Steve Thomas's last dance

What did for Big Steve Thomas? The PMA Team gives a personal view of Luminar's departing boss.

Looking back over the past six months the clues were there that Steve Thomas's 22-year career at Luminar was drawing to a close.

I received just the one "hair dryer" phone call and this time Scary Steve's heart didn't seem in it. He also accepted this magazine's invitation to address our Responsible Drinks Retailing Conference in October. His presentation was a surprise. Instead of his trademark bullishness on Luminar's behalf, we had a more reflective Steve admitting that he had dropped his standards and joined the discounting mob on occasion.

Sitting next to me later he chuckled away at the myriad of minor and major hypocrisies we were hearing about licensed retail from the stage. Then I received a text message from him on New Year's Eve wishing me well in 2010.

It was a bit of a surprise, really.

Like a number of people, I've had more than a few bruising run-ins with Big Steve over the years. The news of his departure from Luminar provides context. As his time at the head of Luminar was drawing to a close it's natural enough to make a few friendly gestures and to drop your guard, isn't it?

His departure is still a bit of a shock, like it always is when a major part of the trade landscape changes. Looking back on his 22 years at the head of Luminar he can take pride in a lot.

To my mind, he's the Brian Clough of licensed retail, an exasperating genius. You never quite knew what he would do or say next — his unpredictability invariably stemmed from his uncanny ability to predict change and keep Luminar one step ahead in the game.

Understanding the late-night market​

He survived so long because he had an unrivalled understanding of the late-night market. He understood what amounted to a great night out and consistently delivered it. He had an instinctive feel for how a nightclub should look and feel — and was ferociously demanding in ensuring every penny of capital investment was spent wisely.

The returns on investment were invariably industry-leading. His nearest contemporary is Wetherspoon founder Tim Martin, in the sense that Luminar grew to a dominant position because of retailing success replicated site after site. Also like Martin, he started with a single site.

His unlikely first was a pretty ordinary boozer in Kings Lynn's Norfolk Street, which he transformed (without a lot of capital) into a Chicago Rock Cafe with a late licence — and was an enormous success because it was a brilliant concept. He opened a nightclub in King's Lynn and quickly carved out a late-night monopoly in the town.

A second Chicago Rock site in Luton took extraordinary amounts of money — and for the rest of the 1990s his Chicago Rock Cafe and nightclub openings were a continuous story of success. His brands, which include Liquid, Lava/Ignite and the mighty Oceana, still set the standard in late-night entertainment. The Luminar estate eventually grew to 300 nightclubs and late-licence bars, but currently sits at a reduced figure of 90 larger nightclubs. What went wrong, though?

The immediate answer is a series of profit warnings — the recession, relative student poverty and the Licensing Act all played their part in chipping away at Luminar's bottom line. The relative decline of Luminar, though, is a longer story — and there's not a lot that Thomas did wrong or could have done differently.

Okay, Chicago Rock Cafe, the cornerstone of Luminar success in its first decade, became over-expanded and then under-invested. But the changing regulatory climate kept doing the company damage. Chicago Rock's success was contingent on a post-11pm monopoly — late licensees were rare and therefore the brand could capture a large chunk of the post-11pm revellers and charge them an admission fee.

The tide​

Before the turn of the millennium magistrates became more liberal in the granting of late licenses. It became hard to cobble together a growth story at Chicago Rock when more and more pubs were being allowed to compete after 11pm. Luminar's fierce rearguard action in opposing late-licence grants for others at magistrates and Crown Court was an implicit admission of the truth — its market position was vulnerable.

Eventually, as the Licensing Act came close to being implemented in 2005, Chicago Rock and its sister concept Jumpin Jaks had to be sold. The same became true of his smaller nightclubs. The world of nightclubs sees the tide come a long way in and go a long way out in relatively short time frames.

Again, Thomas's ingenuity in off-loading weakened parts of the business was impressive, in both timing and solution terms. What's left of Luminar is 90 of the UK's finest nightclubs still delivering outstanding per site EBITDA. But again, the climate is unfavourable.

Last year, at the time of the company's fund-raising, he was proposing a growth story based around the towns and cities that currently don't have a Luminar venue. This time, though, it was a little less convincing and it's now clear that the company's institutional investors were losing patience as 2009 progressed.

The world of nightclubs is the part of licensed retail most like politics — careers tend to end on a low note rather than a high note. But there's no doubt Thomas's successor has enormous boots to fill.