News Article Comments : 2,000 pubs could close for good

RE: 2,000 pubs could close for good

This comes as no surprise, the great and good have necessarily been in denial (shareholder value), but they cannot continue to deny what is obvious to all at the 'sharp' end. 2000 pubs is a goss under estimate, many of the Pubco low end pubs cannot even now find new tenants, vast numbers are under temporary managers. The Pubco's have upwards of 4000 lessees wanting out. The survival of the fittest mentality may work in the short term, until something else clobbers the Industry. We have reached 'Custers' last stand as far as real pubs are concerned, and I am sure I am far from alone, as the MA survey showed, is approaching Christmas with less bookings than I have ver known. Merry it ain't going to be.

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RE: 2,000 pubs could close for good

A "sweeping statement" such as 2000 pubs will close over the next two years OR SO is not exactly very scientific , how long is OR SO - 4 years -6years- 10 years WHAT? However , pubs have been closing over the decades as the social demographics of the country change along with drinking habits of the population ( beer volumes have been declining for years with customers switching to wines, soft drinks etc) . Many such closed pubs have a higher "alternative use" value as houseing , for which the government tells us that there is a cronic shortage , so good  news there then, or car parks , again a cronic shortage along with general commercial use.The freeholders will not loose out on value just ongoing rental income as the value of the property as altenative use will proberbly be greater than that as a pub. I valued a business yesterday which as a going concern came in at £475ks but as a site with altenative use , above £850ks. Hard facts of life but facts of life they are.

The remaining "pub stock" will be much healthier and will look somewhat differant than at present. Without any doubt , the current loss of pubs has been compounded by New Labours introduction of the non-smoking laws. I believe that had this law allowed pub owners to chose either to be smoking or non-smoking outlets then the trade would have weathered the other problems , there would have still been closures , but not as many and in controlled sell offs. You know who not to vote for at the next election i am sure!But will you?

This post replies to Robert Feal-Martinez > RE: 2,000 pubs could close for good

RE: 2,000 pubs could close for good

Peter , having been selling both leaseholds and freeholds for around 35 years , having personally sold above 1,700 pubs etc plus the pubs my firm has sold, i can confirm that the reasons for sale have not changed , they fall in general into the following catigories...

1) Capital gain from added value of freehold or leasehold business's ( usually by way of profit ratio or sales multiples and not by B&M revalue unless alternative use makes it more valuable)

2) Ill health

3) Retirement , especially with the CGT rules changing in April 08

4) Break down of partnership ( ie partner run away with Australian barman/maid!!)

5) Change of career or business focus ( staking shelves in Tesco)

6) Decline in sales and/or profits making the return on effort unreasonable

7) No profits and no ablility to turn business around

8) Governmant legislation and EU laws which make the business model unworkable or unprofitable  ie Non-smoking laws.

So then , the reasons to buy.......to work within a great industry enjoying a higher than average lifestyle , being your own boss, living vertually free in posibly some of the most desirable properties and locales in the UK and getting a genuine return on your efforts and acheivments providing a pension for yourself and a future for your family. ITS AN OPPORTUNITY WAITING TO HAPPEN.

This post replies to Peter Eveleigh > RE: 2,000 pubs could close for good

RE: 2,000 pubs could close for good

Graham, I have been involved in buying pubs /hotels for the last 8 years and I cannot recall seeing quite so many " new price" tickets on schedules ( your site included).  Now that means that collectively agents have got the prices wrong or the market is getting sticky.

I would also note that some of your reasons for sale have indeed changed , having seriously impacted on a majority of businesses. CGT and smoking in particular still filtering ( no pun intended)  through to full impact.

I think the old adage of " how do you end up with a £million out of a the licenced trade?................ start with  £2 million" .    

This post replies to Graham Allman > RE: 2,000 pubs could close for good

RE: 2,000 pubs could close for good

Interesting point.......... during my six-year stint in 'supporting' the Pubco model, I took on three varied premises all of which had been run into the ground through lack of investment. Each of the outgoing tenants/lessees was in hiding from bailliffs, and there was no trading information or barrelage available.

Yes, I took a chance but with hindsight, how unbelieveably irresponsible of the Pubco and it's BDMs to allow the situation to develop to that pitifully low level.

That was three out of three, in a relatively small area of South Wales, and I've yet to find ONE that is trading successfully, or indeed profitably, with any kind of support, advice or encouragement from Enterprise.

How many hard-pressed lessees are too busy playing catch-up, to be able to move forward? And how many are only hanging-on because its where they live?

Now if Tuppen would like to pay the so-called live-in benefit of £10,000 as a retainer to this free army of self-employed he has contracted to him, maintaining his premises and paying obscenely over the odds for his brokered produce............

I can only predict the closure of more than 2,000 pubs, and with the additional profit that comes with change of use, the Pubcos will keep their win-win position.

This post replies to Robert Feal-Martinez > RE: 2,000 pubs could close for good