The inevitable increase in high-footfall site opportunities following the pandemic will not change Loungers’ established property strategy, CEO Nick Collins has said.
Speaking at MCA’s Restaurant Conference on Tuesday (26 January), Collins revealed that whilst the 168-strong group had seen opportunities in inner-city locations, it had no plans to pursue them.
“I think we’ve demonstrated that the property strategy we’ve applied for the last 10 years has been really effective, and the discipline that we’ve maintained in terms of securing sites on a consistently low rent-to-revenue ratio has worked well,” he said.
“It’s certainly the case that we’re seeing more opportunities now. But that doesn’t change our strategy. We will still continue to focus on secondary, suburban, high streets and small and medium sized market towns.”
During the first lockdown, Collins said the business was able to focus on communicating with and supporting its teams, reassuring them on their job security and implementing a strategy for reopening. And by nature of its suburban proposition, the business is now able to speak “from a relative position of strength,” compared to other operators more exposed through geography or lack of funding to the impact of the pandemic.
In December, the group reported it had managed to turn a profit in its half year results, with an EBITDA of £13.2m, and profit before tax of £117,000.
However, very aware that countless businesses weren’t so resistant to the crisis, Collins told MCA that it’s imperative Government take into account the “big difference” in what larger, and smaller operators need to survive.
Whether it be through a continuation of the business rates holiday, VAT cut, furlough or funding, Government must look to support the breadth of the sector, he said.
“I used to have a sandwich shop business in London’s square mile, and that wouldn’t have lasted a week in this environment. It’s really important that Government support those sorts of businesses, the one’s that have been worst affected.”
Sticking to its property model for the Lounge and Cosy Club brands, Loungers main point of interest going forward is the increase in opportunities in the locations it has looked to historically.
“There’s been a real shift in some towns and suburbs where we’ve wanted to open for a long time, and we haven’t been able to find the right property before because it’s been too tight or there hasn’t been the vacancies we require,” Collins said.
“In the last 12 months we’ve seen more and more really strong opportunities, and we’re hopeful that will allow us to open higher average revenue and higher average EBITDA sites.”
And he also emphasised the value of these so-called secondary sites, now “voids in the high street,” for a new wave of potential operators going forward.
“There are lots of fitted out restaurants which have closed and gone back to the landlord. So, I think it’s going to be a really exciting time for start-ups and entrepreneurs who want to take their first steps into the hospitality industry.
“We will hopefully see lots of new entrants come in and develop their own brands.”
To watch all the footage from the event please click here.
RESTAURANT CONFERENCE 2021
Nick Collins: ‘Opportunities won’t sway our strategy’
The inevitable increase in high-footfall site opportunities will not change Loungers’ established property strategy, CEO Nick Collins has said. Speaking at MCA’s Restaurant Conference on Tuesday (26 January), Collins revealed that whilst the 168-strong group had seen opportunities in inner-city locations, it had no plans to pursue them. “I think we’ve demonstrated that the property strategy we’ve applied for the last 10 years has been really effective. It’s certainly the case that we’re seeing more opportunities now. But that doesn’t change our strategy.”