Loungers could expand to 350 sites: There is potential for between 200 and 300 Lounges sites across the UK, Loungers founder Alex Reilley has told Morning Briefing. Reilley also believes Loungers can open between 50 and 60 Cosy Club sites in the UK. His comments come after private equity firm Piper Private Equity beat two other private equity firms to make a £16m investment in the business. Piper has bought a 43.5 per cent stake in Loungers, with Reilley and co-founder Jake Bishop still owning 50 per cent. The third co-founder, David Reid, will exit the business at the end of the year after consulting on the openings scheduled for the remainder of the year. The Piper deal values Loungers, founded ten years ago, at around £35m. Loungers, which operates 20 Lounges and three Cosy Clubs, plans to open a further 50 sites over the next three to five years. The company operates informal, neighbourhood all-day café-bars. Loungers co-founder Alex Reilley told Morning Briefing: “I have a list of 270 possible locations for Lounges - I think we can easily open around 300 Lounges locations with between 50 and 60 Cosy Club locations as well.” The investment in Loungers by Piper was concluded in just five weeks following an off-market approach – two other private equity firms also tabled bids after hearing about the Piper approach. Reilley said: “We first met Piper four years ago and have been impressed with the team’s continued support and interest in our business over the intervening period. We see Piper as a great cultural fit for us and very much like the company’s desire to understand our brand and customers and the driving forces behind our success, as well as its obvious commitment to work with us as partners who can add significant value to our business. We are all now focused on scaling the business and ensuring we build an outstanding business and brand legend.” The Loungers investment is the second sector deal by Piper in six months – it invested £8m in the Be At One bar cocktail chain towards the end of last year.

Propel Opinion by Paul Charity: Loungers proves there is life outside the capital. Its progress so far is reminiscent of the early period in the development of JD Wetherspoon. Loungers made a slow and careful start, converting unlicensed premises in secondary locations to its all-day trading concept, which benefits from a customer base with a broad demographic: coffee sales are 11 per cent of revenue; women account for 60 per cent of customers; and its “all-day brunch” menu segment produces 25 per cent of food sales. Overall, food sales are 50 per cent of turnover. Stonegate chairman Ian Payne has talked in the past about a 12 per cent rent to turnover percentage as a fulcrum point – the lower your rent to turnover percentage (RTTP) below 12 per cent, the more money you will make from leasehold sites. By dint of careful site selection and an offer with broad appeal across the day parts, Loungers has one of the lowest RTTPs in the sector with a company-wide average of 4.5 per cent. Loungers venues are a genre-busting evolution of traditional templates – they occupy a space that lies somewhere between pub, café and restaurant. The company now operates a second brand, Cosy Club, that proves the founders’ versatility. The first three Cosy sites take an average of £22,000 per week - compared to £13,000 per week at Lounge venues - thanks to larger trading areas. Site Ebitda before central overheads is around £160,000 per annum each for Lounge venues and £235,000 for Cosy sites – the company targets 30 per cent return on investment but has been achieving around 40 per cent. One of the most recent openings, the Cosy Club in the former post office in Stamford, saw the company beat off competition from the aforementioned JD Wetherspoon and Carluccio’s - the landlord clearly preferring Loungers characterful offer. Like JD Wetherspoon in the early 1990s and during the current downturn, Loungers has had the confidence in the strength of its retail offer to take advantage of depressed property prices to accelerate openings in the past two or three years. It’s clear that the Loungers founders now want to build a very large business – and are very well-placed to do so. Its growing confidence is evident in more ambitious openings. A forthcoming Cosy Club opening in Cardiff’s St David’s shopping centre in September will span 7,300 square feet and be the largest yet to open.

Design guru Howard Saunders added to ALMR 20th anniversary speaker list: Howard Saunders, former creative director of design consultancy Fitch & Company, has been added to the list of speakers for the ALMR anniversary business day on Thursday 3 May. Saunders has been responsible for retail design and branding for many UK high street brands. In 1997, Howard formed Echochamber, an agency that travels the world tracking and analysing design trends. The company’s website, echochamber.com, which provides a free overview of the latest in store design across the world, is visited regularly by more than 25,000 designers and retailers internationally. Other speakers include: JD Wetherspoon founder Tim Martin, Mitchells & Butlers executive chairman Bob Ivell, Punch Taverns chief executive Roger Whiteside and Stonegate Pub Company chairman Ian Payne. Ring Lesley Cuggy on (0208) 5792080 to book a ticket or e-mail her on lcuggy@almr.org.uk.

