In their previous guise as Life Restaurants, Tim Bacon and Jeremy Roberts made a bit of a habit of building up successful brands and then flogging them off for tasty returns. But with their latest enterprise, Living Ventures, the duo finally have a controlling share, with a 69% stake in the business, and reckon they're in it for the long term.
Not ones to let the grass grow under their feet, Bacon and Roberts opened their first offering under their new name in December 1999 while finishing off their time with Life Caf‚, which they had sold to Whitbread. Now in its fifth year Living Ventures is on target to turn over close to £30m.
That first site, the Living Room in Manchester, with its 80-cover restaurant and 200-capacity bar, "took off like Concorde", quickly turning over £40,000 a week, said Bacon. The duo opened a second, slightly larger, Living Room in Liverpool in mid-2000, with more of a focus on food. But despite being very confident about the concept, their cautious approach meant it took them two years to get three units.
The original idea was to create a bustling, domestic-style space - as reflected in the name Living Room and the extensive use of creams and browns - with live piano music. Living Room sites mix and match a number of additional components, depending on the environment and location, including a more relaxed restaurant alternative known as the Dining Room, a members bar for regulars called The Study, and an "up-tempo, high-energy" basement bar concept called Mosquito. The Edinburgh site, for example, is just a ground floor Living Room, while Leeds has a Living Room, Dining Room, a Study, and a Mosquito. In addition, the Oxford site, due to open next year, will have an outside barbeque area catering for 120 covers.
"Historically, our term for Living Room has been up-tempo, casual dining - it's not restaurant dining in the typical sense," explained Bacon. "People come in for the atmosphere and the fun of it. That hasn't changed. What has changed with the concept is it's got bigger."
Living Ventures now operates 10 Living Rooms, averaging about 8,500sq ft, with new openings closer to 10,000sq ft. The Manchester site now has a 200-cover restaurant and a Study. Next year will see two more sites opening in London - one in Heddon Street and one in the City - and one each in Oxford and Cambridge, the latter a 9,000sq ft site in St John's College.
An interesting tie-in with Niche Hotels will see it put a stand-alone Living Room and a Mosquito-style bar in the company's new hotel, due to open in Newcastle in November. Living Ventures will also do all the catering for the hotel. In return it will pay Niche a percentage on sales.
"It's a win, win situation," said Roberts. "If it works well it could be an interesting angle for us."
In addition, under its classic bar division, Living Ventures operates two Prohibition cocktail bars - one in Leeds and the other in Manchester - which are more design-led than Living Room. And next year the company will open two or three more bar offerings.
In the restaurants division the current focus is developing the Bar & Grill concept, which it may roll out as a brand in its own right. The Bar & Grills will use traditional grill techniques on offerings like Kobe beef, ostrich, lamb, fish cuts, and black Aberdeen Angus.
The chefs will flavour the meat using a variety of "sops and rubs", either basting sauces or dry rubbing into the meat and fish before cooking. Alternatives for less carnivorous grazers include stone-baked pizzas and "proper chips".
The Liverpool Prohibition site was used as a test base for the new offering, and has since been rebranded a Bar & Grill, along with the former Living Room in London's Smithfield market area.
Living Ventures plans to grow the core Living Room brand to about 25 units over the next five years, with "snappier" growth for the classic bars division and an eye to expanding overseas. Mergers and acquisitions remain a strong possibility, despite the collapse of recent talks with the three-strong Bank restaurant chain, and Bacon admitted the company was "sniffing about" some alternative options. But it would never do franchises, Bacon said.
At some point over the next 12 to 18 months the company aims to float on the stock market to help structure itself for the future, although Bacon stressed it wouldn't do it to fund its expansion as it doesn't need the cash right now. The main reason would be to replace its venture capital firm backer Sagita, which he expects will be ready to take a return on its capital soon. But both Bacon and Roberts said they had no intention of diluting their majority stake, or selling up and starting again.
"You never say no, but the intention isn't there. And who would buy us?" said Bacon.
In 2000, its first full year of operation, the company turned over £3m. By the following year that increased to £6m, and then £12m, and £19m last year, with the company on target to hit £28m-£30m this year. Average takings, net of VAT, are about £45,000 a week across the estate.
"We started out with a 10-year programme and we're almost bang on it," said Bacon. "We predicted £30m turnover after five years, and £98m after 10 years." The only difference is the company anticipated having to open more outlets to hit its targets.
With a new opening the aim is always to get a 30% return on capital. Outlets like Chester, York and Edinburgh do about 45%, and Bacon said the four planned openings should have no problems making the grade.
The company also aims to get return on investment in three years, and the average is just over two. Manchester, which rakes in £70,000-£75,000 a week, took just nine months. Liverpool also returned on its investment in less than a year.
1986 Former actor Tim Bacon arrived in Britain from his native Australia and began working in TGI Friday's in Covent Garden. He set up a consultancy for bar and restaurant businesses. Bacon established his first bar, JW Johnson's, in Manchester, and was appointed restaurant operations director when the company merged with the Celebrated Group two years later.
1996 After the merged company floated, Bacon left to form Life Restaurants with Jeremy Roberts, who had formerly managed hotels in London and in Manchester. They developed the chains Via Vita, a joint venture with Marstons, and Life Caf‚, a joint venture with Whitbread, later selling their stakes to the brewers.
October 1999 They formed Living Ventures.
December 1999 First Living Room opened.
Sites: 10 Living Rooms, two Prohibition bars, and two Bar & Grill restaurants
Key staff: Tim Bacon, managing director; Jeremy Roberts, commercial and finance director; Paul Newman, director of sales and marketing; Danny Fox, operations director
Turnover: on target for £28m-£30m in 2004
Head office: Living Ventures, Toft Hall, Toft Road, Toft, Knutsford, Cheshire WA16 9PD
About 10% of the total spend on a new opening goes on training, with three to six months' training on full salary for the management team and three to six weeks' training for the other staff before the doors even open.
At the Heddon Street branch alone the bill will come to £1.5m. "But it's worth its weight in gold," said Roberts.
The company has stuck with this approach to training despite a major knockback at its Nottingham branch, where the whole management team left one week after opening, having completed their training, to set up a rival venture in Liverpool.
Bacon and Roberts have developed an impressive staff retention record, which aids continuity and strengthens the company culture with its 850-strong team.
Essentially, the company culture is "a collective type of operation where everyone gets involved", said Bacon and Roberts.
For the most part the operational structure is pretty flat and becomes hierarchical only when there's a problem to react to.