The Orchid Group, the pub operator, which is backed by GI Partners, the US private equity firm, is to segment the 290 ex-Spirit Group pubs it acquired from Punch Taverns for £571m in June into seven core categories.
After a review of the estate, the company has placed the pubs into two investment sections – refresh and smirt (smoking and flirting) in one category, and hidden gems in the other.
The refresh and smirt pubs are to be refreshed in preparation for next summer’s proposed smoking ban, with investment of between £50,000 and £250,000 per site.
The company is to invest between £150,000 and £700,000 per site in the sites it described as hidden gems. These properties are in suburban locations with a good demographic profile, have outside areas, are under performing and have been under invested. The sites will be repositioned with new independent designs, drink and food offers, new service styles and a new differential based local pricing model.
The group expects to spend around £57m in total developing the estate.
Each pub will be placed in seven core segments, which the company has reduced from an initial 20 it inherited, theses include Urban Play, Mid-Market Dining, Contemporary Dining, Independent Locals, Modern British Local, Dragon, and Contemporary Carvery.
The group is looking to roll out Dragon, the Thai cuisine concept it acquired from Noble House, from its current five locations to up to 30 sites. The Dragon sites will offer a mix of traditional pub food favourites and classic Thai dishes.
Rufus Hall, chief executive of Orchid, said: “These sites will consist of a two zone operation, with the pub side aimed at sociable regulars, and a restaurant side with a full table service and booking system.”
The Independent Local portfolio, which will consist of 62 pubs, will be made up of former Q’s, Mr Q’s and John Barras branded sites. Hall said: “These pubs, which are existing high ebitda sites in strong demographic area, will be debranded to their original names as we look to focus on the traditional values of the local pub.
“They will be repositioned as the best local in the area for food, drink and entertainment.”
Mid-Market Dining will include former Two-for-One sites, which will again be debranded back to their original names with new contemporary signage.
The category will consist of around 60 sites. It will be aimed at 30 to 65 year-olds, with two-for-one offers on core main dishes and a range of traditional light bites.
The company plans to remove the Country Carvery branding but roll out the concept with a more contemporary feel. It aims to extend it from its current 22 locations, to about 55 sites. Hall said: “This is a strong brand and is in a market with only one strong rival (Toby Carvery). We believe there is real potential to expand the brand within the current estate.”
The Modern British Local category will consist of around 40 sites and will be aimed at 30 to 50 year-olds with what the company describes as a “quality refuelling menu” that includes British classics like fish and chips.
The final segment of the new group, Contemporary Dining, will be applied to approximately 15 of the company’s identified hidden gem locations.
Theses pubs will serve a mixture of Pacific Rim and modern European food and will aim to compete with Mitchells & Butlers’ Project S concept.
The group is to place the 16 Bar Room Bar branded sites it acquired from Punch, under its Urban Play category, which will consist of around 20 bars. These sites will be wet led but also offer traditional British pub food.
He said: “Our vision is focused and clear: to regenerate under-invested pubs and restaurants located in great regional and suburban locales. We will focus our management and capital on businesses that have leading geographical positions and strong growth prospects.
“We want to take a flexible approach with the concepts and with the food offers we put in place. We believe we have concepts that have minimal direct competition.
“We also want to make the food offer more concise and contemporary. When we started there were 200 different menus across the estate, from now on there will be seven different but distinct food offers.”
Hall also said that the company has invested £5m on a new epos system for the pubs called Zonal, which went live in all of the 290 sites on 18 November.
He said: “By the start of next year we will be ready to really go forward with the investment programme for the pubs, and hopefully we will start seeing some results from that in the middle of next year.
“The investment programme for the entire estate will take three years but we will take one site at a time, we will constantly reassess each venue so the whole estate is at the required standard.”
