I think staying in a beautiful pub with rooms is one of my favourite pastimes. I’m very fortunate that my job often allows me to mix business with pleasure – I’m all too happy to ‘work’ weekends if it means driving off to some unexplored village in Norfolk to try local beer and eat some oysters, before walking for a few seconds until I reach my bed for the night.
Having spoken to Rob Greacen (pictured), managing director of Stay Original Co., for this issue’s lead interview, I now have a new wish list of rooms to retire to. Stay Original is a four-strong group of pubs based in the south west of England, run by three guys who met while working in the private equity business. Their pubs with rooms model is treating them well, so much so that a fifth site should be open by the end of the year. On that progressive note, we thought it was a good time to catch up with Greacen to hear what his company is all about…
P&B: Tell us about Stay Original…
RG: The easiest way to explain it is that we’re buying pubs and hotels in the south west, redeveloping them and turning them into businesses with three elements – bars, restaurants and rooms. Our focus is only on the south west. What we’re trying to do is make buildings work as hard as possible and be fun to visit. So, all our places are open seven days a week – you can eat anytime, anywhere and it’s all very relaxed. We think the pubs are a fairly contemporary take on where hospitality is going these days. Our staff work very hard so that the customer doesn’t have to – everything is very easy. We serve fresh food all the way through the estate, which we developed while we were involved in the River Cottage business.
P&B: Is that your background then? Have you always worked in hospitality?
RG: I didn’t fall into hospitality – I jumped. I didn’t really know anything about it, as I came from a property and private equity background. I got involved in hospitality fairly late on in my career. We (me, James Brooke-Webb and Pat Gill) think that’s important in the business, the fact that we’re looking at it as outsiders. The route in was when we invested in the River Cottage business and helped develop that into restaurants and cookery schools. The whole idea behind Stay Original was that we took the kind of fresh food that we did at River Cottage, but put it into derelict and refurbished pubs and hotels that we wholly owned.
P&B: That sounds like an attractive model. Has it worked well so far?
RG: It has. The first one we did, The Swan, was an old Punch pub in Wedmore in Somerset in 2011. Wedmore has around a 3,000-person population – it’s very affluent and very pretty. We bought the building and completely redeveloped it, before opening on a hunch that it would work. We built a restaurant and put in seven bedrooms. It was, amazingly, a success from the beginning – we forecasted £15,000 a week, but it started at £20,000. It has never really slowed down. It proved there was a demand for that kind of business, so we did another one.
We bought another from Punch – The White Hart in Somerton. We did the same again and it traded in exactly the same way, so we felt at that point that we had a model that made sense. We stepped up a size and bought Timbrell’s Yard in Bradford-on-Avon, and put 17 bedrooms into that. It worked even better. These were all derelict or semi-closed buildings, so we had a lot of fun bringing something new to the locations. We then bought another The Grosvenor Arms in Shaftesbury and did 16 bedrooms there. Recently, we bought a site in Dorchester, a famous old hotel called The King’s Arms. We’re doing 35 bedrooms there – we’re on site at the moment developing it, and it should be open at the end of this year.
P&B: Sounds like it is all going to plan then. How are three ‘outsiders’ coping with working in this industry?
RG: Well, River Cottage allowed us to understand how you open a restaurant. We also have a background as property developers, so the physical challenge of dealing with an old building is something we’re really comfortable with. All our buildings are listed and tricky to deal with, but operations was the big step for us – understanding how to run a building with a bar, rooms, and lots of different customer requirements. The truth is, we went in with a bunch of theories as to how you do that, and it took about three years for us to work it all out. We always traded well, but the challenge was the consistency and delivering it right. That took a lot of testing, reviewing what we were doing all of the time.
P&B: Of course, you’ll need a decent team to deliver that. How is recruitment in the south west?
RG: It’s tough everywhere. There are advantages and disadvantages of recruiting in here. There are fewer people around, so you have to work harder to find them. But when you do find them, it is easier to retain them because there are fewer competitors. It is a non-stop challenge, though, and we haven’t completely nailed it.
The biggest lesson we’ve had to learn as outsiders was how to motivate people and allow them to enjoy working. It’s a different challenge compared to working in investment where you recruit a lot of people and motivate them through bonuses and incentives – the financial aspect is enough to run a business like that. But in hospitality, you need to be much broader in your outlook – make people have a really good reason to work hard for you. Now we have an extensive programme of training, parties, trips and a lot of motivational things that make working in the company that little bit more fun. Every year we have a massive party for the employees – they come to my house, we put up a marquee and it’s a wild night with lots of music. We take all senior people away every year to visit suppliers, wine makers, etc. There are day trips, various events and parties all the way through the year. We have a fun newsletter that comes out every quarter that dishes the dirt on the teams. We move people around the sites, so everyone knows everyone and we’d like to continue that as we grow. There are around 180 employees at the moment – The King’s Arms may take that up to 220. We have another site that we’re working on as well, which we hope to acquire shortly – that may add another 30 people.
P&B: Are all of your sites freehold?
RG: Yes. It’s a central part of the business – we own everything and we control everything. We want to have the ability to make all of the decisions on our own. You can buy a derelict pub in the south west for £400,000 quite easily, but a larger building can vary – the numbers are all over the place. If we buy a small pub for £400,000, we’ll probably spend £1m on it, maybe a bit more. If you’re spending that much on an asset, you need to be delivering a decent turnover to make it all worthwhile. Scale is critical – if you can’t achieve a sensible turnover, then the whole business tends to unravel, because you then can’t deliver the standard and service you need to. You need to get to a reasonable scale to make this sort of thing work.
P&B: And it seems like it is working?
RG: It really is. Hospitality is full of optimists who tell you everything is really good even if things are really bad, but genuinely this business is growing. We had a really good year of growth last year and another good one this year, excluding new openings. We’re not really seeing any negativity at all, which is really encouraging. We seem to be growing both on the food and drink side of things, but it is highly competitive. Although we’re operating in a market where there isn’t a huge amount of competition, you still have to work hard to keep people coming in.
P&B: Do you try and do that by ‘Staying Original’ then?
RG: Sort of, but the name Stay Original is all about our staff – we encourage them to be individual and professional, but also interesting, if that makes sense? It’s anti-corporate, which is a bit of a cliché, but we want people to stand out. The buildings and décor are all very original and, yes, the originality applies to the offer in what we provide, but not necessarily to how ‘weird’ it is.
P&B: So what does the future hold for Stay Original in terms of growth?
RG: One or two pubs per year is the best we can hope for, but it of course comes down to finding the right sites. It takes time to find those places – so far we haven’t made a mistake. There is a big investment for each one, so we spend a lot of time making sure it has the right demographic, economics, etc. There is a limited number of places in the south west where you would want to open – we try to keep our places close to each other. We want to take the estate up to 10 sites at the moment – that’s the target; our base camp. And we think we can do that over the next four or five years.
But, generally, it’s surprising how healthy it is out there at the moment. From our point of view, it’s quite nice not being on the high street and in tougher locations. We’ve opened in quiet places, and it’s surprising how much interest people have in going out to nice pubs and hotels. We trade late on the weekends – like I said, you can eat at any time – and it’s quite interesting to see how many people will now eat Sunday lunch at 5pm, for example. It goes to show that consumer habits are always changing – staying original helps us react to that.