The owner of the designer-budget brand, the Hoxton, has taken a new direction with the surprise acquisition of the five-red-AA-star, 232-bedroom Gleneagles hotel in Auchterarder, Perthshire.
Private investment and property company Ennismore is believed to have outbid rivals, including KSL Capital Partners, owner of the Belfry, to secure the trophy property which was catapulted on to the international stage as the venue of the G8 summit in 2005 and as the host venue of the Ryder Cup last year.
The hotel was bought from drinks giant Diageo, which acquired the property in 1984, three years after it was sold by British Rail to a consortium of British businessmen for £10m. It has not been revealed how much has been paid for the hotel, but it is believed that around £200m was being sought.
Sharan Pasricha, founder and chief executive of Ennismore, said: "We are delighted to be acquiring the iconic Gleneagles hotel, which is one of the world's most prestigious and recognisable venues.
Ennismore will retain the existing Gleneagles management and workforce, headed by managing director Bernard Murphy, while investing a significant figure across the 850-acre estate comprising three golf courses, the two-Michelin star Restaurant Andrew Fairlie, and the Spa by Espa with 18 treatment rooms.
Pasricha also pledged to retain the distinctive Gleneagles culture, service and brand established over its 91-year history: "We will be proud guardians of this asset, ensuring that the service-levels and visitor experience for which Gleneagles is renowned are preserved and enhanced in the years to come."
Ennismore entered the hotel sector - with the acquisition for around £65m of the original 205-bedroom Hoxton hotel in 2012 - just 18 months after the company was founded by Indian-born entrepreneur Pasricha, the holder of an MBA from the London Business School.
At the time, he told The Caterer that he intended to replicate the brand with further hotel openings in London and abroad. He has since gone on to launch Hoxton hotels in Holborn, London, and Amsterdam, with further properties lined up for New York (2016), Paris (2017) and Southwark, London (2017). The look of the original Hoxton has been retained in the new sites, with bare brick walls, tatty leather sofas and Soho House-operated food and beverage outlets throughout.
Diageo will continue to have a relationship with Gleneagles, which will see its brands, particularly its Scotch whisky drinks, available at the hotel.
Ivan Menezes, chief executive of Diageo said that the company decided to sell the hotel as it was not part of its core business. "Following the success of the Ryder Cup we feel this is an appropriate time to realise value through this transaction. We wish Ennismore and all the staff at the hotel a successful future."
In the year ended 30 June 2014, Gleneagles achieved a turnover of £43.5m and an operating profit of £2.6m.
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