Revolution's in retreat

Another "drinks revolution" is feeling the pinch. Old timers will remember the infamous red revolution ­ Watney Mann's desperate attempt to remain a top brewer. Now it is Inventive Leisure's vodka revolution that is under pressure. Until the last month or so Inventive seemed to shrug off the trials and tribulations which have afflicted so many trendy bar operators. Its Revolution chain, specialising in vodkas, seemed immune to the downturn that has hit many bars and its shares achieved a 141p peak as profits surged from £3m to £3.6m. Last week they bumped along at 86p with Anne McMahon, a drinks analyst at City stockbroker Seymour Pierce, branding them a sell. What had appeared to be an inspiring revolution was suddenly in ragged retreat. In the first 13 weeks of its current year the Revolution chain suffered a setback but understandably took the view it was ill equipped for the heatwave and trading would improve as the sun lost its strength. No such luck. There is little sign of the expected recovery at its 40 outlets, so beloved by students. Naturally Inventive is taking remedial action. Its drinks portfolio has been extended, more emphasis placed on food and costs cut. With the stock market blissfully unaware that the trading decline was continuing, chief executive Roy Ellis felt obliged to issue last week's warning that profits would not reach the heady hopes nursed by the investment community. So forecasts were cut, although Ms McMahon and others still expect reasonably handsome advances. She is going for £4.1m this year and £4.9m next. But she is worried about Inventive's revolution. She frets over strategy and wonders whether management "has enough plc (public limited company) experience" to overcome the group's difficulties. Inventive's revolution is, I suppose, small beer compared with Watney's assault on drinkers. Worried by the decline in its once pace-setting Red Barrel draught keg, it renamed the beer Watney's Red and, as part of its red revolution, painted its 5,000 or so pubs a garish, unappealing red. The whole exercise flopped. It could be argued that if the brewer had remained on the ball there would have been no need for Watney's Red, which probably became the most despised beer in the country. Red Barrel, developed in the 1930s, initially for the export market, had taken off on the home front after the second world war. In a bid to out smart rivals Watney's tampered with its formula and the beer became a pale shadow of its former self; hence the desperate relaunch. Grand Metropolitan (now Diageo) swallowed the brewer after a fierce takeover battle and Watney's Red was killed off in the late 1970s. I am not suggesting Inventive will go the same way as Watney's. Its niche Revolution bars have done well, but the chain needs to expand its appeal. After all students can be notoriously fickle. Clearly its management faces a testing time. It was only a little while ago that Inventive was talking cheerfully about extending its Revolution chain to around 80 bars. I suspect such an ambition will now be shelved as Ellis and his team gets to grips with what has become an uncomfortable hiccup.