Loungers chairman Alex Reilley has described an IPO as a “really logical next step” for the c145-strong café-bar operator.
The group has long been rumoured to be seeking a flotation and appointed advisors at the start of the year.
Speaking to MCA’s contributing editor Peter Martin at yesterday’s Casual Dining Show, Reilley said that with Piper and Lion Capital, the company has had “two really good experiences with private equity” and said that this route would remain open but stressed “an IPO is an option we had to have on the table”.
He went on to stress that he and co-founder Jake Bishop remained highly engaged with the business and had no plans to step back.
He added: “The team that we have all genuinely enjoy what we do. That sense of camaraderie – why would you want that to end? You see people sell their business and say they are going to sit on a beach. Then they sit on that beach and get bored shitless. Eventually they come back with a point to prove, and often don’t get to prove it.”
Quizzed on the ultimate growth potential of the Lounge and Cosy Club brands – Reilley said: “We can certainly break into multiple hundred locations in the UK. We’re in locations JD Wetherspoon aren’t and that Costa aren’t yet. We think about 400 Lounges as a conservative number.”
However, Reilley stressed that plans wouldn’t come at the expense of the company’s close-knit structure. “Operational structure is really important,” he added. “Communicating with general managers and chefs.”
“We believe that you have to work harder to protect what’s made the business very special and I can say today that our culture has never been stronger.
“We can grow the business to become extremely large without it becoming corporate.
“For us it’s remembering what we do. We provide hospitality, food and drink in an environment where people can enjoy those things. As long as you don’t lose sight of the two most important things, your people and your customers.
“If we’re making decisions at head office that don’t impact our people or our customers, then we’re putting work and investment into something we shouldn’t be bothering with.”
Explaining the success of the Cosy Club and Lounge bar concepts to date, Reilley said that rather than doing anything “off the wall” Loungers simply ran a very feedback-orientated business.
“We’re a bit feedback obsessed to be honest,” he said. “I receive all the emails we get through to the main email account where the customers send feedback to.”
He explained that operators of Loungers’ sites were acutely aware of what customers are saying, with general managers observing a constant stream of feedback and encouraged to respond within four hours. “I know business that have turned TripAdvisor and reviews off because it’s depressing, but it’s really, really important.