Orchid Group, the managed operator led by Rufus Hall, has handed control of its 33-strong PBR Leisure (PBRL) division to the Avanti Capital-backed Eclectic Clubs & Bars.
Eclectic, which operates the Po Na Na and Lola Lo brands, has entered into a management contract to operate the PBRL sites, which includes the 14-strong Living Room premium bar and restaurant brand and 19 other bars, nightclubs and hotels operated under the Ultimate Leisure umbrella.
It is thought that the management agreement could be the prelude to a full takeover of the PBRL business, which is owned by a banking group led by RBS, by Eclectic.
Orchid had agreed to run the then 43-strong PBR estate under management for the group’s banks in 2009, after the business was placed into administration.
Earlier this year, Orchid completed a refinancing, with Deutsche Bank’s real estate arm becoming its sole backer through a debt-for-equity swap.
Chief executive Hall said that on the back of the refinancing the handing over of the PBRL management contract would allow the company to “concentrate all of our efforts solely on our core Orchid pub business”, which stands at c300 sites.
David Myers, chairman of PBRL, said: “Whilst it is generally recognised that the last few years have been very difficult for the UK hospitality sector, now is the right time to bring in the Eclectic team which has the specific expertise to drive both the Living Room and the Ultimate Leisure businesses forward.”
Reuben Harley, chief executive of Eclectic, said “We are delighted to be taking on this business which will bring the total number of sites we operate across the UK to almost 50.
“We see great opportunities in bringing our brand development expertise and service culture to the PBRL group and look forward to working alongside many excellent people within the current PBRL team.”
Eclectic has been looking to expand after reporting a 39% increase in site EBITDA to £2.5m for the six months to the end of 2011. Revenues climbed by over 30% to £10m and pre-tax profits grew from £200,000 to £1.1m.
In March an Eclectic spokesman told M&C Report that the firm is looking for new locations for Lola Lo in areas such as Guildford, Southampton, Exeter, Cardiff, Bristol, Cheltenham, Birmingham, Leicester, Loughborough, Nottingham, Liverpool, Leeds, Durham, York and Sheffield.
