Eclectic Bars plans IPO
The company plans to raise £10m to pay off debt and raise investment to accelerate its growth strategy of adding two or three sites a year to its current 19-strong estate.
AIM-listed Avanti Capital, which holds a 60% stake in Eclectic, will sell down its holding in the float, which is expected to give the company a market value of £20m.
'Renewed positivity'
Harley told the Publican’s Morning Advertiser’s sister title M&C Report that he believed there was a renewed positivity in the marketplace and the wider economy and, if successful, the float could cement the group’s position as the leading late-night venue operator with a truly national reach.
He also talked about the learnings the group attained from managing the former Premium Bars and Restaurants estate, consolidation in the sector, the strength of the group’s pre-booking sales and target locations for future growth for core brands Lola Lo and Sakura, plus forthcoming concept Dirty Blonde, which will make its debut on the former Madame Geisha site in the first quarter of next year.
Last week, the company announced turnover in the year ended 30 June 2013 of £21.2m, representing a two year CAGR of 16.9%, and group EBITDA of £3m, representing a two year CAGR of 16.7%.
Accelerating growth
Harley, who put no timescale on the IPO process, said: “I see a great opportunity to grow this business both organically and via selective new site acquisitions. The bar market remains highly fragmented and with our total focus on attracting a premium customer to the highest quality bar in the locations in which we operate we are well positioned to take advantage of the market.
“The potential of our brands allows for growth both from utilising different brands in areas in which we currently operate as well as new sites in our target towns and cities. The IPO will help accelerate this growth strategy.”
On sector consolidation, Harley said: “There is always talk about consolidation across every sector, but it is something we would maybe look at in time and if everything with the IPO goes well, but it is not on the cards at present.”
Future openings
Harley told M&C that the group had a strong pipeline in place for future openings, with Lola Lo and Sakura set to be the company’s growth brands.
Earlier this month, M&C Report revealed that the company had bought Coyote Wild in Victoria Street, Derby - its first freehold acquisition - from PBR for an undisclosed sum. The Grade II-listed building will trade in its current form until next year when the venue will be rebranded as Eclectic’s Polynesian-themed Lola Lo concept. It is believed to be close to securing an unnamed site in Manchester for conversion to Lola Lo.
It also recently acquired Brighton nightclub and live music venue Coalition from InnBrighton, which is set to trade under the same format for the next 12 months as the group assess what development opportunities there are for the site.
Harley said that Dirty Blonde, its New York-themed format, could eventually roll out to five or six sites and he revealed that Eclectic currently has offers made on “several” outlets.
He said: “We believe there are still plenty of opportunities to expand across the UK, but especially in the south east, in towns and cities like Brighton, plus inside and around the M25. We also have no presence in places like Leeds and Liverpool. Through managing the former PBR sites in these places we have been able to see how the circuits work there and take learnings from that. It gave us a good feel of the demographics and we are confident that we have the offer to work there as well.”
Harley said that the group’s weekend trade was underpinned by 80% of sales being pre-booked. “It is a strong part of our business and one we want to strengthen.”
