Overall ranking: 25 (new entry)
Pub and bar operator ranking: 7 (new entry)
What we think
Something has changed in the town centre market. Whereas both the City and the venture capital players saw opportunities in the casual dining arena until very recently, there is a new breed of younger, affluent consumers who are more turned on by craft beer, artisan gin and well-made cocktails than they are by the ubiquitous pizza and burgers. As a result, investors are once again interested in drinks-led formats.
For Stonegate Pub Company and Simon Longbottom, its chief executive since 2014, the change became apparent when what looked to be another routinely done deal, Stonegate's takeover of vodka bar operator Revolution, tabled in the summer of 2017, came unstuck. Rival operator Deltic tabled a counter-bid, prompting some Revolution shareholders to argue that there was more value to be had than the £100m Stonegate was offering. Both bids were ultimately withdrawn, although it seems unlikely that Revolution is off the table permanently.
Under the chairmanship of industry veteran Ian Payne, Stonegate has always been a consolidation player, picking up sites, formats and brands that were underinvested or neglected by other operators. Longbottom, with a 30-year career that includes stints with Greene King, Mitchells & Butlers and Gala, brings the operational expertise that ensures that, with the right format, investment, training and product mix, the venues are profitable.
Although the business is drinks-led, Longbottom points out that Stonegate also sells £100m of food each year. The offer is diversified, ranging from the student-led Common Room format, offering free Wi-Fi and wireless printing, via Town Pubs & Kitchens, with its classic pub food, to the sports-focused Walkabout brand. Interviewed in 2016, Longbottom said: "We've found that having venues with an all-day trading feel works. During the day, people want to eat, so most of our daytime weekday sales are around food. The trick is, can you turn that into a drink in the evening? That's what we spend a lot of time trying to do."
There's no doubt that both the City and Stonegate's venture capital owner TDR Capital would like to see the business floated when the moment is right, and a core part of Longbottom's brief is to ensure that the necessary operational rigour, control and varied customer propositions are in place to ensure continued success. "We can dominate in town centres through our different brands," he says.
Stonegate was named Best Managed Pub Operator and Best Late Night Operator at the Publican Awards 2017.
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