Drinks manufacturers want minimum price “sunset clause”: Drinks manufacturers are likely to press for a “sunset clause” on minimum price legislation. The clause would mean that minimum pricing legislation on alcohol is scrapped if it is proven not to work. The Scottish Conservative Party dropped opposition to minimum pricing in Scotland last month after negotiating a five-year sunset clause.

Petrol price rises hit consumers: Consumers in the UK are cutting back on spending as a result of record petrol prices. A MasterCard survey found that spending in March, excluding petrol, rose by 0.8 per cent, less than inflation. Petrol prices in March were 9.8 per cent higher than a year before but thrifty motorists contained their spending on petrol to only 1.2 per cent more by leaving their cars in the garage. 

Demand for shop space falls again: The demand for retail space suffered a further fall in the first quarter of 2012. The latest survey by the Royal Institution of Chartered Surveyors showed a total of 11 per cent more property agents reporting a fall in interest from retailers rather than a rise. The declining demand is in contrast to the record number of empty shops. Prime shops are still being let but at reduced rental levels and with more incentives.

Mitchells & Butlers chief executive search down to two candidates: The year-long search for a permanent chief executive for Mitchells & Butlers is down to two candidates, according to the Daily Telegraph. The two candidates on the company’s short-list are thought to be from outside the sector. One source told the newspaper: “It’s not going to be a chief executive from another big pub company coming in to run this pub company.” M&B has previously denied approaching Spirit Pub Company boss Mike Tye and Fuller’s Simon Emeny in relation to the job. Recently asked about whether he had been approached about the job, Tye said: “Everyone knows the score.”

Pheonix Nights club faces closure: The club used for filming of Peter Kay’s Pheonix Nights is under threat of closure by way of licence review after complaints of anti-social behaviour and under-age drinking. Council officials have written to St Gregory’s Social Club complaining about “large groups of youths getting drunk and fighting”. 

Bakers warn hot cross buns could be hit by VAT change: Bakers have warned that the proposed 20 per cent VAT rate will hit items like hot cross buns and mince pies served hot from ovens. A spokesperson for the National Association of Master Bakers said: “Smaller bakers around the country have no idea what will be hit by this tax or how they are meant to work out what the ambient temperature is.”

Licensee warns of lay-about culture: Licensee Janette Harrop, who runs The Old Original in Oldham, has highlighted problems in recruiting motivated young staff. She has been looking to recruit a trainee chef for six months. “We’ve had about 30 people apply but barely half of these turn up for interviews. They’re full of enthusiasm over the phone and then they don’t bother turning up. Some of them ask you for a trial and they start off okay but then they just let you down. Some youngsters are only too keen to stay in bed because they have been enjoying themselves the night before. I think we spoil our children now. In our day we had to do paper rounds or milk rounds – you got yourself prepared for work.”

Newcastle introduces saturation zone: Newcastle Council has introduced a saturation zone in the Times Square area, where police say they have dealt with some 2,000 incidents in the past three years. The zone will include Newcastle’s Digital, as well as the ‘Pink Triangle’ area, Marlborough Crescent and Westmorland Road and will mean applications for clubs and pubs can be turned down. The policy will be reviewed after a year.

Case against McDonald’s toys giveaway dismissed: McDonald’s has been given the green light to continue to use toys to market its Happy Meals in the US after a lawsuit against the food chain was dismissed by a judge. The lawsuit was brought against McDonald’s in California by a mother who claims that the restaurant unfairly uses toys to attract children. She was backed by the US Center for Science in the Public Interest (CSPI), which wanted to force McDonald’s to stop giving away free toys with the children’s meals.

Lap-dancing business Stringfellows reports strong trading year: The company that runs Stringfellow’s nightclub and Peter Stringfellow’s Angels, in Soho’s Wardour Street, has reported turnover rose from £8,711,691 to £9,434,580 in the most recent year to 30 June 2011. Pre-tax profit for the year was £480,096 compared to £702,811 the year before, when profit was boosted by the disposal of a subsidiary for £588,438. The company stated in a Companies House filing: “Group turnover and gross profit has increased during the year and the directors are confident that if the economic state of the country does not deteriorate this will continue.” The highest paid director earned £298,069. The company has £3,281,293 in cash at the bank.

