Toby Smith left Stonegate Pub Company looking for a new challenge. In taking the top seat at Novus Leisure he has certainly chosen one, but he tells Mark Wingett that he has a strong base on which to build and a new format that he believes could be a phenomenal success

If I could pinpoint a key point when alarm bells started to ring in regards to the health of Novus Leisure it would be the start of 2013. Granted there had been rumblings during the second half of 2012 that all was not well following the £100m management buyout of the business backed by LGV Capital and Hutton Collins, but that could be put down to teething problems between new owners and an evolving operational team.

No, it was the lack of communication after the festive season that year that increased the sense all was not as it should be. Before then, the release of figures highlighting the strong performance of the group’s flagship brand Tiger Tiger, and indeed its website Tiger Tiger Haymarket, had come through like clockwork. Then, silence.

Nearly two years on, and two management changes later, Toby Smith, the former chief executive of Stonegate Pub Company, has just overseen his first Christmas at the 45-strong group after joining the company in October last year.

Smith says: “I walked in the door and everyone talked about Christmas. I have been in this sector for more than 20 years so I know Christmas is big but they were like, ‘Toby you don’t understand, this is another level’. The big thing in that period was getting some momentum in the business. I’m a great believer in momentum. We delivered a good Halloween, excellent growth that week, engaged the team around Christmas. We had a strong Christmas and a good December. It was a real shot in the arm.

“During Christmas week our average site was doing more than £120,000 net a week. That’s when you know you are in a different scale of business you’ve previously been involved in, and there has to be a more nuanced approach. But it is not all about Christmas; week in week out, our average delivery size is five times a normal drop for Matthew Clark. We also have postcodes to die for in terms of suppliers looking to test new products.”

Looking for clarity

Smith admits there was a period of change through the business from 2012 onwards “at all levels”. “The business was looking for clarity. My challenge was to bring that clarity,” says Smith. “There is a tacit understanding of what this business is: a premium bar and nightclub business. Our food sales might be low in percentage terms, but that’s because the absolute turnover of our individual sites is miles higher than anyone else. For example, you wouldn’t say Tiger Tiger was a food business, but there are not many businesses in December doing £60,000 a week on food. It might well be that it does north of £350,000 a week and only 18% is food, but could you say it’s not a food business? You have to get that balance.”

The other key point for Smith was understanding the group’s strengths, one of which is “iconic locations with late licences”. He says: “We have significant square footage and real estate, which we need to fill all day. You couldn’t put this estate together. Someone could buy this estate, but you couldn’t come to London now and put together more than 20 sites with 3am licences. And it is not going to happen again, the local authorities and police are not going to grant new 3am licences. There is an element of understanding that, putting some clarity around it and playing to our strengths.”

The London expert

The company’s current estate comprises eights Balls Brothers units, eight Tiger Tigers, 22 landmark clubs, with the balance made up of its former Lewis & Clarke sites. There have been disposals, the most high profile of which was the sale of the group’s Long Acre site to Five Guys. Smith says: “There has to be a dynamic nature to your property portfolio, you have to look at the new as well as managing your current estate. We are a London operator with iconic regional sites. We have the opportunity to be the London expert. We have a terrific site in Manchester, but with all

the will in the world, we are not going to be the Manchester expert.

“In the first instance the plan is focused on the current estate, but I am also set to look at a new site soon. So you have that growth element as well. If the right site comes up, we need to be acquisitive and not miss opportunities. We are going to invest across all our trading platforms this year. Between now and Halloween, we are looking at investing around £3m-£4m in 10 or 11 schemes. In there will be a couple of sparkles, and when we get to the Tigers we will invest more.”

Smith says the group’s Balls Brothers is “really important to us because it helps us shape our food and drink offer, particularly around wine”. “We have a better wine portfolio across the whole estate because we own Balls Brothers. We are doing some work now that we will roll out over the spring where we are going to add in our expertise around gin and whisky as categories. The format can slightly stretch its parameters to be somewhere you can get fantastic wine, but also somewhere people can be educated around the drinks range.”

Smith says there are a few things coming the company’s way that will “change the face of the business a little bit”. He says: “We are looking forward to the 24-hour Tube, although we don’t as yet know entirely how that will pan out nor can we put a number on it. In terms of a business that is best placed to take advantage of that change, someone who has 22 3am licences in London certainly has a smile on their face!”

An exciting concept

This last point leads Smith to discuss Mabel’s, a new neighbourhood bar format that opened on its Jewel site in Covent Garden last month. Smith says: “Old-fashioned female name, a bit of fun, bit of personality, a premium bar that does terrific food. None of the component parts going into the format exist in the business at present. There is a brand new drinks range, design and menu. That new menu will roll out across what was the former Lewis & Clarke portfolio, for example sites like the Gable in the City. We have got c10 sites where we think the menu will fit.

“We are quite excited about the concept and the flexibility it could bring to other bits of the estate, say in one of our bigger venues. We envisage food to be 25% of the mix and the site will have a 1am licence. It has the potential to be a phenomenal success.”

In terms of staff training, Smith says when he walked in the door the company had just launched a career pathway initiative which “is terrific”. He says: “We have a thing called Novice to Novus, which literally takes you from walking in the door to whatever aspiration you have within the business. The next stage is around customer experience. We are looking to do something unique on it, which we hope to reveal soon.”

And what of backers Huttons Collins and LGV Capital? Smith says: “The support is there from the backers. The first thing was to deliver Christmas and then we wrote the business plan; investment support follows from there in terms of capex.

“However, capex is just part of the story. You need to be constantly thinking about what the plan is because this is a fast and dynamic business. I feel re-energised, which is good because you don’t come to Novus to retire!”