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Success is more about culture than profit margins, says founder of fast growing Loungers bar chain

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Written by: Admin | Posted 07 April 2015 13:27

Success is more about culture than profit margins, says founder of fast growing Loungers bar chain

Anyone who has travelled on the morning commuter bus from Clevedon to Bristol will know you find all sorts. But you might be surprised to learn the co-founder of one of the city’s fastest growing businesses is a regular on the X6.

Alex Reilley doesn’t drive, so public transport is how he gets around. He’s got plenty of miles under his belt as his Loungers cafe bar chain is growing fast. It now has 60 outlets, including eight under the Cosy Club brand and 52 Lounges around the country.

After starting in North Street, Bedminster, in 2002, Loungers has been a runaway success. The firm expanded aggressively in the recession, snapping up sites at knock-down prices, but the recipe for success has been the way it turned a bar business into an all-day revenue stream.

Pop into a Lounge between 9am and 11pm you’ll see people spending money, from the breakfast trade to the young mums, students and business meetings in the day to the after-work social or friends and families dining out in the evening.

Alex admits that when they started the business, it wasn’t all planned.

“A lot of what we did was happy accident,” he said. “We set out to do somewhere without food but ended up taking North Street premises that had a kitchen. We just wanted to open somewhere we could go to drink ourselves, it was very selfishly motivated.

“But that rolling customer base, doing business all day, was something we set out our stall to do from day one.

“Dave (Reid, co-founder) had seen the cafe bar culture in Australia and saw it wasn’t just about offering coffee but really good quality coffee, not just food but good food. People look at what we do and it looks so simple but it’s operationally complicated, that’s where our experience came in.”

Alex said the business evolves through the day, but it’s not something they have to create.

“We do very little to manipulate that other than light a few candles, dim the lights and perhaps the music is a little more upbeat,” he said.

“It just naturally happens. We have this chameleon operation where you don’t just have a lunch and dinner hit, you have people using the business all day, not necessarily spending huge amounts of money but active revenue streams. That’s the trick of our model.”

A big part of the success is the culture and feel of the business.

Rather like Waitrose, people actually demand Lounge bars in their towns rather than chase them out. It’s a good place to be. But then, once upon a time Starbucks was the cool new coffee shop from Seattle. Long before world domination and rows over tax.

So as Loungers grows – it plans to open 25 more sites next year – when does it stop being the friendly local upstart and become the big corporate monster?

“Hopefully it never happens,” says Alex. “We don’t believe you have to go through that loss of culture and identity. It’s very hard to keep as you get bigger, you get more scale and people see your brand more often.

“We’ve seen it happen to brands where people think the coffee doesn’t taste as nice, the cakes have got smaller or their comfy sofa has been changed for a hard chair.

“When businesses grow and grow aggressively as we have done there are lots of easy wins and potential short cuts you can take. To us they are compromise and they are a trap.

“Our decision making will always be based around if we had one site and one Lounge only would we be making these decisions? We’re not looking for the next trick to grow our margins.

“To protect and nurture the culture is a big challenge. It’s our biggest challenge.”

Alex thinks the firm’s Bristol roots help.

“When we go to other locations we are very different, perhaps because we are from Bristol,” he says. “Bristol does drum to its own beat so when we export that to other cities we are different to anything else already there. The South West has had a huge appetite for Lounges.

“We opened in Keynsham last year after a campaign from people on social media saying please open here and it’s been one of the busiest sites we’ve had. People tell us Keynsham has got better because we are there. If we were soulless I don’t think they would feel like that.

“We had lots of West Country suppliers in the early days and we’ve been able to take them with us. They grown with us, the likes of Bristol Beer Factory, Orchard Pig, Weston Cider, Clifton Coffee.

“We still use Bristol and Gloucester based build contractors. We believe partnerships in business are important at every level. We’ve been able to maintain a real West Country-ness about what we do.

“We’ll get people in Lincolnshire moan why our products aren’t from Lincolnshire but the West Country is at the heart of what we do.”

Another part of keeping that culture is employing the right people. In an industry which suffers from a very high churn of staff, Alex says Loungers does that by focusing on in its managers.

“We invest very heavily at general manager level,” he says, explaining the firm currently spends around £300,000 training managers.

“It’s about them being better managers. That has massively improved our staff retention at that level and that trickles down. If you’ve got stability in that role it encourages greater stability at a lower level.”

The firm, which now employs 1,500 people, takes what Alex calls a “back to the future” approach to planning.

He says: “We determine where we want to be on a certain time horizon, such as a number of sites by a certain time, and work our way back from that, identifying where the step changes are going to come.

“If you don’t set those goals, you won’t get to where you want to go. We flag up areas where we think we will need investment, such as creating a new position or another level of management.

“It means while we are growing it feels very natural.”


Name: Alex Reilley

Age: 41

Born: Leicester

Live: Clevedon, having moved to Bristol in 1996

Education: A-levels (twice after re-sits) then studied at Northampton University for five weeks before realising it was the wrong thing for me, and going back home to get a job in a restaurant.
First job: The Case, restaurant in an old suitcase factory in Leicester. It’s still one of the best restaurants in the city.

Downtime: I’ve got a young family, a seven year old daughter and four year old son so that keeps me very busy. We’re really busy with work so it’s socialising with friends or downtime with the family. I like eating and drinking outside of work and I play a bit of badminton. I’m happy to go to a Lounge or Cosy Club. It’s good to experience what other people are doing. I watch TV to relax, I liked Broadchurch and Downton but my favourite of all time is Twin Peaks, which is coming back next year. My favourite film is Heat.

Working day: I get the bus out of Clevedon at about 7am. Our head office is in Lower Park Row, Bristol. I probably spend about 20-30 per cent of my week there and the rest on the road (or rail) in existing premises or looking at new sites. I don’t drive so I travel a lot by train. We’re opening in Frome so I’ll spend a few days there. When we open a new site it’s still as exciting for us as the first one.


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