Pret a Manger unveils school leavers scheme: Pret A Manger has launched a new job scheme for London school leavers after bosses admitted they needed to do more to attract British staff. It is launching the programme at five schools in July to attract students with paid apprenticeships leading to managerial positions. Andrea Wareham, the company’s HR manager, said that if the scheme is successful the scheme will be rolled out nationally next year and that 16-year-olds would be accepted as well as older school leavers looking for a “great alternative” to university. New recruits will start on £6.40 an hour and will be given classroom teaching and hands-on shop-floor experience with the prospect of becoming assistant store managers on more than £27,000 within three years of signing up. Pret has faced criticism that it’s not hiring enough British staff.

Brasserie Bar Company secures new £6m facility: Brasserie Bar Company, the restaurant chain led by Mark Derry, has secured a new £6m facility from Barclays Bank that will allow the company to expand. The company, which recently acquired eight former Chez Gerard sites, has plans to expand from its current 11 sites to 19 by the end of 2012 and a total of 40 by 2016. 

Starbucks to open 11 coffee shops 24 hours-a-day during the Olympics: Starbucks has applied to councils for licences to open 11 coffee shops around the clock for the Olympics. Kris Engskov, Starbucks managing director for Great Britain, told The Times: “We think it’s a great opportunity to show off what Starbucks does best as the world comes to visit. We want to be part of the London welcoming committee.”

Entrepreneur re-opens restaurant as steak pub: Businessman Matthew Chapman has re-opened the former Thyme restaurant, closed since January 2011, as The Sirloin Inn in Hoghton. Legend has it King James I knighted a joint of beef at the venue, creating the iconic meat dish. Chapman also runs The Strawbury Duck at Entwistle. As well as the eponymous steak, sourced from Aberdeen Angus and Hereford breeds, Chapman said the inn would also serve up other locally sourced specialities. He said: “We farm our own Saddleback pigs which are reared a few miles away. Although our pork is fattier than standard pork I believe the taste is far superior.”

Wildwood to open in Market Harborough: Tasty, the AIM-listed restaurant company that operates the Dimt and Wildwood brands, is to open its thirteenth Wildwood site in Market Harborough at the end of this month. The brand, which serves pastas, pizzas and grills, will open at the former White Lion in High Street.

Mitchells & Butlers hires PR agency to promote Vintage Inns: Mitchells & Butlers has hired PR and marketing agency Seal to help make 2012 a ‘Vintage Summer’. It is hoping its traditional offering of “real ale, hearty food and beautifully kept beer gardens” will strike a chord with consumers’ affection for Britishness in a year that sees the Queen’s Diamond Jubilee and the Olympics. Seal’s campaign will showcase ‘the best of Britain’ around the pub locations, as well as the pubs themselves.

Bill’s set to open in Cardiff: Bill’s Produce and Grocery Store is tipped to take a site in the city’s Wyndham Centre. Under the plans, Bill’s Produce will span more than 3,000 square feet and take over 12 units in the city centre’s shopping arcade and open after a £500,000 investment.

John Clare Trust buys pub: The John Clare Trust, chaired by Labour MP Barry Sheerman, has bought The Exeter Arms, in Helpston, Cambridgeshire and plans to turn it into an educational centre. “This pub will be the base for every child’s right to the English countryside,” Sheerman said. It is currently shut, and will be so for at least two more months. Whether it functions as a pub when it reopens remains uncertain. “We can use it only for purposes in line with our aims as an educational trust,” the MP said. The trust is about to begin an extensive consultation with the villagers over the future of the pub. “It might be that we can get something like a Jamie Oliver Fifteen style restaurant going, getting young people to learn the skills of the leisure trade,” he added.

Charles Wells places Cranfield pub on the market: Bedford-based brewer and retailer Charles Wells is to sell The Carpenters Arms in Cranfield. Richard Burt, commercial and property director of Charles Wells, said that closing any pub was not a decision it took lightly. He added: “Despite the enthusiasm of much of the community to support (landlord) James (Shanks) and the pub, we’ve reluctantly concluded that it cannot meet the necessary levels of business to thrive within our business model.”