City diary
Inventive record breaking
Although trading is tough, some companies are steaming through. Revolution vodka bar owner Inventive Leisure, taken private a few years back by private-equity firm Alchemy, is talking about single-digit sales increases last month. Moreover, its Leadenhall branch, opened last summer, has been smashing all company sales records. With six-figure sales figures each and every week, City Diary hears that Christmas week saw sales of - wait for it - £256,000. The refit cost was £2m and it has an annual rent of about £300,000. "It all looks modest now," boss Roy Ellis says. A new site opened in Southampton last week - with Wigan next on the opening schedule.
Revolutionary shift
Talking of Inventive's blockbuster Leadenhall site, some people are wondering whether the bar has sparked a fundamental shift of spending away from the north end of Bishopsgate. Some retailers located close to the Revolution are reporting remarkably buoyant like-for-likes - and it's got to be coming from somewhere...
Just don't go there
The plan by Laurel Pub Company to put parts of its high-street segment into administration may cause a few red faces among executives long-since departed. The move reflects a smattering of bad investment decisions among those who worked at Whitbread, Yates and SFI in their expansionary heyday. City Diary is aware of one Laurel site in a provincial market town that peaked very early indeed, before being dispatched very swiftly by "competitor intrusion". The executive involved in opening the site tells City Diary: "How were we to know that they high-five with six fingers in that town?"
Toxic leases spreading
There was talk last week of Laurel's problems being linked to "toxic leases" - rent ratcheting up and sales dipping. One business development manager of a well-known tenanted pubco had a call from a licensee after the Morning Advertiser reported the expression, saying: "I think I've got one of these toxic leases."
Beauty of virtual reality
Entertaining Blue Oar Securities analyst Mark Brumby, reflecting on the discussions at Laurel over a controlled administration, recalls a spoof valuation doing the rounds during the dot-com boom. "EBBS (Earnings Before Bad Stuff) was used to make even the worst companies look good and, if one were to apply the same measure to virtually any chain of pubs, it would be possible to come out with something that looked pretty good - or at least not awful."
Out of this world
Diageo boss Paul Walsh (below) was on the receiving end of a pasting when he appeared on Sky News on the day company results came out. The obvious charges about alcohol causing the moral ruination of British society were put to him. Walsh made one mistake in the eyes of national newspapers - he claimed price has little effect on consumption. The London Evening Standard dropped on him like the proverbial ton of bricks. "What planet are you on, Paul?" it asked.
Dutton holds his nerve
With sector share prices stuck in a gutter of gloom, it's been easy to get off-side. Punch's new finance director Phil Dutton, who replaced Robert McDonald (not Ronald McDonald) last autumn, splashed out £108,200 on 7 September 2007 buying 10,000 shares at £10.82 each. Holding his nerve, Dutton spent another £122,000 on 18 January, two days after the annual general meeting statement, buying 20,000 shares at £6.10 each.
In the heat of the night
The Bar Entertainment & Dance Association has chosen Noctis as its new moniker, saying it's Latin for "night" and helps stress the role of the organisation as the "voice of the night-time economy". A City Diary contact, who is something of a Latin scholar, rings to say: "Nox is Latin for night - it's the genitive form meaning 'of the night'." Does former Conservative leader Michael Howard, of whom Ann Widdecombe claimed there was "something of the night about him", get associate membership?
Cut-price quiz time
Which company is referred to as "tyre kickers" because of its tendency to chisel away at the price of anything it plans to buy?
The view from on high
Northern Ireland deputy first minister Martin McGuinness - a member of Sinn Fein, you'll remember - has railed against the EastEnders and Coronation Street binge-drinking culture, claiming it's "irresponsible broadcasting". "I am absolutely appalled at the level of concentration around the pub in the programmes," he says. Amazing, sometimes, who you find on the moral high ground.
Premium's Cork solution
In a footnote to the Premium Bars and Restaurants results, City Diary spotted that the company's ill-fated foray in the Cork nightclub market has ended. The company signalled in October 2006 that it might sell the venue - 18 months after it opened. In the first attempt by a UK nightclub operator to attempt expansion in southern Ireland, the company, under chief executive Bob Senior, spent £5m opening the 1,000-capacity Blu Bambu, its biggest investment, in April 2005. Chairman Mark Jones described the Cork venture as "ill-conceived." Premium has leased the site to a local operator who spent £750,000 on a re-fit and is doing, says executive chairman Mark Jones, very well. Premium has taken the same route with a troublesome Mansfield nightclub site.
Greene King catches on
Greene King's great new phrase - "catch people doing things right" - may have antecedents. A City Diary contact reports that Tony Hughes (below) newly-retired boss of Mitchells & Butlers restaurant division, used a similar phrase while running the TGI Friday chain for Whitbread, where Mark Derry, running the Loch Fyne chain for Greene King, used to work. Has it arrived with Mark?
probing provence
People who bought a pub from discredited pub company Provence have had a letter from the Disqualification Investigations Department of the Insolvency Service. Among the questions are: "Does Provence owe you money - [say] how much and dates of rent owed" and "Were you aware of a sub-lease on the property at time of purchase?" A former Provence investor tells City Diary: "The letter was accompanied by an authority from Provence's administrator Kroll to make available any information requested in the course of the investigation into the company." Watch this space.
Watch this space.
