The Big Interview: Clive Watson, City Pub Company

It took Clive Watson 30 years to get into Cambridge, but where his younger self failed after being rejected by the university’s top brass, the present-day Clive finally succeeded last year after acquiring the lease of the Mill pub from the university.

“We were shortlisted from 50 potential buyers and it involved being interviewed by a panel of dons, so it was great to get it,” he says. “I told them the story of me failing to get into Cambridge as a student and a little wry smile appeared on their faces, so I knew we had a chance.”

Hallmarks​

Watson is in sprightly form when we meet at the Phene pub, off King’s Road in Chelsea, south-west London, — famous as George Best’s favourite watering hole — which the company acquired earlier this year and is now its flagship site.

“We’re delighted to have the pub, it was unloved, but I could see the potential as it has a great history and is in a lovely area,” he says.

The Phene certainly has all the hallmarks of a pub run by Watson; thoughtfully and stylishly designed, great food, decent drinks range and situated in an affluent area. “But, in a way, anyone can buy a pub and do that,” he says. “For me, the most important thing is the staff.”

Watson’s views on the value of positive employee relations and engaged staff are well-known — for him they give the company a competitive advantage. “The big boys can try and replicate our offer, but what they can never do is replicate our passion.”

He has put in place a bonus structure where managers can earn up to 10% of the pub’s profit every month. All supervisory staff are also given share options after six months’ employment. “There aren’t many pub companies that give options to their staff — usually the directors keep hold of the goodies.

"So whatever happens in the future they will share in the success of the company,” he says.

Firepower​

Watson founded City Pub Company in late 2011, alongside pub industry veteran David Bruce and former Fuller’s managing director John Roberts. The company is actually split into two — East and West — each with its own management structure and chief executives.

So far, they have successfully attracted c.£18m from three rounds of fund-raising under the Enterprise Investment Scheme (EIS), and have just entered a fourth round for a further £10m of capital, to fund new sites.

“We’ve got 13 pubs at the moment and this funding, plus additional bank borrowing, gives us the firepower to comfortably get up to 20 pubs by the end of next year,” Watson predicts.

“This is assuming that sites of the right quality are available. I’d like to have at least two pubs in each city where we currently trade, so in Norwich, Oxford and Winchester [Hampshire], for example. Operationally, it makes life a lot easier for me as well.”

City was born almost immediately after Watson and Bruce sold Capital Pub Company to Greene King for £70m in July 2011.

“In a way we were stopped in our prime. If we were still an independent company now then I think we’d be trading well above the share price we sold to Greene King,” he says.

Progression​

Once the deal was completed, and after a certain amount of earache from his wife about finding something to do that would get him out the house, Watson decided to set up City as a new EIS company.

“I had already been thinking in the last days of Capital that there were opportunities outside London in places such as Oxford, Cambridge and Bath. That would have been a good progression for the company.

“So with the new venture we wanted to be in those places. In London, when you open a pub it can be great, but there are so many fledgling pub companies it’s very difficult to keep ahead of the game,” he says.

“If you go out to the provinces you don’t have that as there’s far less retail competition, but it can be difficult to find the right locations.

“We’ve been fortunate that we’ve managed to sneak in and snaffle these great sites.”

Influence​

Watson is keen to emphasise the role played by the company’s two new chief executives: Alex Derrick at City Pub Company West and Rupert Clark at City Pub Company East. He worked with both at Capital and feels they will bring a lot to the business.

“A year ago I was running around like a headless chicken; fundraising, hunting for properties, getting caught up in operations work, and it was getting quite tough. I knew I had to get some like-minded individuals on board and both Alex and Rupert wanted to work in an entrepreneurial environment again where they could have a lot of influence on the direction of the company,” he says.

“Both are extremely good operators and run the businesses as their own. It allows me to focus on other priorities and oversee the growing pains that you have as a business when you’re moving forward at such a fast rate.”

Watson, along with Bruce, has a formidable track record in creating and selling pub companies but — whatever the future holds for City Pub Company — he admits this will be his final venture. “This is the last one — that’s for definite.

“I know with Rupert and Alex that the business is in good hands so we can continue to grow. I hope it will last for a long time.”

Pub-bashing​

Watson would like a little more help from the Government in achieving that goal, in terms of a VAT cut on pub food and soft drinks. “Every industry says they want less taxation, but for me it’s about a level playing field with other industries,” he says.

And he’d like less pub-bashing by the press as he feels it needlessly damages the industry’s reputation.

“Quite often, in the newspapers, you see pubs getting the rap for drunkenness or antisocial behaviour, when it’s nothing to do with us. We get kicked unnecessarily and I think if people looked more closely at what good pubs do then it wouldn’t be like that,” he says. “Maybe that’s the industry’s fault for not getting the message across better.”

Made in Chelsea​

Of course, despite Clive’s successful career in the pub market, he’s not the most famous Watson in his family. His daughter, Lucy, is one of the stars of structured reality TV show Made In Chelsea, and she and fellow cast members can, from time to time, be found at the Phene.

Watson admits that the show is good publicity for the pub, but doesn’t let his daughter take advantage. “When I first bought this place, one of the cast said to Lucy that they should now get half-price food and drinks. So she asked and I said: ‘No, not a chance’.”

He admits he’s not an avid viewer, but tunes in occasionally to see what Lucy is up to. “When you actually watch the show it’s a lot tamer than you think, certainly tamer than Downton Abbey​ has been recently,” he says.

“I’m pleased for her, it’s what she wants to do and she enjoys it.”

Enjoyment certainly seems to be Watson’s watchword. “Whatever you do, make sure it’s fun. If you’re not enjoying it, you’re doing something wrong,” he says.

"Pubs should be fun — they’re where people relax and let their hair down. If it’s not fun, you’re probably in the wrong game."

Key dates​
1986​
Clive Watson qualifies as a chartered accountant
1990​
Joins Regent Inns, becoming finance director
1998​
Co-founds Tup Inns with Slug & Lettuce founder Hugh Corbett
1999​
Sells Tup Inns and sets up London-based pub company Bar & Kitchen
2001​
Forms Capital Pub Company with David Bruce
2008​
Becomes chief executive of Capital Pub Company
2011​
Sells Capital to Greene King for £70m
2012​
Sets up City Pub Company with David Bruce and John Roberts