“So, Richard…”
“Call me Dick. Everyone else does.”
“Well Dick, perhaps I should start by congratulating you on your appointment.”
“Thank you.”
“So, how do you envisage your role within the company?”
“Roland has given me free rein to do whatever I feel necessary to bring our estate back to profitability.”
“So you’re going to be flogging off a lot more pubs?”
“Err… well downsizing might well form one part of our overall strategy.”
“A fairly substantial part I would suggest. After all, with volumes going through the floor how else can you expect to generate the sort of revenue you need to remain viable?”
“Working with our partners we intend to restructure; focusing primarily on bringing additional revenue streams online.”
“You mean you’re going to continue hiking rents and drinks prices?”
“That’s not how we operate Bob. Many of our tenants are truly delighted to be working in partnership with us.”
“Well, figures released by CAMRA paint a rather different picture. 85% of tied tenants earn less than £15,000 a year, 60% less than £10,000. In many cases of course, that’s an income for two people. Would you be prepared to put in a 90 hour week for around 5k a year Dick?”
“Err yes well; it’s not just about the money. For many it’s a lifestyle choice.”
“Oh I see. And there’s me thinking people went into this business with a view to making money. So would I be right in concluding that you’re not looking for entrepreneurs?”
“Err…no, we are.”
“So let’s get his straight. You’re looking for entrepreneurs who aren’t particularly interested in making money. Isn’t that’s a bit of a contradiction in terms?”
“Err no, that’s not what I meant at all.”
Debt mountain
“OK. Well I’m glad we’ve cleared that up. Moving on, what would you say to those who think you’re only focused on the short-term?”
“I’d like to reassure everybody that this is most certainly not the case. Focusing purely on the here and now would be sheer folly. Why do you think we’d even consider taking such a short-sighted approach to our business?”
“A £2.4 billion debt mountain can be a pretty persuasive incentive.”
“Err well….I think reports surrounding our financial plight have been grossly exaggerated.”
“Really? Rumours emanating from the city suggest you’re about to default on loan repayments. In fact only this morning, a leading financial house downgraded your company to ‘zombie’ status.”
“This is nothing more than scare-mongering. Negations with creditors are on-going; it’s only a matter of time before we come to an amicable solution.”
“Dick, would you not concede there’s a strong case for letting your company go under? After all, many leading financial analysts argue that what little money there is would be far better targeted at financing new, dynamic companies that can help kick start growth. Propping up bankrupt old dinosaurs makes no sense.
Isn’t it fair to say you’re nothing more than an unnecessary burden on an economy already starved of investment?”
“As I said, our demise is greatly exaggerated. We’re currently in talks with our creditors as to how we can best resolve the situation.”
“So, in the meantime you’re going to ask already beleaguered tenants to give more. Why should they be obliged to pay the price for mistakes made in the boardroom?”
“I think you’re being a little cynical. We offer fantastic support to our tenants. During difficult times such as these, that counts for a great deal.”
Lost generation
“OK, let’s move on. There has been much talk of late about the ‘lost generation’ Do you accept that the overwhelming majority of young people have been alienated from pubs?”
“What makes you say that?”
“Look around you Dick. Do you see anyone in this pub under 40?”
“Err... now you come to mention it, no. How odd!”
“Isn’t it the case that you’ve priced the drinkers of tomorrow out of the market? And let’s be brutally honest about this; once gone it’s going to be bloody difficult to get them back, isn’t it?”
“It’s all about the offering Bob. Tenants simply need to up their game.”
“I’m sorry Dick but I’m going to have to push you on this. You see on-trade volumes just keep on plummeting; down 46% in the last decade with no end to the falls in sight. What grand strategy do you have to get people back into pubs?”
“Can I say something off the record?”
“Absolutely.”
“You won’t print it?”
“Of course not Dick, you can trust me.”
“You’ve switched the recorder off?”
“Yes.”
“OK. The fact of the matter is I haven’t got a bloody clue what we’re going to do Bob, none of us have!! I have this recurring nightmare of the beer barometer in freefall!! I keep waking up in the middle of the night, asking myself the same question. Why did we buy those fu**ing pubs?
What are we going to do? Nothing we try seems to work. Between you and me I think we’re all completely f**ked!! Of course I can’t say that publicly, it would be commercial suicide!”
Far from happy
“Well I admire your honesty Dick. Needless to say everything you’ve just said will remain completely confidential; you have my word on that. Now then, let’s move on to the government consultation. How do you see things panning out?”
“It’s just more red tape that the industry doesn’t need. Don’t get me wrong, we’re happy to engage in dialogue with government but I can only reiterate the sentiments of my colleagues. Self-regulation is working well.”
“Are you sure about that?”
“Why do you ask? Do you have any evidence to the contrary?”
“Well as you know, I’ve been out and about speaking to some of your tenants. It seems many of them are far from happy.”
“Well, as I’m sure you’ll appreciate, it’s difficult to please all of our tenants all of the time.”
“Well Dick, let me ask you this? How much do you think it costs to replace a door latch?”
“Err…I don’t know. A few pounds I suppose.”
“Well it’s funny you should say that because I’ve got a dilaps report here; one your company issued to a recently evicted tenant. It would appear door latch replacement is an extremely costly business.”
“Err really?”
“Yes, £650 to be precise. The same tenant was also billed to have a toilet seat replaced. Any idea how much that might have cost?”
“I have no idea.”
“A mere £385! How about having a door frame painted?”
“Err…”
“Another £250! Somebody’s having a laugh, aren’t they?”
“Err…well all I can say is that we employ only the finest craftsmen.”
“It’s funny you should say that because I’ve got a list of your approved contractors here. Now then, let me see …….ah yes, here we are. Billy ‘Broncho’ Anderson’s plumbing services?”
“Don’t let the name deceive you. Billy’s a top notch operator.”
“OK. Well here’s another one; a carpenter who goes by the name of Wild Bill Hickok!!
“There’s nothing old Hicky doesn’t know about joinery. He’s old school. Solid as a rock!”
“So, let’s get this straight. You’ve got Billy ‘Broncho’ Anderson sorting out plumbing and Wild Bill Hickok taking care of carpentry.
Who’s on the roof? Tonto and the Lone Ranger?”
“With all due respect Bob, I think there’s far too much negativity around at the moment; we need to promote the positives. It’s all about trust. We’ve got to inject that particular commodity back into our relationship with our partners, and that’s exactly what we’re trying to do.”
“Well it’s funny you should say that, because I got a call from one of your tenants this morning. Apparently, in one particular village you own two pubs. The tenant of one is on a substantive agreement; the other has been run by a holding company for the past two years.”
“OK.”
“Can you see where I’m going with this Dick?”
“Err not really, no.”
“Well you see the holding company enjoys low overheads. By virtue of that fact, they’re able to substantially undercut your tenant’s offering. After all, how can he possibly be expected to compete on price?
The net result is he’s close to going under. Do you not accept that your company has been instrumental in destroying the business of one of your so called partners?”
“I’m sure we’re endeavouring to provide him with all the support he needs during these difficult times.”
“Well it’s funny you should say that because he’s just received a letter informing him that you’re hiking his rent from £39,500 to £43,000. This on a turnover of £160,000 per annum! Is that your idea of support?”
“Well all our FMTs figures are calculated on the basis of viable market rent.”
“It sounds like a case of ever more fantastical mythical targets to me.”
“Don’t worry Bob; you’re going to see big changes around here very soon.”
“Many of us fervently hope so Dick. After all, that’s what we’re working towards, isn’t it?”