City Diary - 7 August
Einhorn keeps up appearances
City Diary dropped an email to David Einhorn, the American investor publicly associated with short-selling, to ask him about his 9% stake in Punch Taverns. Is his buying of recent weeks an indication that he believes Punch stock is now good value? Polite people, those Americans. "I appreciate your reaching out to me," he replied. "I do not wish to discuss our investment in a public forum. If I can help in some other way, please let me know." City Diary, seeking to match Einhorn in the politeness stakes, wished Einhorn good luck with his investment. "Thanks — I might need it," he replied. What can he mean?
GK's safer route to success
Crash courses on safe driving led to a £150,000 drop last year in the cost of road crashes at Greene King. In the last four years more than 500 members of staff — HGV, LGV and company car drivers, as well as occasional pool car drivers and employees who drive their own car on business — have all completed individual three-hour driving assessments, courtesy of the company's driving safety advisor Paul Blackman. Greene King runs 271 company cars, within an overall fleet of almost 500 vehicles, including 95 drays. There was a 24% drop in the number of crashes involving staffers to 200 last year — that's just four a week now!
TCG proliferates to accumulate
TCG Acquisitions' plan to become as many as five separate legal entities is a novel response to trying times. It makes selling segments of the business easier, and may allow a neat division of freeholds and riskier leaseholds. As one of City Diary's contacts says: "No doubt one of the five will be labelled "Sh*tco"!"
Caution is the watchword
Who is in the market for freehold London pubs? Buyers are failing to bite as quickly on a clutch of six or seven put up for sale most recently by Mitchells & Butlers in the capital. While the group is due to exchange on the £2.5m Roebuck at Hampstead's Belsize Park, others such as the O'Neill's outlet, in Covent Garden, and the Market Tavern, in Shepherd Market, are proving harder to shift. The most aggressive acquirers of London freeholds in recent times — Young's and Capital — have adopted a more cautious approach, and Brockton Capital-backed Realpubs is thought to have shelved buying plans until next year. M&B has raised £83m so far this year from selling pubs.
Wine to die for at D'Arry's
For those who haven't had a chance to visit Greene King's whizzy new d'Arry's joint venture, in the Hampshire village of Kings Worthy, with former Mitchells & Butlers staffer Chris Gerard, City Diary provides a picture. Our picture is the front of a postcard that customers are encouraged to send to friends. The postcard states: "Dear (blank), I've discovered a fantastic new pub, they serve wonderful food from fresh ingredients and have wine to die for." City Diary thought it was the beer that was to die for at Greene King pubs.
Gutbuster tension mounts
City Diary sources report growing tension between the Whitbread operations teams of blockbuster all-you-can eat offer Taybarns, knocking out 6,000 covers a week, and Premier Inn, at the locations where they operate side-by-side. The Premier Inn guys keep moaning that the Taybarns offer is so successful that the car parks are permanently full, leaving lodge customers with nowhere to park their rep-wagons.
Sweeping solution
The Daily Telegraph letters page had a really lively cluster of epistles last Wednesday devoted to the ills of the pub sector. Amid a welter of the usual babble came one rather wonderful idea. George Copeland, of Hanslope, suggests: "Restrict all alcoholic drink sales to pubs. Enforce strict laws against pubs that serve under-age or drunk customers. Remove off-sales licences from supermarkets, garage forecourts and every corner shop in the country. This would revitalise pubs, make an impact on under-age drinking and help reclaim town centres from hooligans who scare away decent people at weekends." Nice.
Reflections in the pond
News from across the pond. Several high-profile American restaurant chains pulled down the shutters last week. The parent company of Bennigan's, an Irish-themed bar and grill with about 200 sites across the country, filed for bankruptcy. A sister brand, Steak & Ale, will also close. The closings are "something we're going to see more of in the next six to 12 months," said Amy Greene, an Avondale Partners director who tracks the restaurant industry. "The companies have been squeezed from all directions," she added. "Wages and commodity prices continue to go up." Sound familiar?
