Fat Cat: Creating a heritage brand

For the best part of 20 years Fat Cat Café Bars have been a feature of high streets around the country. Founder Matt Saunders talks to Phil Mellows about how the brand has survived and the group's gastropub ventures.

Nottingham's Fat Cat Café Bar is doing a steady lunchtime trade and it's easy to forget how long this brand has been around. There aren't many high-street concepts that have survived the turmoil of the past 20 years.

There are now 11 Fat Cats, a modest number perhaps, but an example of a remarkably resilient and reliable operation that continues to evolve.

Right now, for instance, it's the cask beer that's bothering Matt Saunders and he's up behind the bar finding out what's gone wrong with my imperfect pint of Castle

Rock Harvest Gold.

"We're going for Cask Marque and I want all the bars accredited by the end of the summer," he says.

Along with business partner Simon Patterson, Saunders opened the first Fat Cat in the unlikely location of Bangor, North Wales, in 1992, a fully-formed concept that was to find itself at the centre of the nineties boom on the high street.

"I'd been working in bars, Harry Smith's in St Albans and the Slug & Lettuce in Cirencester, during my degree and I really enjoyed it. They were my early inspirations. I wanted my own business and I knew that was what I wanted to do.

"I put together a business plan for a bar that attracted business people during the day and students at night — it was always called Fat Cat — and went looking for a site.

"My mother had moved to North Wales. I had no connection with Bangor apart from that, but I knew it was a small city with a big university and I knew what students wanted.

"Simon and I found an old, empty, greasy spoon and we clubbed together and spent £40,000 on a refit. Our expectations were low. If we took £5,000 a week we knew we could make money."

Expansion​

In fact, within 13 months the pair had made enough to open a second Fat Cat, in Chester.

"We were always keen to grow a brand and we tried to set the business up properly from the start. We were a limited company and copyrighted the name and logo."

Another thing they had on their side was Saunders' knack with magistrates.

"For the first 10 years we were converting showrooms, banks, cafes. New licences were like gold dust, but if I had a talent it was in being able to get across the message that a Fat Cat would be good for the town.

"We promised all-day food and table service when nobody else was doing that. The magistrates were almost disbelieving. They let us have a licence because they thought we'd soon get bored with it."

Pent-up demand​

It was when Labour came to office in 1997 with a policy of reinvigorating city centres that Saunders noticed new drinking circuits were springing up around him.

"There was a pent-up demand. Everyone rushed in and we went to over-supply very quickly, in about five years."

Standards dropped as bar owners competed for trade. Fat Cat employed a different tactic, introducing cocktails and moving upmarket to attract an older clientele.

"We never really had a problem with under-age drinkers," says Saunders. "Our prices are too high, the music isn't loud enough. It self-regulates. The only time we get under-age drinkers is on a police sting!"

It was in the heady days of the late '90s that he experimented with other brands, most notably creating Bluu, which he grew to four outlets before selling them to Marston's, along with a couple of Fat Cats, in 2006 for a handy £8.2m.

The focus returned to Fat Cat where Saunders continued the tradition of quality and service he believes has always set the brand apart.

"We've learned more about ourselves over the last two-and-a-half years. We've grown as a brand, we've matured without moving away from our principles.

"I think we've grown up with our customers. In 1992 they were 18-year-old students at Bangor University, and those people are still coming to us. They want a nice environment now and hopefully we provide it.

"Quality is incredibly high now compared to 1992," he goes on. "What we created then was rare. Now it's not. There are a hell of a lot of good operators out there. The choice is phenomenal.

"We occupy the upper-middle sector, aimed at the people who can afford to be choosy. There aren't too many pubs doing that on the high street, bars with a full table service.

Fat Cat culture​

Saunders agrees there is a Fat Cat culture. "It's based on service, the idea that if you exceed people's expectations they come back.

"We had an example recently where a woman came in and asked whether we could serve her a caesar salad while she had her hair done at the hairdressers across the road. The barman asked the head chef who gave the right answer — yes — but he should have been confident enough to say that himself. What could go wrong? She was hardly going to slip the plate into her bag.

"We want our people to agree to anything, as long as it's legal."

Like other high street operators, Fat Cat faced one of its biggest challenges when the recession began to bite a couple of years back.

"Group turnover was down 9% in 2009, and down 2% in 2010. So far this year we're plus 9%. We've had a nice little bounce since Christmas. People are going out a bit more after two years of austerity.

"It could also be because there's less competition, too, and because of what we did in those years. While everyone around was competing on price we held our nerve, which wasn't easy.

"It's food that's made the difference. That's been key to the bounce-back. Between 30% and 35% of our take is now food, and we've introduced a new menu which is much more restaurant style. It's 95% freshly produced so it's quite a gastropub offering really.

"Our offers are all food related or cocktail oriented, so we're at the 'desirable' end of the market," he continues. "Beer is priced at £3.25 a pint and upwards, which gives us leeway for one or two offers.

"Our clientele is not driven by price, though. We target a market that wants good value, not cheap. But everyone likes a deal on food and £10.95 for two courses has been a big driver for us."

Learning​

Saunders has learned a lot from his ventures into gastropubs. With Patterson, John Molnar, who was executive chef at Bluu, and entrepreneur Matt Cullen, he helped set up the Mole Face Pub Company.

"We've gone the tied route. We have four pubs in Nottinghamshire — two Punch and two Enterprise — it's a nice business." And in the last two years that experience has encouraged him to open three gastropubs, all leased from Punch, under the Fat Cat name: the Queens Head at Frodsham, Cheshire, the Crown Inn at Anstey, Leicestershire, and the Sir Henry Morgan at Rumney, Cardiff.

"It was common sense to lessen our reliance on the high street," explains Saunders. "And the pubcos have changed. Punch did the fit-out, we did the fixtures and fittings. It was low-risk and seemed ideal for us. We'll do more if the right sites come up."

And as trade picks up Saunders is giving "serious thought" once more to adding Fat Cats on the high street.

"We have two options," he says. "Organic expansion — where we'd be under no pressure — and finding a strategic partner with sites to suit our brand.

"The days of expanding by raising high bank debt is no longer an option. But we've got the management expertise and Fat Cat is a proven concept. We're a heritage brand now.

"Maybe a deal could be done."

Our kind of pub​

"On the high street Bluu was a fantastic night out around 2005-6. You know when something's right for its time.

"For a village local I go to the Wollaton, a Moleface pub, for Sunday lunch. It's got great food and it's always busy.

"The Jolly Sailor at Hemington, Derbyshire, a Greene King tenancy, is my local. I play for the village cricket team and we go there after the match."