Having a laugh

Regent Inns has just sold the last of its unbranded pubs and will now focus on the roll-out of Jongleurs, Pals and Walkabout. By Mark Stretton.

When Stephen Haupt took the top job at Regent Inns two years ago he found a medley of miscellaneous businesses under one roof. "We had a building company, a property company, six enterprise investment scheme companies, about 60 pubs operating in all sorts of markets and this Australian brand called Walkabout," he said.

In the last year the company has transformed itself into a focused brand specialist, a process that was completed 10 days ago when it sold the last of its unbranded pubs.

The company is focused on rolling out Walkabout and its comedy club and late-night bar combination Jongleurs/Bar Risa, as well as the continued development of what Stephen hopes will be a third brand, Pals.

The disposal of Regent's unbranded pubs has seen the company sell 20 pubs to Wizard Inns (£27.9m), 13 to Broken Foot Inns (£8.1m) and then 17 to Porter Black (£4.3m).

The move did not pass without criticism. A loss on the property against book value plus costs associated with the sale meant Regent incurred a £13.2m hit in its last set of accounts, leaving some shareholders less than happy.

"Most of our decisions have been quite simple, but they have not been easy - there has been some pain as we've done it," said Stephen. "We got the timing of the decisions right and we have carried them out in a professional manner - we have been precise and deliberate."

Short-term pain for long-term gain was the order of the day then, with the rewards being the higher returns on cash that the branded bars bring.

But given the current climate, is it not dangerous to focus so narrowly on high street entertainment? "Before we were unfocused," said Stephen.

"We have de-cluttered this business and now we are in a very strong position." Stephen points to the £40m sat in the Regent bank account plus an additional £40m of untapped debt already agreed with its backers.

Even so, with everyone talking about recessions and downturns some have suggested Regent could be left exposed with Jongleurs. As an expensive night out it could be the first to miss out in harder times.

"I would totally disagree," said Stephen. "Many of our venues are near universities and we all know students look for value. Customers pay £10 for a ticket and for that they see three top comedians plus have entry to Bar Risa, which operates on a late licence.

"That is six or seven hours entertainment, which is extremely good value, I'd say. What doesn't strike me as very good value is paying £8 to get into a nightclub that doesn't open its doors until 10pm.

"Also, people pay in advance for Jongleurs tickets, so by the time the event comes round the money is long gone from the bank account."

The winter months are the key part of the year for Jongleurs. The number of comedy shows step up from two a week to six in the run up to Christmas and the paying public's penchant for organised laughter runs right through to May.

Bookings at Jongleurs, as you would expect, are up 20 per cent on last year, when terrorism took its toll. "Some things are more important than business," he said. "It was obvious that the phone would stop ringing at Jongleurs last year - it really wasn't right to pre-book a night for overt fun and laughter."

The chief executive says that Regent wins because it has clearly differentiated brands. "There is not another brand that can touch Walkabout," said Stephen. "This year's performance confirms its status as the number one entertainment bar brand. Average sales at Walkabout and Jongleurs hit £44,600 and £39,200."

That said, Stephen acknowledges the industry as a whole is having a tough time of it. "It's pretty testing at the moment," said Stephen. "If you check out the main party sessions of the week, Friday and Saturday nights, the business is still very much there - the challenge is filling the rest of the week."

The demise of Old Monk and the troubles of SFI have hit share prices across the sector. "Some cities have too many pubs and too many brands," he said. "It is about the survival of the fittest. There is no doubt in my mind that the next 18 months will see a shake-out in the sector."

Stephen has pubs in his genes - both his father and grandfather were licensees. He started his career as a trainee manager with Trusthouse Forte before joining Grand Metropolitan, where he rose up the ranks to managing director of the branded restaurant division. "It was a tough school," he said. "But if you weren't frightened to make decisions you got on very quickly."

He has been at the forefront of the Regent Inns transformation but is quick to point to others as the architects of its success, particularly those responsible for the all-conquering Walkabout. He cites founder David Franks and operations director Michael Thiele as the key men behind the Australian sports bar, arguably one of the most recognisable pub brands in the market.

"I remember when I first joined Regent," said Stephen. "The big question was whether Walkabout would travel outside central London, which is perceived as an Antipodean stronghold.

"In fact it works even better out in the regions. People are spoilt for choice in London whereas beyond [the capital] they're not used to a concept of that size.

"I think it is essentially a lifestyle brand. It stands on many legs. On the one hand it is there for those who like sport, on the other it is there for people who want to go out and have a really good night's entertainment.

"The sheer scale of Walkabout is what gets many people," he added. "I see it so often when we open a new venue. It has this, please excuse the word, 'wow' factor." The company has opened 10 in the last year to take the brand to 32. It plans to have 50 by 2004.

Following last year's aborted bid to buy Pitcher & Piano from Wolverhampton & Dudley, Regent acquired Pals, a two-strong high street bar business, one located in Ipswich and the other in Croydon, with an eye to developing it as a third brand. Since then it has opened a further two - in Southend and Hertford. "Visually it does sit in the P&P and All Bar One market," said Stephen. "It's aspirational, has a party atmosphere, a wider range of homemade food, table service - the underpinning values are sound.

"There are a few things we can do to move it on and then we're going to sit on it, analyse it very thoroughly and go from there." Stephen says a third brand will sustain growth once the Walkabout and Jongleurs targets have been hit in 2004.

Stephen believes a differentiated product is no longer enough - standards are what guarantee success. "What would really piss me off going in to one of my bars, or any other for that matter, would be poor standards," he said. "The stuff you see straight away like dirty tables, plates with left-over food. That and staff with poor customer service skills."

Conversely, there is nothing he likes more than seeing customers enjoying themselves because it means everything is working as it should.

"The biggest kick is standing at the back and seeing the party in full swing," he said. "That's what we're in business to do and to see it is immensely pleasing - plus it means the tills are full."