Wizard Inns' Chris Hutt set to maintain rapid growth
Chris Hutt, founder of Nomura-backed Wizard Inns, is determined to maintain the company's rapid growth. Mark Stretton reports.
Chris Hutt likes to be different. As a whole raft of managed pub companies have hurried to roll-out brands across their entire estates, the Wizard Inns boss has refused to join the rush.
"I like to go against the grain," said Chris. "When the masses go in one direction, I think it pays to go in the other."
Managed and unbranded has been the company's mantra since its inception in 1997.
"The majority of brands have no place in publand," he added. "We leave brands to the lemmings. There are probably about six successful concepts from 300 in the market.
"If somebody had said four years ago that today Yates would be anything less than an outstanding success, we would have thought them mad. If you get something wrong in a single venue it can be a headache. If you get something wrong across an entire branded estate, it can be much worse."
As tenanted pubs come roaring back in the popularity stakes, the Wizard Inns boss is plotting the next phase in the rapid expansion of his 48-strong managed bar and pub group.
Chris is very happy with all the changes and the number of deals currently taking place in the market at the moment and says this will result in more churns and more opportunities.
The company's main financial backer Nomura recently sold more than 4,000 tenanted pubs and speculation that the Japanese bank would sell Wizard, its only remaining pub operation, has been rife. But Chris says the investors are staying put.
"The business has a lot of steam in it and is still very immature," he said. "There is more value to come down the line and the characteristics of Wizard are not the same as Unique and Voyager.
"The emphasis is very much to keep it growing - rapid growth is exciting to investors and Nomura has been very supportive."
An exit is on the agenda at some point however, and Chris has share options in the business that will pay-out in the event of a successful float or trade sale.
The company has returned 40 per cent compound growth over the past four years and Chris plans to maintain at least 30 per cent going forward. Chris says he is comfortable with that kind of rate. Through Nomura and with the support of Royal Bank of Scotland, Wizard has amassed a war-chest of £20m. Nomura recently added a further £5m.
Wizard has allocated £6m to fund major developments between now and the end of the year, with Chris and his management team currently scouring the market for more opportunities.
The company has just opened Bar Mango, its 48th bar, in Romford, Essex, a unit the new manager described as a reformed "scrappers' paradise". Breathing life into outlets is something of a Wizard speciality and the venue is now far removed from the male-dominated, intimidating place it once was. Exploring less fashionable locations has paid dividends for Wizard. The company is not afraid to go into towns where other operators might fear to tread.
"I'm quite a rebellious character generally," he said. "If someone says 'open a pub here Chris because it will be great' I tend not to give it a second thought, but if someone says 'don't go there, it's a rotten place, it'll be horrible' then I'll always go and have a look."
The Wizard estate mix ranges from traditional wet-led pubs to female-friendly style bars with a late licence, such as Bar Mango.
Chris feels the company has the ability to trade successfully right through the four sessions of the day.
"It's a balancing act," he said. "But we are now appealing to people from morning right through to the late licence crowd."
The Wizard team encourages its managers to be entrepreneurial by adapting to the local market and giving customers what they want.
One pub, in Stratford, East London, has a South African beer because of the influx of travellers and workers from that part of the world. Another serves up fish found only in Hawaii.
"We want the operators to make a difference in the way the pubs are run," said Chris. "Managers who have come from a branded environment where they have been number 1,286 really respond to that."
The company has introduced table service in 17 outlets, resulting in a significant surge in sales. Chris says the trade can learn from other industries when it comes to retailing.
"Boots has been doing three for two offers for years," he said. "We run a promotion where if you buy two large (250ml) glasses of wine, you get the third free. It's very successful and it's a basic three for two."
The Wizard chief started his working life as a graduate trainee at the Ford Motor Company in Dagenham. "I was fascinated by the pub industry," he said. "As a brash, abrasive young man I thought I could do better and decided to have a go."
In 1976, aged 26, Chris became the second chairman of the Campaign for Real Ale (CAMRA) and during his year there membership grew 10-fold, from 1,400 to 14,000. He then set-up an off-shoot, CAMRA Investments, a real-ale pub company that Chris was managing director of. He is still a member of CAMRA but is no longer directly involved.
He still holds the founding CAMRA principles and Chris believes real ale has a good future. Wizard Inns has been awarded the Cask Marque in 18 of its pubs.
But he says the consumer group was wrong to take up the fight on the full pint issue. "There was absolutely no evidence of customer dissatisfaction with the present arrangement," he said.
After CAMRA, he set up and grew Midsummer Inns to 15 outlets before selling it for £2.1m in 1984. He then founded Unicorn Inns, supported by several equity groups, which was sold to Moorlands in 1996 for £16m.
Chris' shareholding meant he was financially independent so he took a break.
But it never occurred to him to give up work altogether and a year later he set up Wizard. "I enjoy the business," he said. "I enjoy the creativity and the social aspect, and I enjoy building a successful team of people.
"Most of all I enjoy winning in the marketplace and I express my competitive nature through work.
"It's like batting for England in a test match at Lord's - you want to do gloriously well, no matter what's already on the scoreboard."
Chris is a founding member of the Association of Licensed Multiple Retailers, which is currently spearheading the industry's fight for licensing reform.
"The licensing situation is an absolute shambles," he said. "The case for reform has been blindingly obvious all my working life and nothing has happened.
"The Department of Culture Media and Sport is a shower of time-wasters and the politicians are a bunch of liars. I could write a licensing bill on a side of A4 paper."
While industry issues rankle, the Wizard boss is happy with his lot. With the estate set to double in the next three years Chris is upbeat about the future.
"The best is yet to come." he said. "We have a terrific team of people and a very promising business is being built - this is a very vibrant time in our company's development.
"I've been in this business 28 years and I still get a terrific buzz from it and I'm still learning new things every day."
Related stories:
Wizard Inns opens £25m war-chest (22 April 2002)
Nomura could sell Wizard Inns (26 March 2002)
Enterprise takes control of £2bn Nomura pubs (20 March 2002)
