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Business Profile: Rupert Clevely of Geronimo Inns

By Paul Wootton , 05-Nov-2009

Geronimo Inns has eschewed a one-size-fits-all approach to pubs, opting instead to tailor each of its 28 sites to its location. And it's working, according to its founder Rupert Clevely

Geronimo Inns has eschewed a one-size-fits-all approach to pubs, opting instead to tailor each of its 28 sites to its location. And it’s working, according to its founder Rupert Clevely.

 

If you go and look at pubs for sale, invariably the standards and quality are absolutely diabolical. They’re underinvested, the staff are unfriendly, the food is deep frozen. They’re a disgrace.” Rupert Clevely, the founder of Geronimo Inns, is explaining in his refreshingly no-nonsense style just why he got into the pub business. He freely admits that neither he nor his wife knew anything about pubs or restaurants before they opened the Chelsea Ram in 1995. But he saw clearly that there was an opportunity for pubs to up their game.

 

From the start, Geronimo’s business success was built on taking underperforming pubs and making them perform well – by improving standards and exceeding customer expectations. Those expectations may have risen during the past decade, mainly thanks to the work of companies such as Geronimo, but 14 years ago, a clean, friendly pub offering a nice glass of wine and a decent lamb shank was something of a revelation.

 

Even now, Clevely believes good opportunities still exist in this market. Which is why Geronimo was in the news recently, when Clevely snapped up six pubs from Punch, growing Geronimo’s business instantly by about 30 per cent.

 

“To say the sites we’ve bought from Punch are underperforming is probably a bit unfair. For Punch they were probably performing, but Punch can drive a better percentage margin than us, probably by being tighter on wages and controls, and by having better liquor margins, naturally. But in terms of customer sex appeal and enjoyment, we deliver a whole new experience,” he explains.

 

“I’m not in any way denigrating what Punch do – it’s just that we’re different and our standards are on another level.”

 

When you realise how different Geronimo is to many of the companies operating in the pub market, you understand why it’s done so well. Much of the pub industry just hasn’t got its act together, Clevely suggests. And he has little sympathy for those operators who whinge about the sorry state of the market, particularly those blaming their woes on the smoking ban.

 

“Large pub companies should have seen it coming,” he says. “We are where we are. This is the state of the nation today and we have to run our business accordingly. If we just sit back and open our doors and don’t deliver a good offer, then we deserve to go down in flames.”

 

Clevely, who held senior positions at Veuve Clicquot prior to entering the pub trade, takes a fairly dispassionate view of the changing industry landscape. “We talk about 50 pubs closing a week. The reality is there are 60,000 pubs in England. There should probably only be 25,000 because most of them don’t meet the needs of the current economy. In the past, there wasn’t a Caffè Nero, a Nando’s, a Carluccio’s. Now there are. If we don’t get our act together and sort out the pubs, why will people want to go to them?”

 

While Clevely claims creating a great pub is “not rocket science”, the Geronimo ‘formula’ – based on humour, individuality, homeliness and a very good food offering – is delivered very effectively. “This business is detail,” he states, pointing out the menus on the tables, the blackboards, the lightbulbs, the custard-pie picture on the wall.

 

But Geronimo’s success is also the result of adapting each pub to its location. This is not a one-concept-fits-all approach. At The Northcote, in Battersea, for example, one of Geronimo’s six new additions, Clevely accepts food will play a much smaller role than in some of his other venues. “This was a blue-collar pub,” he says. “That’s not really our style, but we don’t want to lose those customers. Some operators that had delivered a brilliant gastropub in Chelsea would have tried the same thing here and spent a fortune on two chefs, and it’s not what people want from this pub.”

 

Clevely stresses, however, that “food will be a key part of our business in every pub” – and all of it will be freshly cooked too. But while a pub such as The Prince Albert, also in Battersea, will do £10-£12k a week on food (about 45 per cent of its turnover), the Northcote will probably turn over £3k a week on food and bring in £17k from wet sales.

 

This bespoke approach – one of Geronimo’s greatest strengths – is where its operation differs considerably from rolling out a restaurant chain. While that might make expansion trickier, Clevely claims that, providing his team understands each new location, they’re more likely “to get it right”.

 

Growing from 21 to 27 sites, with all six additions opening within two months, will clearly put some strain on the business. Moreover, Geronimo is scheduled to open its 28th site, The Bull in Westfield, later this month. Clevely recognises that maintaining quality across a larger portfolio will be a big challenge. “It’s easy to grow but the key thing is how to make sure the quality is there in every single site,” he confides.

 

The business, he adds, will have to evolve to meet that challenge. “We need to get more structured, have more controls and more systems. If you’re off by half a percent on your margins, now with a turnover of £35m going forward, that’s more than £150k.”

 

Still, he’s positive that changes already made to the business this year will stand it in good stead as it moves forward. Most important of all, he reckons, are improvements made to the way the company communicates internally. Clevely has never liked meetings and reckons that, as a company, Geronimo avoided having them. When it did have them, he says, they would go on forever. So now the executive, which is made up of six or seven people, all dial in to a conference call every day at the rather quirky time of 10.46 exactly, for just 10 minutes. Issues are raised and dealt with, or resolved later individually. Problem sites are always discussed in this call. Back in January, before this new era of communication, there were five pubs on the ‘difficult’ list. Now there’s just one.

 

“It’s the best thing we’ve ever done,” says Clevely of the daily call. “It’s allowed us to grow.”

 

There will be further growth, Clevely promises, but not in the immediate future. “We’ve just bought – by the time we refurbish – £10m worth of sites, so we haven’t got a deep war chest with which to go shopping anymore. I don’t think that’s actually a problem. Expansion is not key. What we want to do is get these six sites and the rest of our business working really, really, really well. By that time the markets will have freed up and we’ll be able to raise more money. So let’s not worry about that now – let’s run a bloody good business. Let’s make sure the sites deliver the right level of profitability and make sure we’ve got lots of happy customers.”

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