Playing the numbers game – for a while

There's more to management than a slavish devotion to the bottom line, but, says Stephen Evans, that seems to be the current fashion.

I am fascinated by the machines at motorway service areas, airports and railway stations that design and print business cards while you wait - not only by how they do it but also by who uses them.

Then I thought about the level of churn we're seeing in the pub, restaurant and leisure markets, and I realised that these machines could provide a useful service for me and my fellow operators. This week, you're employed by the Independent Pub Co; next week, it's a division of the Japanese Brewing Corporation.

We are seeing an incredibly high level of disposals and acquisitions. There are hundreds of sites changing hands every week, as the shake-out that was started by the original Monopolies & Mergers Commission report on the brewing industry continues its ripple effect.

The big boys - S&N, Six Continents, Punch, Enterprise and Nomura - are regular players. Then you have the Wolverhampton & Dudley/Pubmaster saga, only just resolved after 14 months. Now, even the fledgling Laurel group is getting into the game.

Where a sale fails to materialise - for example, in the case of SFI's For Your Eyes Only chain of table-dancing clubs - groups are prepared to spin off the brand as a stand-alone business. I can't help wondering what will happen to Whitbread's restaurants, if there's any truth in the rumours of it shedding underperforming brands.

The reason for all this activity is clear. It is to rid companies of underperforming or non-core businesses so that they can concentrate on the elements that are going to make them star performers in the future.

If you want to look good in the City, it's not enough to increase turnover and improve profits, you have to be seen to be reinventing yourself on a regular basis.

Cast your mind back 10 or 15 years and you may remember that there was a fair bit of activity in the 1980s and '90s - but there was a big difference. This was driven by the buyers rather than by the sellers. Companies were actively seeking out brands and concepts that would give them more than simply organic growth.

My former employer Whitbread, for example, acquired Café Rouge from Roger Myers and Karen Jones, and BrightReasons from Michael Guthrie. We went into a joint venture with Zuju Shareef to create an Indian restaurant that we hoped to be able to replicate as a chain.

It was all about growth and expansion; companies were prepared to sow a number of seeds, realising that not all of them would grow into a fully developed plant.

If you listen to the talk around sales and acquisitions today, it concerns synergies. For "synergies", read "cost-cutting".

It is further proof that the food service market is being taken over by number-crunchers. The importance of an astute finance director, providing the board with accurate management information, insight and analysis, cannot be overemphasised.

However, this is not a widget-manufacturing industry. There must be a balanced approach, combining sound financial management with the passion and creativity that makes certain pub and restaurant brands stand out.

I believe that the balance has moved too far in the direction of the numbers, and away from the product.

Added to this is the dimension of attempting to recruit enthusiastic people to an industry that is so destabilised. If companies are run by accountants, they are run to a formula, so what we will see is an increasingly bland high street offering.

I fear that this situation will develop and last for a few years, given the economic climate. Entrepreneurs have a difficult time finding backing during lean times.

The good news is that I am sure we will see the wheel turn full circle. In five years' time, restaurateurs will be coming up with inventive new foods and styles of presentation, developing them into chains and selling them on to larger companies to develop into full-blown brands.

I must admit, I don't like the way the market is operating at the moment. I am naturally geared toward team-building, nurture and growth, as opposed to hostile takeovers, forced mergers, cost-cutting and job losses.

I am sure there are plenty of people reading this who feel the same way.

Stephen Evans is chief executive of Mustard Entertainment Restaurants, non-executive director of Dineline, chairman of First! Venues, and a member of the Restaurant Association national committee