Greenalls may be set for a shift in investment focus

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With news of yet another new face among the directors at Greenalls Pubs & Restaurants, it's clear that new broom Mark McQuater is planning some...

With news of yet another new face among the directors at Greenalls Pubs & Restaurants, it's clear that new broom Mark McQuater is planning some sweeping changes.

He is reviewing Greenalls' 769-strong portfolio, which have seen trade fall since October. They range from rural food pub concepts, Millers Kitchen and Henrys Table, to high street bars Squares and Henry's.

This year's roll-out plans, instigated under predecessor Roger Young, are already in place — but by the end of this year McQuater will have had a chance to bring his own management style to bear.

Its highly successful chain of young people's venues, Squares, is set to grow from 11 to 15 by June. The twelfth is due to open next month in Liverpool, followed by Swansea, Leicester and Manchester.

Ken Buckley, director of Pubs & Restaurants' theme division, said: "The market for pubs and bars is more crowded than ever, with many 'me too' brands competing on the high street."

But he said Squares had an edge because of its customer service, quality food and unique technology, including its patented 64-screen revolving video cube hanging from the ceiling.

With sites as far south as Hampshire, the Cheshire-based Pubs & Restaurants is confirming itself as a national brand by entering Scotland.

Its first site will open in a listed building in Glasgow city centre as a fashionable bar concept, Temble Bar. Further sites are under consideration elsewhere in Glasgow and in Edinburgh, Dundee, Aberdeen and Ayrshire.

"Until now Scotland has been a huge gap in our otherwise national portfolio," Buckley said. "It represents tremendous opportunity, with vibrant cities such as Glasgow, Edinburgh and Aberdeen continuing to develop new pub circuits."

It is part of a major surge of investment on the southern bank of the River Tyne at Gateshead with its new Baja Beach Club.

Pubs & Restaurants gained the UK licence for the nightclub concept from Chicago-based Baja International, which has eight outlets in the United States, two in the Netherlands and one in Spain. Featuring bikini-clad barstaff, it will be an American-style beach-themed bar, with disco, food and entertainment.

Its development dates back to two years ago when Young and former retail director Paul Beadle — now the head of Oxford pub operator Morrells — visited a Baja in Florida. Costing nearly £2m and having a 8,500 sq ft trading area, it caters for people from 18 to 40.

Other themes currently due to be developed include Henry's Café-Bar, which has grown to 16 sites nationally, and the American-style Quincey's, which has 11. The stylish bar concept, Via Fossa, has only two outlets because of the difficulty of finding sites for the labyrinthine layout.

The new team at Pubs & Restaurants includes McQuater's former Tom Cobleigh colleagues, finance director Peter Hill and human resources director Jane Biss, and project and estates director Stephen Price, from Scottish & Newcastle Retail.

They face a tough year after group chairman Andrew Thomas revealed the pubs' like-for-like sales fell 4.6 per cent from mid-October to mid-February.

"Trading in Pubs & Restaurants has remained difficult and is below both last year and our expectations for the current year," he said.

However, turnover per outlet at the managed houses rose by 2.5 per cent and food sales were up 5.9 per cent overall.

He said the appointment of a new managing director was part of a programme to "refocus and transform the growth prospects of the group". He has already predicted that restructuring of purchasing and distribution arrangements will save Greenalls £5m a year.

Following December's disposal of the franchise and tenancy business Inn Partnership, Thomas said pub investment was now focused on Squares and Henry's.

Other parts of the Greenalls group, which includes luxury hotels and health clubs, are "slightly ahead" — the main reason that Whitbread was believed to be considering a takeover bid this month.

However, the drinks wholesaling group Tavern, which supplies pubs across the UK, had a difficult start to the year after its margins were hit. Thomas blames "the challenging trading environment" and "subdued consumer confidence", which he hopes McQuater is well placed to fight.

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