While much focus has been placed on the plight of the retail sector recently, it is easy to forget that other industries have suffered as a result of economic uncertainty. The local pub was once a cornerstone of British social life, but with the rate of closures at record levels, there are increasing calls for action to reverse this trend.
As a result, many independent and chain-owned pubs have now begun to branch out into other areas, serving products such as coffee and meals to diversify their attraction to a broad consumer base. This strategy has certainly worked for the Orchid group, which has been placed on the market by owner Deutsche Bank after posting a set of extremely positive results recently.
Deutsche Bank acquired the business – which controls an extensive range of brands including Dragon pubs, restaurant chain The Oriental Group and the Living Room and Bar Room Bar chains – in a debt-for-equity swap last year. After investing £50 million in the estate, leisure specialists Sapient have been called in to advise on what could prove to be a very profitable sale; Deutsche Bank have put the estate on the market for a cool £300 million.
Altogether, Orchid operates almost 300 premises in the UK and employs around 6,500 staff. While this is certainly a sizable challenge for an investor to take on, the recent upturn in consumer confidence could make this venture highly profitable; furthermore, Orchid’s most recent results hint at a bright future for the “posh nosh” group.
Thanks to the somewhat complicated administration process in which Deutsche Bank took over the running of the company, the most recent results available are those for the 2011 financial year. Sales climbed to £180 million, largely thanks to a food sales rise of 10 per cent, and commercial director Simon Dodd has hinted that performance within the company has further improved in the following years.
While no official statement was forthcoming, Mr Dodd was quoted as saying; “It shows what a joined-up strategy between operations, commercial and training can deliver.”
Orchid was formed by private equity firm GI Capital in 2006 in order to assist in the acquisition of a number of properties from pub chain Punch Tavern. After further expansion and taking over a number of small brands, Orchid was forced into a pre-pack administration in 2008, at which time Deutsche Bank became involved in the business.
By utilising the management skills of chief executive Rufus Hall, Deutsche Bank has taken the business from strength to strength, revealing a 3.5 per cent increase in like for like sales across its carvery pubs so far this year. With total food sales across the group up by 9.5 per cent in the same period, it certainly seems that the future is bright for this once-struggling pub and restaurant business.
Previous Post
Sheffield Retailers Celebrate First Summer Saturday
