Simon Collinson: the turn-around expert

By Phil Mellows

- Last updated on GMT

Related tags: Public house, Renting, Beer

Collinson: very specific about taking on sites
Collinson: very specific about taking on sites
Over two decades Oak Taverns has evolved a complex business model, managing, leasing and brewing. But it seems to work. Phil Mellows asks managing...

Over two decades Oak Taverns has evolved a complex business model, managing, leasing and brewing. But it seems to work. Phil Mellows asks managing director Simon Collinson how.

Nothing like a simple business model is there? Simon Collinson chuckles. "I don't think anyone will ever buy us out," he says. "They'll take one look at us and go 'whaaat?!'"

So pour yourself a drink, sit down and concentrate.

Oak Taverns consists of 37 pubs scattered across the southern half of England between Dorset and Norfolk. A dozen are owned freehold, the rest are leaseholds, 22 of them with Enterprise Inns.

Nine pubs are let out on three-year rolling tenancies, the remainder are directly managed. Three of the tenancies are run separately as a subsidiary called Recovery. Two of the managed houses are brewpubs and a joint venture with a finance firm, Downing Capital, under the Ridgeway umbrella.

"We're a mini-Marston's really," says Collinson, Oak Taverns' managing director. "We do everything."

But while for Marston's it's a carefully considered business model, with Oak Taverns it's just sort of evolved that way as, over the past

20 years, it's "ducked and dived and moved with the times", as Collinson puts it.

Like many independent pub companies, Oak Taverns was born out of the Beer Orders.

Collinson's father, Ian, worked for Whitbread for more than 25 years, starting

as a publican and ending as divisional director for East Anglia.

"He saw his opportunity, claimed redundancy and took two leased pubs with Whitbread Pub Partnerships," says Collinson junior. A few years later he went into partnership with Eddie Scott, a former Young's tenant and stocktaker, to form Park Taverns in East Anglia, again with Whitbread leases.

Park eventually merged with Oak, but Collinson senior and Scott, though officially retired, continue to look after the three Recovery tenancies in Norfolk.

"It's a way of keeping Eddie and my father out of trouble," explains Simon Collinson. "Recovery isn't a good name for it, really. They're decent pubs."

He joined the company 13 years ago.

"I wanted to work with my father from the start but he couldn't afford me. So I went to get some experience. Working for Gallo — selling Thunderbird wine to off-licences in east London — was as close as I could get."

After a stint with Grants of St James's he took a step nearer his goal by getting a job with Bedford brewer Charles Wells, getting its newly acquired Corona beer into London style bars.

"That was a great time. I was building a brand rather than selling a commodity. But I would have bitten your hand off for a job running pubs in Bedford.

"I knew exactly what I wanted to do. In the end I threatened to take a pub of my own.

"Father said: 'Woah' and then took me on at Oak Taverns."

Expansion

His arrival triggered expansion. "I was area manager for the six or seven pubs we had at that time and when I came in it gave us a chance to look at more opportunities.

"We started doing tenancies-at-will [TAW] at good pubs we were able to transfer onto substantive agreements. They were try-before-you-buy I suppose. But we're not a holding company. We only do TAWs with a view to signing substantive agreements."

Oak Taverns has established a strong reputation for turning round hard-to-let pubs and, while most of them have been with Enterprise, which took over the Whitbread leased business, it has also worked with Punch, Unique, Conquest Inns and JT Davies.

It currently operates pubs for Everards and Charles Wells.

"In the main pubcos come to us," says Collinson. "But we are very specific about what we'll take.

"They tend to be community, wet-led pubs, good pubs that fell down, so our business is very much about the quality of the people that run them. We take care of the paperwork, put in controls and allow the licensee to do what they do best.

"We've always had a good relationship with Enterprise. It sees us as a safe pair of hands for its bigger turnover sites.

"We're very much a family business. My father is still chairman, my brother David is finance director and our sister Emma does the marketing. It means decisions are made quicker, and perhaps that's something we don't shout enough about."

Community wet-led pubs are, as Collinson admits, "an expensive way to sell beer" when you take into account the traffic builders — entertainment, Sky Sports.

"You need to have a clear plan," he says. "We do it by driving margins, selling beers at the right prices and negotiating discounts."

Discounts

But is he able to get discounts out of the pubcos? He shrugs.

"It depends on which way the wind blows. Pubcos will look at only one pub at a time."

Even though Oak Taverns buys around 5,500 barrels a year through Enterprise and rent across the 22 sites is "astronomical", it's not fully treated as a multiple.

"We have a multiple account manager now but still have to deal with eight or nine different regional managers for rent reviews. The ethos is still based on Mr and Mrs operations because that's what the business model has been for hundreds of years, and it's not a quick fix to change that.

"I want to do more business with Enterprise but I've got to give them four different business plans and go through code-of-practice procedures every time I take a pub — as if I was a retiring policeman!

"There's one set of rules for everybody, and that's frustrating."

Deals for seven Enterprise pubs this year have seen him insist on traditional tenancies instead of leases.

"When a lease isn't working it's not easy to get rid of. We've had one or two we've kept operating for four or five years and they've not been worth the fixtures and fittings. So we're pursuing tenancy agreements now and it starts to rebalance the equation."

Freeholds are preferred where the pub is too far to manage from head office [in Thame, Oxfordshire], and the recruitment of an area manager has meant Collinson can spend time raising finance.

That led to the joint venture with Downing and the brewpubs. The company fell into brewing when it bought Tom Brown's in Dorchester, Dorset, which came with the Goldfinch Brewery.

Collinson thought that he could sell its beer around Thame. But he reckoned without distribution costs.

"It was nice to have a brewery but then I worked out the logistics and saw it was a very expensive way of doing it."

So that brewery is now owned by the tenant at Tom Brown's, Giles Smeath. But Collinson had got a taste for it. He bought a 'how-to-brew' book and installed a one-barrel plant at the Cross Keys in Thame — and a peculiar model for the business.

"Consistency is a nightmare with such a small plant so we got round that by brewing a special every time, everything from wheat beers to milds. People will come in especially for it and when it's run out they'll switch to one of the other seven microbrewery beers we have on handpump."

The ingenious solution was repeated at the Swan at Faringdon, Oxfordshire, and another pub,

the Half Moon in Bishop's Stortford, Hertfordshire, will be brewing by Christmas.

"We're thinking of an anti-establishment concept for it — like BrewDog."

Collinson continues to regard expansion of the estate as "a good option for us".

"Fifty sounds a nice number. But it's difficult to find the right sites and deals are not as generous as they used to be. And we want bigger turnover pubs now. We want to step up to the £20,000-a-week league. That's where we'd like to be."

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