Fat Cat Café Bar chain prepares to go national

As the campaign builds up to attract more graduates to the licensed trade, one expanding pub company has already proved what can be achieved.

The Fat Cat Café Bar chain was set up seven years ago by Matt Saunders and Simon Patterson, fresh from their graduation ceremonies.

From the small beginnings of a converted café in Bangor in North Wales they have created an impressive portfolio of modern pubs that stretch from Leeds and the Midlands down to London.

Although it has only eight outlets now, it plans to open new sites in Northampton, Manchester and Islington in North London, confirming Fat Cat as a national brand.

The company has also begun a drive to boost its profile within the trade, with long-term plans to float on the Stock Exchange's Alternative Investment Market (AIM).

"We started on a shoestring," said Saunders, who is now managing director. "It was always our plan to expand it but we never expected it to do so well. We did it for fun but from day one we treated it as a proper business."

The two business studies students met at the University of Hertfordshire — or Hatfield Poly as it was then — and graduated in 1991.

Like many undergraduates, they knew the pub trade well from first-hand experience.

Saunders said: "I always wanted my own business but didn't know what in. While I was studying I had to work and I had jobs in pubs so we thought we would go straight into pub retailing.

"I could see there were areas where the major players were not filling a gap in the market."

It was the days before Pitcher & Piano and All Bar One, when meals were served in pubs only between midday and 2pm, tea or coffee were rarely available and customers had to order food at the bar.

"The whole service ethos was missing and there was little interest in the food," Saunders said. "We wanted to be able to go into a pub at any time of day every day and eat quality food.

"I want to be treated in a pub as I would in a restaurant and be able to have table service. That's what we set out to do and what we are still doing to this day."

With the economy edging out of recession, the pair picked up on the media obsession with the highly paid bosses of the former utilities, the "fat cats", and thought it would make a fun name for their company.

The concept is aimed at a core market of 25 to 55-year-olds, with a female-friendly atmosphere. The decor is clean and modern, with no jukeboxes, AWPs or pool tables, but features natural woods and lots of space.

Food accounts for about a third of sales, opening at 10am for breakfast and attracting lunchtime trade from surrounding offices.

The menus have been developed by the company's in-house executive head chef, Barry Evans, who has been with Fat Cat for six years.

Back in 1991, the two graduates had a lot to learn before they managed to get on the path to their current success.

Clutching a loan from Burton's regional brewer Marston's and supported by relatives, they took over their first lease in Bangor, where Saunders' family lived.

They invested £42,000 into creating the first Fat Cat Café Bar in just 1,000 sq ft, opening in January 1992.

By the end of the year the outlet had achieved an annual turnover of £250,000 which provided cash for a second leased site which opened in Chester in February the following year. After refurbishing Bangor in May 1994, they opened in Nottingham — Saunders' home town — in July the same year.

This site began a trend for the company which has strategically opened in areas which have seen a new customer base rise up around them. In Nottingham they were in the middle of nowhere but over the past few years the area has been transformed into the city's financial district.

"With Nottingham we realised that we were on to something good," Saunders said.

They opened their fourth Fat Cat in Leicester — their first freehold — in September 1995, which was later extended into a courtyard with its own garden bar.

Llandudno followed in November 1996 and Derby, which has become the current headquarters, in April 1997. They opened in the middle of Leeds' financial district in June 1997 and have invested in refurbishing older sites.

Fat Cat entered London for the first time in November, at Bow Wharf, a residential area halfway between Liverpool Street station and Canary Wharf. It is another area which is set for new investment and is already next to one of Regent Inns' successful Jongleurs comedy clubs and Bar-Risa bars.

This year it plans to continue re-investing and expanding to achieve "exponential growth".

"I wouldn't compromise location," Saunders stressed. "If there isn't a location in a city, then we won't go to that city for the sake of it."

They plan to open their largest outlet in late spring in a former hotel in Northampton, slightly off the main circuit in Bridge Street, another area that is ripe for new investment.

Turnover has risen from £250,000 in 1992 to more than £5.5million in 1998. It is expected to top £7million by the end of this year.

To cope with the expansion, the company has appointed its first operations manager, Alison Dilley.

The two directors, who are now 31, have a young team around them and manage to keep good staff. This includes the nearly appointed northern and southern area managers, 28-year-old Caroline Boad and Saunders' younger brother Gregory, who is 29.

The company is considering an AIM listing, probably by the end of 2000 when they expect turnover to have reached £8m to £9m. They have also boosted the brand with Fat Cat merchandising.

"Our success is simply down to continuous 100 per cent re-investment," Saunders said. "We have very little in the way of borrowings and we no longer have any outside investors or brewery loans.

"Since we are independent, we have a little bit more freedom to take chances, although there's more pressure on us to get it right. Every new site we open diminishes the risk.

"But we don't want to increase our gearing because we don't want to lose control or see the quality diminish — that would be failed expansion."