Sink or swim
"An opportunity to make improvements." That's how Graham Funnell now describes the floods that swept through Kent and Sussex last October and closed his 30-seat Thackery's restaurant in Lewes, East Sussex.
Admittedly, he has had 10 months to come to this positive frame of mind. When he spoke to Caterer just after the floods took place (Caterer, 19 October, 2000) he had hoped the restaurant would be reopened in time for Christmas. But while there was just three feet of water inside the building, the 350-year-old chalk-and-flint property soaked up the flood like a sponge and drying it out sufficiently to start work has taken months. The restaurant is now expected to open by late August following a refurbishment that goes beyond repairing flood damage.
"This has been a good opportunity to improve some things. We've been here 17 years and our last refurb was 10 years ago," says Funnell, who is chef-proprietor.
While the traditional feel of the property will be retained, the kitchen will be updated, the dining room made more comfortable and the menu changed from fixed price to … la carte to encourage people to come in for just one course.
Funnell expects his insurance claim to be well in excess of £100,000 and he plans to invest a further 10% himself. Meanwhile, he has made sure the people of Lewes haven't forgotten his business. "I've advertised in the local press every week," he says. "We've done mail-drops and we've taken part in a local festival. I'm hoping we'll get back to our pre-flood turnover."
Old English Inns also grabbed the opportunity to add new features to its Riverside hotel near Burton-on-Trent, Staffordshire, when it underwent repairs to flood damage. The hotel had only just undergone a £100,000 refurbishment when the flood happened in November and, although staff tried to salvage as much as they could, the premises had to be gutted. At the final tally, the flood was deemed to have cost the hotel about £500,000 in lost revenue. Insurance claims went through easily, and Old English Inns invested a further £250,000 to install disabled access facilities as well as a new dance floor and refurbish bedrooms unaffected by the flood. Five months later, the Riverside hotel, with its 22 bedrooms, 100-seat restaurant and 120-seat function room, has reopened and business has "picked up and more", according to Malcolm Sexton who runs the property. Occupancy during a mid-May week hit 82%. "That's way up, one of our highest occupancies ever," he says.
Occupancy levels are also hitting new highs at Daniel Ralley's eight-bedroom Hotel des Clos in Nottingham since it reopened in April following the floods. They are at an "unbelievable" 85-90%, says Ralley, who adds that turnover for 2001 should "equal if not better" last year's.
"It was a good time of year to reopen," he says. "We've got seven weddings booked and I'm hoping to double that figure before the end of the year."
Life didn't seem quite so rosy when waters swept through the recently refurbished building last autumn. With only two upstairs bedrooms there was no chance of saving everything and five antique beds were among items ruined. It took two-and-a-half months for the hotel to dry out sufficiently for building work to begin and Ralley said he came close to giving up, concerned above all about not getting reinsured. Happily, Royal Sun Alliance accepted the freak nature of the flood and reinsured the hotel with only a marginal increase in premium.
Ralley's claim (between £500,000 and £750,000) enabled him to pay all 12 staff during the closure and make some major improvements. "We've put modem points and satellite television in bedrooms and knocked two rooms into one to make another suite. The restaurant is more contemporary, too," he says.
Customers have responded favourably, making Ralley optimistic about the months ahead. "It's a combination of seeing the new place and having a good nose around," he laughs. "It would be presumptuous to say the flood has improved business but we're certainly getting new clients."
When the river Trent flooded the Toll House restaurant in Gunthorpe, Nottingham, last November, it gave Clive Harris the chance to rethink his business. An £80,000 insurance claim covered a total refurbishment, including a redesign of the restaurant and a reorganisation of the kitchen, which now has a walk-in fridge instead of lots of small ones and a new small freezer.
"I realised how much stock I was carrying and I've simplified everything," says Harris. "Now I buy more frequently, I buy organic food and I use more local suppliers."
A local radio advertisement, part-funded by Norwich Union - the insurance company was keen to have the Toll House trading again as soon as possible - announced the reopening on Mothers' Day, 22 March, with the slogan "the restaurant that was in the river is now out of it".
Six months on, Harris says things are "almost back to normal". Now, with Saturday and Sunday lunchtime full again and spend per head at its former £25-£30, he is confident about hitting a similar turnover to last year (£190,000). "I'm sure we'll recover financially. People like coming here: you see, being so close to the river makes it such a wonderful place," he adds.
