Shepard to step down as Ritz is given £175m price tag

18 November 2003 by
Shepard to step down as Ritz is given £175m price tag

Giles Shepard, deputy chairman of the five-star Ritz hotel in London, is to step down at the end of March.

The move follows the departure in September of managing director Luc Delafosse and the promotion of Stephen Boxall to general manager.

Asked the reasons for his departure, Shepard said: "I think it was time for a general shuffle round."

It has not yet been decided whether he will remain with the group in a different capacity or leave altogether.

Shepard's position will be taken by Andrew Love, chief executive of the Ritz Hotel Casino.

News of Shepard's departure comes after comments in the latest full-year accounts published by the Ritz's holding company, Ellerman Investments, showed that the Ritz could command a price tag of £175m if it was put up for sale.

Ellerman is controlled by millionaire brothers Sir David and Sir Frederick Barclay.

The 133-bedroom flagship London hotel is valued on Ellerman's books as being worth £116.3m after depreciation.

In June 2001 it was valued by chartered surveyors as being worth about £150m on the open market.

But notes in the accounts state: "The directors believe that, in the event that the hotel was placed on the open market for sale, taking into account its freehold, tenure, the location, the refurbished condition and the unique Ritz brand name, it could attract a buyer at a price in the order of £175m."

In addition, the compnay said rent from the Ritz Club, casino lease operations and the basement of the hotel were worth about £25m.

The price tag comes after Blackstone Group and Colony Capital, the US owners of the Savoy Group, last month confirmed they were looking for buyers for the 203-bedroom Claridge's hotel in London, with a price thought to be in the region of £300m.

Like many London hotels, the Ritz is still suffering from the fall-out from the September 11 terror attacks.

In the year to the end of December 2002, the hotel reported an operating profit of £4m, down from £4.6m in 2001. Turnover in the period was up by £200,000 to £17.5m.

The Ritz Club Casino reported an increase in turnover to £29.2m, from £19.7m, with pre-tax profits up to £6.81m, against a loss of £4.98m the year before.

Overall, Ellerman's UK hotel operations reported a pre-tax loss of £540,000 in the year, compared with a loss of £84,000 the year before.

by Nic Paton andDavid Shrimpton

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