Senior figure who shoots from the hip

It's not often you find a senior industry figure attacking a peer's management record. The scathing attack by Bob Senior this week on his successor Mark Jones at Ultimate Leisure is that rarest of things - a full-blown onslaught.

Senior argues that £15m of investment in 18 months at Ultimate is failing to obtain the conversion to profit rates that was his hallmark in seven years at the company and at his new business, Utopian Leisure. Sources close to Ultimate suggest like-for-like sales were in decline by about 20% when Jones was parachuted into the company in August 2005. They also insist that levels of capital investment had been very low in the two years prior to Senior's departure.

Certainly, the sale of large numbers of shares by chairman Allan Rankin and his brothers in the months leading up to Senior's exit suggested they thought the company's share price was ripe. Senior himself was warning of very difficult trading conditions - and sales erosion at the level of 20% suggests re-investment was long overdue or competitor intrusion had placed the company in a weak trading position in a number of key sites.

There's no doubt that Ultimate, like every other nightclub company, faced unique challenges in the summer of 2005. Arrival of the new licensing regime that November and a tougher underage regulatory climate meant it was virtually impossible to avoid sales leakage. For Jones, taking on the top job at Ultimate wasn't exactly a hospital pass, but, in my view, just about the toughest licensed retail job going. His 18 months as Ultimate executive chairman have been every bit as torrid as you'd expect. The departure in late 2006 of Colin Rowlinson, the Ultimate development director who had worked as Jones's right-hand man at Yates, suggests there has not been complete harmony over strategy going forward.

The only real test here is whether Senior would have spent £15m more wisely than Jones at Ultimate and obtained better returns for shareholders. This point remains unknowable.

There's no doubt, though, that Senior is as unique a figure in the sector as Luminar's Steve Thomas - someone so steeped in the late-night sector that he is a hard, almost impossible, act to follow. And Ultimate in the Senior era always gave the impression of a company formed in his image - a team that had gelled around the personality of its chief executive. It's no surprise that Jones has seen many of Senior's team depart - or that he has had to transform the culture at Ultimate. No other part of licensed retail relies as heavily on micro-management and micro-marketing at each and every venue. In this sense, the learning curve for Jones at Ultimate would have been much steeper than in his days at Yates Group or Pizza Hut, where strategy would have been much more driven from the centre.

The last results at Ultimate suggest that Jones has succeeded in stabilising Ultimate's trading position, although Senior would say that this has been achieved thanks to a sizeable capital injection.

The final point is that management remains in position only as long as it retains the confidence of shareholders. The recent move by Ultimate's biggest shareholders, Dawnay, Day and junior members of the Reuben family to raise another £25m for investment shows that Jones retains the absolute confidence of these key shareholders. It was also these key shareholders who clearly felt that they had insufficient confidence in Senior in August 2005 to allow him to stay.