprehensive award winning apprenticeship programme that has just recently passed the 1,000 candidates milestone, and we’re extremely proud to be recognised for our efforts so far.”

Drake and Morgan reports turnover and profit up: London bar operator Drake and Morgan has reported turnover rose to £17,634,580 in the year to the end of March 2013 (2012: £16,400,298). Pre-tax profit rose to £1,510,104 from £1,398,270 the year before. The company stated: “The directors were delighted with the performance of the business in the year ended March 2013. Strong turnover growth was achieved from the five units trading throughout the year, despite the inclusion of a 53rd week in the previous period. The directors consider turnover and EBITDA (earnings before interest, taxation, depreciation and amortisation) as the key performance indictors of the company. Turnover and EBITDA increased by 8% and 21% respectively, compared to the previous year, rising to 10% and 26% after the elimination of the effect of the 53rd week in 2012. Other key performance indicators are regularly monitored including the gross profit percentage on drink and food sales and also the labour margin. In the current year these measures produced favourable variances to budgeted levels. Since the Year End, the business has been acquired by Bowmark Capital, providing a strong platform for the future expansion of the business. The support and financial backing creates an exciting next phase of growth for the company. In June 2013, the company opened its sixth bar in St Pauls, London and will be opening its seventh bar in Holborn before the end of the financial year. Further opportunities are being explored and progressed.” Drake & Morgan was owned by Imbiba Partnership prior to its sale to Bowmark – Imbiba directors Simon Wheeler and Mark Brumby resigned from the board in April. The most recent financial year saw exceptional restructuring costs of £284,392. A capital commitment of £1,300,000 is provided for by way of the costs of fitting out the Happenstance. Drake & Morgan acquired for a reported £30m by Bowmark Capital. Bowmark has plans to expand the business to 70 sites across the UK. Bowmark, which owns Las Iguanas, said at the time of the deal that the brand is an “appealing proposition for both customers and landlords” and has potential to grow beyond London. Imbiba chairman John Connell, who continues as chairman, said at the time of the deal: “This exit represents a truly excellent return for Imbiba Partnership shareholders an illustrates our consistent ability to deliver significant value. We have known Bowmark for a long time and have been impressed by their understanding and approach to the sector.”

Return to Archive Click Here to Return to the Archive Listing
Punch Taverns Link
Return to Archive Click Here to Return to the Archive Listing
Propel Premium
We are Beer Banner
Imbibe Banner
Growth Partners - Find out More Banner
Cruzcampo Banner
Wireless Social Banner
Surreal Banner
Hogs Back Banner
Star Pubs Banner
Redcat Banner
HDI Banner
Propel Banner
Hospitality Kicks Banner
HGEM Banner
Access Banner
Christie & Co Banner
CACI Banner
Wireless Social Banner
Airship – Toggle Banner
harri Banner
COREcruitment Banner
Hospitality Rising Banner
Cynergy Bank Banner
John Gaunt Banner
Zonal Banner
harri Banner
Tabology Banner