The Big Interview: Alex Reilley, Loungers

If they love you, then you’re made,” says Loungers’ main man Alex Reilley. And the bar and restaurant company is
certainly well-loved by its customers.

As we sit in Loungers’ Cosy Club in Bath on a miserable foggy afternoon people are pouring through the doors, or rather up the stairs to the first-floor venue. It is Reilley’s reward for a skill he has been developing since the age of 18.

Academia’s loss was hospitality’s gain, as Reilley worked out early on that school wasn’t really his thing.

After achieving fairly disastrous A-level results, by his own admission, he took a year out and both he and his friend Jake Bishop started working at a Holiday Inn. The ‘function over enjoyment’ ethos of the hotel did not suit Reilley and he moved on to wait tables at the Case — a high-end restaurant and Champagne bar in Leicester city centre.

After some time travelling in Canada together, both boys started at the University of Northampton, which in Reilley’s words was “the only university that would have us”. Northampton’s generosity was ill-placed, however, as both boys decided additional schooling wasn’t the way to go and quit after five weeks.

“I went back to the Case in a serious capacity as a trainee manager,” says Reilley. “I wanted to learn all about food, wine and service. Even now, I owe a lot to my experiences back then.

“I loved working there. It was an exciting restaurant with great design and food, but I did think there must be more to life than Leicester. It was either going to be London or somewhere else, and we didn’t want to go to London. Someone said, ‘Bristol is a cool place’ and we set off on a recce to see what it was like.”

They liked it and got jobs at a bring-your-own group of restaurants, of which the main brand was Hullabaloo. There, Reilley and Bishop met Dave Reid. The three hit it off and the newcomers made a home for themselves on Reid’s dining-room floor for three months.

Reilley was operations manager at a 250-cover venue called Byzantium in Bristol and its three sister sites when Reid returned from travelling and had an idea — opening their own bar.

All three put up £10,000, some from the bank of mum and dad (Bishop) and they opened Lounge in Bedminster, Bristol.
Those familiar with Loungers will be amazed that the original business model did not include food. “At the time we were looking to do a bar,” says Reilley.

“We were sick of dealing with chefs. But an extraction fan was fitted and we thought we may as well do some food. It transpired to be a big happy accident.”

The business now runs at 50% food, 11% coffee and 39% drinks.

The first venue has since been extended twice. “There was no contingency for failure, we just didn’t consider it. Lounge took off straight away and is still very busy. We had some rough numbers down, but it just blew everything out of the water when it opened.”

Realising they were on to a good thing, the trio decided to expand. The owner of the Blue Goose, a sister site of Byzantium, made them three offers — they could have the lease for nothing for 25% of the business; £20,000 plus 10% equity of the business; or pay £40,000 and take it off his hands.

In the fashion of hedging a bet they took the middle offer. “It was the best deal he’s ever done,” jokes Reilley, as Loungers is now an £18m-a-year bus-iness. The second site became Tinto Lounge (tinto meaning ‘red’ in Spanish) on account of its décor.

Another Lounge was added each year until 2006. That year, with five sites in Bristol, they decided to take the brand further afield.

Lounges sprang up in Bath and Cardiff and in 2008 Reilley joined full-time as managing director and Bishop as operations manager.

“From the beginning of 2009 we spent 18 months fixing things and felt the business was becoming quite polished,” says Reilley.

“At the beginning we had talked about the prospect of recession setting in, knowing that we would have to deal with it when it happened. I think we have got the value-for-money aspect right, so that people use us more frequently.”

In 2010 the group faced a dilemma in that great sites were coming up in market towns, but they were not right for the Lounge model.
Discussions ranged over a number of options before a ‘eureka’ moment when viewing a site in Taunton, Somerset, and Cosy Club was born. The brand fills quirky, historical market-town buildings, such as the one in Stamford, Lincolnshire, which was previously a sorting office.

Reilley, who would choose to eat in a Cosy Club and drink in a Lounge, says the sites are “like our children”.

Originally, each Lounge’s name meant something, such as Tinto for ‘red’, but now it is a case of finding any decent word ending in ‘o’.
“It is a torturous process,” Reilley says, admitting that Loungers’ office has a resident Spanish dictionary, which the team regularly pores over for inspiration.

Reilley is particularly tickled with Pinto Lounge in Banbury, Oxfordshire, due to its Portuguese meaning — ‘little dick’.

From food having no place in Loungers’ model, it has become a major part. The menus change subtly every six months with a big focus on sharing plates at Cosy Clubs. At Loungers, tapas brings in 12% of food revenue and brunch accounts for 25%.

Around 180,000 Loungers 8oz burgers are sold every year. In fact, Reilley is meeting me fresh from a burger tasting. However, not every day as managing director is that much fun.

“Hard work is the way forward and our addiction is driving the business. About 90% of the time we are focused on the 10% of things that we want to improve. It is a great business, but if we stopped obsessing over the 10% it would soon become 20% and so on.

“What a customer wants is slightly different to two years ago — it’s a natural progression and so the biggest challenge is catering for that and keeping it fresh.”

The company has just secured £16m of funding from the Piper private-equity group, which valued the company at around £35m, and founder Crispin Tweddell will become its chairman.

Reilley described the deal as “a great cultural fit” and if the company was doing well before, there will be no stopping it now.
Further Lounges will open in Birmingham in May and Bournemouth later this year, plus Cosy Clubs are set for Salisbury in August, Cardiff in September and Exeter in November.

Reilley sees the Loungers brand climbing into the hundreds with a “fag packet” goal of 60 for Cosy Club and a total of 70 sites in the next five years.

For anyone feeling slightly inadequate, take solace in the fact that Reilley has yet to learn to drive.

My kind of pub​

“The Castle Inn in Bradford-on-Avon, Wiltshire, is a lovely pub. You feel cuddled when you walk in. But I have a vested interest in that, as it’s leased by Flatcappers.

"From an unbiased point of view I really like the Crown Inn in Churchill, Somerset. It’s like a derelict house, really simple and very run-down, but has fantastic, regularly-changing real ales, simple food and a great feel.”

Key dates​

1993​
Starts work at the Case Champagne bar in Leicester
1994​
Leaves university and returns to the Case

1996​
Moves to Bristol

2002​
Opens first Lounge in Bristol
2007​
Launches first sites out of Bristol — in Bath and Cardiff

2007​
Flatcappers forms, with Reilley as a non-executive director

2008​
Private-equity deal falls through, Reilley becomes MD

2010​
First Cosy Club opens in Taunton, Somerset
2012​
Piper invests £16m and Dave Reid leaves