UCL reverses pub expansion plan to fund Lazy Cow hotels
Urban & Country Leisure (UCL) has reversed a £15m plan to expand its pubs business, which it announced last year, based on its predictions of continued difficulties for the country pub market in 2011/12.
The company, which has 14 country pubs-restaurants, had originally announced plans to expand to almost 30 pubs.
But follow a strategic review, the Midlands-based company run by former Bar Room Bar owner Ross Sanders (pictured) said it planned to "redirect and increase" funding originally destined for the pubs to its "The Lazy Cow" hotel and restaurant blueprint.
UCL now plans to invest £20m in The Lazy Cow and said it was seeking sites in major cities and market towns throughout the UK, including Bath, Cheltenham, Gloucester, Solihull, Newbury, Poole, Lincoln and Henley on Thames.
The first Lazy Cow hotel and restaurant opened in November 2010 in Warwick after UCL spent £1.5m transforming the former Globe Hotel into a 16-bedroom boutique hotel and restaurant, recruiting head chef David Philpot, who was previously senior chef at London eateries Le Caprice and the Ivy and head chef at Soho House in New York.
The company said the Warwick unit was consistently 97% over its weekly budget and for the nine-week period sine opening was £100,000 over its trading budget. Takings have been in excess of £50,000 per week with further room for growth in its room occupancy.
Funding for the expansion will come through private investment raised through its joint venture with Innventive Property Holdings, chaired by former investment banker Sir Aubrey Brocklebank.
Commenting on the expansion plans and strategic review, Sanders said: "We are delighted with the trading results for The Lazy Cow at Warwick. Despite the continuing tough economic trading conditions and the recent severe weather, these results far exceeded our budgets and expectations.
"While our expansion plans will be aggressive with the TLC brand, we will be following a much slower and more cautious acquisition policy for other country pub-restaurants in the 2011/2012 trading period, focusing on more intense and detailed viability on the demographics. We predict a much slower growth in this sector based on the tough trading conditions, which we see continuing through until 2012. Increased VAT will have an impact on people's leisure and hospitality spend, along with the "ripple effect" of such things as fuel costs and travelling to out-of-town country pub destinations. The country pub restaurants that will not suffer will be the ones who have a strong local community supporting them and those who are not dependent on travelling footfall and trade. We believe that the stronger performance will come from brands with a quality offering in towns and cities locations."
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By Neil Gerrard
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