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Top 100: Simon Townsend, Ei Group

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Written by:
Top 100: Simon Townsend, Ei Group

Overall ranking: 21 (new entry)
Pub and bar operator ranking: 6 (new entry)

Simon Townsend is the man responsible for turning around the super-tanker that was Enterprise Inns, now Ei Group. Having taken over from Ted Tuppen in 2014 as chief executive, Townsend has set about not only refreshing the image of Ei – literally with its brand relaunch last year – but its balance sheet, too. He is passionate about pubs, an interest sparked by his father, who ran Blackburn-based brewer Matthew Brown, and Townsend is rumoured to know practically every pub in London. At university he took a course in beer-making, which led to jobs selling beer to pubs, before he joined Enterprise in 1998. The group had 1,000 pubs back then, but by the time Townsend became operations director in Ei Group2006 the estate had grown to 8,000.

What we think
The group had some well-documented problems in 2007 when it was hit by the credit crunch and forced to sell swathes of the estate. It now stands at around 5,000 pubs, with the majority still leased and tenanted, but with a growing managed house group. Since taking over from Tuppen, Townsend has made his mark on the business and reshaped it as a modern, forward-looking pub group.

He told The Caterer last year: “We are changing tack. We used to rely entirely on a tied, leased and tenanted business model, which does require us to find great publicans to run our pubs. And the majority of our pubs are still run on that basis, but we’re now looking at different business models.”

Ei Group now has a 75-strong managed house group called Craft Union, focused on community pubs in urban locations, which are evolving from wet-led to featuring a simple food offer. It also has the Bermondsey Group of pubs, which has a mix of around 30 food- and wet-led sites.

The company also operates what Townsend describes as more complex businesses, which include Hippo Inns, that he has developed with Geronimo Inns founder Rupert Clevely, and Food and Fuel, in partnership with former Spirit chief executive and Café Rouge co-founder Karen Jones. Ei has also partnered with the Laines Pub Company on Mash Inns, Peter Borg-Neal’s Hunky Dory, and Marylebone Leisure Group to create the Marmalade Pub Company.

Although the group still has some pain to come, not least with negotiating the new market rent-only options with tenants and developing better relations with certain groups of disenfranchised publicans, Townsend is working hard to give the group renewed focus. And forging alliances with some of the hospitality industry’s most respected entrepreneurs has done much to refresh the group’s offer and provide inspiration for elsewhere in the business.

Discussing Ei’s work with Tom Kerridge at the Coach, Townsend said that the group had worked hard on developing relationships with all of its publicans. “But there are certain sites in certain locations that have the right characteristics and amenities to be able to provide a more complex and comprehensive food offer,” he added. “It’s about understanding where one’s competencies are and pitching it in such a way as to create an effective business partnership.”

The group is now delivering solid results too, with EBITDA of £287m for the financial year ended 30 September 2017 and like-for-like sales up 2.3% in its publican partnerships business, so Ei under Townsend is well set for a strong future.

Further information
The Caterer interview: Simon Townsend, chief executive, Ei Group >>

Ei Group sees EBITDA drop to £287m despite like-for-likes up in leased and tenanted business >>

Hush Heath Estate partners with Ei to open pubs with rooms business >>

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