Revolution's wheels keep on turning despite slow growth

Related tags Vodka

By The PMA Team Inventive Leisure, which operates the 31-strong Revolution vodka bar chain, has seen its sales growth slow from 3.9% last year to...

By The PMA Team Inventive Leisure, which operates the 31-strong Revolution vodka bar chain, has seen its sales growth slow from 3.9% last year to 2.1% in the first 10 weeks of this year as a result of the "challenging trading environment".

The company still believes there is room for a further 80 Revolutions around the country and has exchanged contracts on seven sites.

Existing sites have achieved an average turnover of £26,500 per site in the company's first six months, up 10% on the same period last year.

Its first two London sites ­ in Soho and Clapham ­ are turning over an average of £35,000 and "nudging £40,000 per week" respectively.

Five Revolution bars ­ in Chester, Harrogate, Milton Keynes, Reading and Walsall ­ were opened in December.

"Early signs have been very encouraging with average turnover of £28,000 per week," said chief executive Roy Ellis.

"Larger units have the advantage of being able to create three distinct trading areas: a bar and dining area, a lounge area with sofas and log fires and an area suitable for dancing."

Profit margins have decreased by 1.8% to 26.3%, with an increasing number of leasehold properties in the estate pushing up rents and rates as a percentage of sales by 2% to 9.1%.

The company's payroll costs have also increased by 1.4% due to an increase in support personnel to facilitate a new staff incentive scheme which is called "Service that Sells".

In July 2002, 418,865 share options were granted to more than 100 salaried staff, including site managers, assistant managers, chefs and head office support staff.

More than £146,865 of bonus payments were distributed to hourly-paid employees ­ an average of £160 per employee.

Overall, turnover increased by 40% to £17.4m, with pre-tax profit up 20% to £1.42m. "It is no secret that a number of operators have either stopped or significantly scaled back their roll out," added Ellis.

"These conditions will provide reduced competition for sites and that property costs are likely to fall over the short and medium term."

Inventive news in brief l

The controversial closure of Birmingham's Broad Street pub and bar area to vehicles for eight weeks at the start of the year cost the company £10,000 a week in takings at its Revolution outlet.

"It was a nightmare," said Ellis.

l Vodka sales at the Revolution chain now account for 37.4% of the sales mix compared with 35.6% over the same period last year.

Vodka-based cocktails have seen a sales increase of 140% on this time last year.

Cocktails now account for 9% of the sales mix and generated £1.5m in revenue in the first six months of the company's year.

Shots of flavours, premium and pouring vodka grew to 2.8m shots, largely as a result of the staff incentive scheme.

l Finance director Vernon Lord has resigned after four years in the job.

Ellis said: "Vernon believes the time is right for him to move on to other projects and we wish him great success.

Vernon will remain in situ until a suitable candidate has been found and bedded in."

l Total company sales for the first 10 weeks of the second half has seen sales increase by 49% over the same time last year.

The five new openings of the first half are the "key drivers of growth", although profits are "unlikely to grow as fast as sales".

Related topics Professional Services & Utilities

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