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Mon 9th Nov 2015 - Loungers: potential for 500 sites, Piper likely to exit in next 18 months
Collins – Loungers brands have potential for up to 500 sites, expects backers Piper to exit in next 18 months: Loungers managing director Nick Collins has said he believes there is potential for the Bristol-based cafe bar company, which currently operates 60 Lounges and 11 Cosy Club sites, to expand to 500 sites in the UK across its two brands. Collins, who became managing director in January this year, said its eponymous brand could reach 400 venues along with about 100 Cosy Clubs. There are 25 new sites secured for Loungers for 2016 while the brand is “quite well” into its pipeline for 2017, said Collins. He added there are also plans to start to open seven to eight Cosy Clubs a year with confidence “growing significantly” in the concept. He added it was likely its backers, Piper Private Equity, would seek an exit in the next 18 months but it would not be a “distraction” for the company. Collins told the Propel Multi Club Conference: “All options remain open but we have not appointed advisors, not close to doing so and we have not had discussions with any third parties. In terms of a deal, the key considerations for the business is making sure it finds the right home where it will be able to fulfil its potential. We will certainly not be distracted by a deal at any time in the next few years. Our focus entirely is on the day-to-day running of the business and, regardless of any transaction, we are still at a very early stage in the Loungers journey. The bus has only just got started and while there may be a few stops along the way to allow others to get off, we still have a lot of sites to open and it’s likely to be a long, long journey.” Collins reported that both co-founders Alex Reilley, now executive chairman, and Jake Bishop, operations director, have indicated they would be happy to remain as non-executive directors in the wake of Piper’s eventual exit. Succession has been on the Loungers agenda since 2012 – and it now has a chief operating officer, Justin Carter, in position. Collins said that rents as a percentage of turnover remain less than 6% and because all site designs and fit-outs are carried out in-house it reduces company costs – it runs a £15m per annum in-house construction business. He added a typical Loungers fit-out takes five to six weeks. Collins said the company now priorities ROCE (Return on Capital Employed) over like-for-like sales growth. He added: “Our over-riding goal is to be the best about everything we do and importantly across the business to take pride in it. Consistency in terms of great hospitality and product alongside protecting culture in the business are our priorities and, if we achieve these, then the sales and the people side of the business will continue to flourish.”


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