Urban & Country Leisure to expand to 30 pubs

A pub operator headed by the former owner of Bar Room Bar, which collapsed into administration last year, is aiming to build its estate to 30 pubs as it plans a £10m investment programme over the next two years.

Ross Sanders, who is now managing director of Urban & Country Leisure (UCL), confirmed that the company would open 15 new pubs over the next 24 months, as it takes its estate to 27.

Sanders has been concentrating on the venture, which he set up in 2008, following the dramatic demise of Bar Room Bar Limited, a company he formed in 2007 to buy 16 sites from Orchid Group for £20m.

The heavily-leveraged venture collapsed just two years later when it failed to meet its monthly payments, leaving creditors – including Allied Irish Bank (AIB) and Scottish & Newcastle – owed almost £25m.

Orchid Group ended up buying back 10 of the bars it sold to the chain late last year.

“I came through the back of that a little scarred,” Sanders said. “The plan was to refurbish all 16 pubs but unfortunately we did the borrowing just at the height of the property boom and just before the collapse of Northern Rock. By the time we had refurbished and opened the fifth, we were delivering a 45% increase in revenue, while the projections on the business plan were 20%.

“But the bank put a stop on further roll-outs while they calculated what risks they had across the industry in general. Unfortunately, while those five pubs were performing very well, the others were very unloved. The bank decided that they wanted to pull the plug on Bar Room Bar and put it into administration.”

But Sanders now hopes for greater success with UCL, having learnt his lessons from the Bar Room Bar experience.
Three private investors, including serial entrepreneur and former owner of Thistle Hotels Andy Ruhan, have provided £10m worth of funding for the venture.

Ruhan bought Massive Pub Co’s estate of 36 pubs out of administration in 2008, with Sanders acting as a consultant.

“While managing those pubs for Andy we had a lot of opportunities put to us as a management company from various owners and landlords asking if we would take on leases ourselves for nil premiums. Having gone through the funding issues with AIB and seeing how the banking world was, taking on debt was not something that I or UCL wanted to do. But we are happy to form relationships with landlords if they were willing to invest in their own properties,” Sanders said.

The company took on two pubs from Enterprise straightaway and has now grown to 12, including the Greyhound in Finchampstead, Berkshire, and the Greedy Goose at Moreton in Marsh, Gloucestershire. It claims it has seen a 65% surge in food sales and 45% rise in drink sales across each of its pubs since Sanders introduced his “pub blueprint”: a system of identifying customer trends, careful choice of location, quality interior design and high food standards.

“Because we don’t have a board to report into and I don’t have a bank to answer to, decision making is quicker and easier,” Sanders said. “People want the luxuries of the gastropubs in terms of interior design, but they also want value for money. I can also take a view on margin, so whereas an industry gastropub would normally aim for a 68-70% gross profit on food, I am quite happy to take 65% or 66% which gives more value back to the customer and drives that mid-week trade.”

He has also encouraged the pubs to be more innovative with the services that they offer in order to build customer loyalty and boost sales. Initiatives include offering a take-away service. “In the Greyhound there is no Tesco or Sainsbury’s close by so we offer spit-roast chicken to go,” he said.

UCL is now targeting further openings in the Midlands and into the outskirts of London, all of which will follow Sanders’s “blueprint”.

“There is a lot of doom and gloom about in the pub sector – a lot of pubs are getting closed and the bigger landlords are making life tough. But there are a lot of opportunities,” Sanders said.

“We are a year into this, and we have a five-year business plan. If I can end up with 30 pubs with a good mixture of freeholds and leaseholds all under the same banner, that is where I would like to get to.”

Orchid buys 10 Bar Room Bars from administrators >>

Urban & Country Leisure adds Warwickshire pub to portfolio >>

Private equity firm buys Massive Pub Co >>


By Neil Gerrard

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