CNBC Business | A REFRESHING CHANGE

A REFRESHING CHANGE

As other licensed premises go to the wall, one company is managing to buck the trend. Dominic Midgley discovers the secret behind Geronimo Inns’ success

Rupert Clevely really isn’t the sort of businessman who should have a smile on his face these days. As the founder of Geronimo Inns, he oversees a chain of 28 British pubs with 670 employees at a time when licensed premises in the UK are closing down at the rate of 50 per week. The smoking ban – introduced in the UK on 1 July 2007 – the credit crunch, and cheap booze in the supermarkets are just some of the factors that are making life difficult for landlords today. The smoking ban, for example, had a marked effect in the UK, with the number of pub closures leaping from 216 in 2006 to 1,409 in 2007 and 2,000 in 2008. This pattern has been repeated across Europe as nations have introduced bans on smoking in public places after Ireland started the trend in 2004. Even Spain is poised to introduce a ban this year despite vociferous protests from the hospitality sector.

But Clevely is bucking the trend. “We’ve had like-for-like growth every week in the last 18 months, except for one week in December when we had that really bad snow,” he says. Indeed, things have been going so well that Geronimo is one of the nominees for Pub Company of the Year for 2010 by trade bible The Publican.

So what’s the secret? “I wish I knew,” says the former global marketing director for champagne house Veuve Cliquot. “I don’t think there’s any real magic to it. The reality for us is that when we set up 15 years ago the idea was to come up with something for [my wife] Jo to do while I was away with Veuve Cliquot”.

“We both agreed that we wanted to run a pub that served restaurant-quality food, which was value for money. It’s a great concept for really good times and for really bad times.

‘I think I attribute our continued success to the fact that people haven’t got money for expensive restaurants but still want to have fun so they go to the pub once a week and have something to eat.’

The Clevelys may have gone into the pub business purely as a job-creation scheme for Mrs C but Rupert himself soon decided where the grass was greener.“I was travelling four to five days a week, every week, year in, year out, and had been doing it for 12 years,” he recalls. “At my 40th birthday party I sat on a bench in the garden and said to my wife, ‘I can’t do this any longer, I’m away from the kids all the time I’m not sure I want to be a corporate animal for the next 20 years of my life. There are still so many other things I want to achieve’.”

Clevely’s choice of company name was also inspired by this same sense of making a leap into the unknown. ‘Geronimo’ has long been the cry of every gung ho base jumper and snowboarder, and when he used to spend much of his spare time yacht racing, Geronimo was also the name of the boat with “the best music and the prettiest girls” which regularly beat his own. The connotations of success for the name that this created made him decide it was the perfect moniker for his new venture.

The group has grown rapidly since opening the Chelsea Ram in World’s End, west London, in 1995. Apart from outlets all over London from The Morgan Arms in the East End – the Evening Standard’s pub of the year in 2005 – to the Northcote in south London and The Kings Head in the north London, Geronimo now has pubs in Terminals 1, 3 and 5 at Heathrow and two country pubs in Surrey.

While many pub groups aim at uniformity of branding, Geronimo tailors each pub to the style and needs of its locality and puts a great emphasis on sourcing from local suppliers, whether they be a butcher, a baker, a garden designer or an artist. As the Geronimo website says, “Geronimo is not a brand or a chain, it is a seal of approval”.

One area where no one else gets a look in, however, is the wine list. This is the reserve of Rupert’s father John, who is a Master of Wine. And here again Geronimo’s radical approach shines through. Instead of selling a handful of wines by the glass, it offers no less than 20. Today, the company dreamed up on the Clevelys’ kitchen table all those years ago has a turnover of €25m a year but this growth has not been achieved without learning some harsh business lessons, admits Clevely.

“The first thing I’d say is that, if you have a great idea, do it as early in your life as possible because then you learn from your mistakes earlier,” he says. “I wish I’d started many years before I did.

“The second thing is that you can do all the research but you will know instinctively if something is right.

“The third thing is to get outside advice and support. Many would say that’s not important, but for us it’s been absolutely marvellous. We’d had no training in food and beverages and in many cases we took it and it’s been very good for us.”

One piece of advice that Clevely didn’t take came from Brian Stein, the South African-born entrepreneur behind London’s Maxwell’s restaurant group. “He said to me that the one thing you must do early is employ a full-time stock taker because you’ll find money going missing through poor stock management and thieving,” he says. “We didn’t do it. We used outsiders and when we did, five years in, our margins improved 3%–5%.”Pilfering in our business is absolutely huge. I’m not saying everyone we employ is a thief but it’s certainly not easy when you’re sitting there cashing up when you’ve taken £5,000, £3,000 of which is in cash.”

Apart from running its own pubs, Geronimo now manages a number of outlets for Tomahawk Pubs, an enterprise investment scheme vehicle founded in 2002. Clevely sits on the board, which includes Miles Templeman, a former managing director of Whitbread Beer, as chairman, and ex-Whitbread operations director Nigel Banks as chief executive. With company such as this, the former Champagne Charlie is clearly now a fully paid up member of the beer and sandwiches brigade.

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May 2010

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