But in case the heavy rains come again, Harris has installed features in the Toll House that will minimise damage. For instance, carpets throughout the building are now in sections so that they can be easily lifted.
At Thackery's in Lewes, Funnell has gone one step further by investing in flood gates and has stocked up on sandbags, even though the environment agency has assured him it's unlikely his premises will flood again.
And Ralley at Hotel des Clos offers this advice to others: "Consult your environment agency now if flooding is a possibility. Stock up regularly on sandbags - they only last a year - and invest in flood defences. We're building grass banks even though we've been advised we won't be flooded again."
Legal protection
When disaster strikes, owners and managers may need a few weeks' breathing space to plan the future of their business, rather than being rushed into hasty decisions by creditors, writes Robin Tutty. The Government's Insolvency Act 2000 has now made that possible.
One part of the act, due to be brought into effect this summer, allows directors of companies in financial difficulties to obtain an initial moratorium to protect the business, pending a meeting to propose a formal voluntary arrangement or rescue plan to the company's creditors.
Until now many attempts to rescue businesses have been thwarted by the refusal of some creditors to co-operate with rescue plans.
During the 28-day moratorium:
No petition may be presented for the winding up of the company and no resolution passed for it to be wound up.
No administrator or administrative receiver may be appointed.
No landlord may take action to bring a lease to an end.
No steps may be taken to enforce any security over the company's property or to repossess goods in the company's possession.
No other proceedings or legal process may be commenced or continued against the company.
To avoid abuse, a licensed insolvency practitioner, who will agree to act as the supervisor of the voluntary arrangement if it is agreed by the meeting of creditors, must support any application for a moratorium, which is made by filing various documents with the court.
During the moratorium the company will be subject to restrictions to protect creditors. For example, it will be prohibited from disposing of property unless there are reasonable grounds for believing that a disposal would benefit the company and provided a committee of creditors or the nominated insolvency practitioner approves the proposed disposal. The company is also prohibited from obtaining credit of more than £250 from a person who has not been informed that the moratorium is in force.
Initially, the protection offered by the Insolvency Act will apply only to "small companies". These are defined as companies with an annual turnover of less than £2.8m, with balance sheet assets of less than £1.4m and with fewer than 50 employees.
Robin Tutty is a partner in the corporate department of City law firm Fox Williams and a specialist in corporate recovery and corporate governance issues.
When lightning strikes twice
In 1967, the last time Britain was ravaged by foot-and-mouth, Anthony Varley was managing director of the 30-bedroom Glenridding Hotel on Lake Ullswater in the Lake District. This year, as senior partner of the 12-bedroom Aynsome Manor Hotel in Cartmel, near Grange-over-Sands in Cumbria, he has again found himself at the centre of the epidemic. This time, however, his business has fared better.
The Glenridding Hotel was dependent on walkers and hikers and, when the 1967 outbreak hit at the height of the summer, business slumped by some 33% as footpaths were closed and visitors stayed away.
At Aynsome Manor, by comparison, bookings were down about 6% in April this year, then 10-15% lower in May, and 4-5% down in June. As the hotel relies more on older visitors, who are generally less concerned about hiking and walking, the situation has been difficult but not impossible, says Varley. But he adds: "We did go through a phase in May where we wondered what our telephone was doing there as it hardly ever rang."
The cancellation of the Cartmel Races over the second May bank holiday was also a blow to business. Varley believes the impact of the earlier epidemic was less damaging to businesses than this year's outbreak. For a start the 1967 outbreak was covered by insurance - under a clause on infectious diseases - so losses were restricted, he says. And recovery was quicker, partly because there was less prejudicial publicity than today.
"It also came back more quickly because in those days there were not the opportunities to take cheap holidays abroad. Now it is harder to attract people because they are not a captive audience," Varley says.
In 1967, the disease was less virulent and did not travel so quickly or widely, partly because there was less transportation of livestock up and down the country. But it also seemed to be dealt with more rapidly by officials on the ground, Varley remembers. "It seemed to be dealt with more locally and people seemed to have more power to do something about it."
This time round, the Government appeared to have been more reactive than proactive in tackling the outbreak from the start and never gave the impression of being on top of the situation, he argues.
"Things are improving, but slowly. There are a lot of people who have been put off by the television pictures of fields of carnage and funeral pyres. Those are the images that are etched on people's minds," he says.
by Nick Paton
