A while after his interview, Ian Edward gets in touch in the hope that it won’t sound like a Harry Enfield rant. I’d call it passion, I reassure him. But there’s no doubt that he has opinions about the way things should be, opinions that come across loud and clear. And why shouldn’t he?
People listen to Edward. The right people. Since striking out on his own in 1994, he’s become one of the most respected advisors in the industry, and he’s done that not just by punching a calculator in a lofty office but by getting out into the trade and finding out what’s working and what’s not.
“My job is bound up with numbers and returns, but the customer experience is so important,” he says. “I look at things first and foremost from a customer’s perspective.
“You have to ask yourself, why have I just paid £7.80 for two pints? It’s because the pub is doing it right by customers. For a lot of pubs, though, that’s where it all breaks down — and customers are not stupid.
“I get out into the trade a lot. I go and meet people. If you don’t do that you don’t know what’s happening. The greatest lesson is that this business doesn’t go in straight lines. You don’t know what might come out of a meeting.
“I saw a top-quality operator yesterday who thought pubs with two entrances could split into a pub and bookmaker. It’s a really interesting idea, particularly in a lot of difficult locations with a ‘bookie-type demographic’. Having put your bet on next door you could watch the race in the bar with a pint.”
It’s plain that Edward is more than a money man. His fondness for the industry is genuine. After starting in corporate finance, moving between New York, Frankfurt and London, his first leisure deal came in 1988, when he helped sell brewer Greenall Whitley’s bingo business to Rank. “I thought then, I love this business. Would I rather be doing this or chemical plants in Darlington? This is the one for me. I want to work in a business I enjoy.
“This is a great sector to be in. The City doesn’t appreciate it. People work their socks off and deserve respect for that. Treating them like a number isn’t good enough.
“The City has a lot to answer for,” he adds. “It’s taken billions out of the sector. It’s fine when it invests in a company, but securitisation is a good way of taking out a lot of money and putting nothing back in, and that’s a great shame.”
“The pubcos have responsibilities too though. In too many cases tenanted pubcos have put into pubs licensees who are woefully underskilled to do what the job demands. Too many times you’ll see a pub fail and you’ll not be surprised. “We’ve got into this situation and it’s not going to be easy to get out of it. My feeling is that Enterprise may see Punch off. But how many people has it got to service 6,000 pubs?
"Companies with a managed estate like Marston’s and Greene King are better equipped and they’re doing a good job. As are all regional brewers.
They may be slow at decision-making and their decisions may be low-risk, but because they are owners of the business, because they are its custodians, they’re defending long-term interests.
“You wouldn’t have thought they’d survive the Beer Orders, but they’re still here because they care about what they’ve got, and their customers care about them too.
“There’s not enough innovation though,” he adds. “There’s not enough money in the pub sector to enable operators to invest properly. It’s a real issue — so much over-leveraging and so much under-investment.
“London is an exception, it’s still improving — and in the north-west Living Ventures’ Tim Bacon is a great innovator. But there’s not enough of it across the UK and customers are raising the standards they expect all the time.
“It doesn’t mean you have to sell food,” he adds. “I’ve worked with B@1 and you can’t get so much as a packet of crisps in its bars, but you don’t care because the atmosphere is so good it’s like going to a party.
“You’ve got customers in competition at a busy bar and that could be a bad experience, but a B@1 bartender knows they need to make eye contact immediately and place you in the queue. They have taken a negative and turned it into a positive. It’s brilliant. So simple. The lesson is, whatever you do, do it well.”
For Edward it comes down to a deceptively obvious retail principle: knowing your customers and knowing what they are looking for.
“It sounds simple but it’s really difficult to deliver — and you have to deliver it in a way that makes money. If a pub’s working on 55% GP it’s death by a thousand cuts. The pub gets no investment and you know it’s going down. I’ve seen that happen for years.”
But Edward isn’t one of those who’s mourning the loss of pubs. “It’s a terrible thing to say, but we need more pub closures,” he says. “To talk about pubs closing completely misses the point. Pubco bosses don’t think like that. They want other pubs to go bust, so they can invest in their own pubs. It’s basic business economics.
“I’d rather see 30,000 properly invested and well-run pubs, and I think that will be enough from the customers’ point of view. We need properly-invested pubs with good people running them.”
At the same time, he appreciates that pubs often operate at a disadvantage in the wider world. He agrees that “it must be wrong for supermarkets to sell alcohol under cost price”. But he contrasts the “superb” way in which supermarkets are able to make their case to the Government with the pub industry’s efforts.
“The pub industry doesn’t know how to play that game, it hasn’t worked out how to lobby the Government. There are too many different people wanting different things.
“Yet everyone loves pubs. That’s an enormous Marks & Spencer-style advantage, and that positive feeling is a good place to start. One way or another we have to think more long-term, we have to make it attractive for the Government to help the pub industry. And we need one clear message.
“Perhaps we could say to ministers — ‘you want a community hub, the pub could be that, so you should support us’. If that was the general impetus of the industry’s campaign, and not tax and pub closures, I think that in 40 or 50 years pubs could be equipped to do everything for a community.
“It could be very interesting,” he reflects. “We’re moving towards pubs taking more of a role in communities but it’s too bloody slow. Yes, I can see how I’d like this to end. The question is, though, how do we get there?”
Ian Edward graduates from Oxford with a degree in modern languages and launches a career in finance with the Bankers Trust Company of New York
Joins private-equity firm County Development Capital, now Bridgepoint
Assistant director, County NatWest
Completes first leisure deal, selling Greenall Whitley’s bingo business to Rank
Director of corporate finance for Charterhouse Bank
Establishes his own firm, Edward Associates, specialising in the leisure sector
Becomes non-executive director for venture capitalist Duke Street Capital
Pub group SFI sold to R20
Appointed to the board of Geronimo Inns
Oversees sale of Geronimo to Young’s
Joins board of Brasserie Blanc