Personality Profile – Joe Robertson
City Leisure’s Joe Robertson is a rare breed of man. When he left his job as DJ at Newcastle’s Club a Go-go he was replaced by Bryan Ferry. He toured with The Crazy World of Arthur Brown and The Who. He managed Lindisfarne. He lived at London’s Intercontinental hotel for 13 years (paying the same rate the day he left as the day he arrived!). More famously, he subsequently earned £1m by introducing European Leisure to Midsummer Leisure. Along the way a stream of bars, firstly in Newcastle and then in London were created and sold for handsome profits. He has recently been tax-exiled to Monte Carlo but now finds himself returning more frequently in the process that should see him build the empire that he previously never bothered to hold onto.
Joe Robertson – the full explanation
How did you get started in the licensed trade?
I started in 1979, I was looking to get out of the manufacturing business I was in, which I found to be extremely labour intensive, we had a lot of turn-over, but a lot of staff, a lot of management and a lot of problems, so the idea of cash coming over a bar, the idea of people actually paying for something when they got it was very appealing.
I was working at the Club A Go-go in the 60’s that changed me from being whatever I was then to what I am now. Overnight I suddenly understood pop music and I understood nightclubs and discotheques. I moved out of “pop” because it wasn’t a proper business – people never went to work and as a young lad trying to make my way in the world I was looking for something a bit more positive.
After five or so years of manufacturing and all the problems that entailed, I wanted something which linked the old scene that I’d known – of pop and nightclubs, with a cash positive business and the one thing that I’d seen in London and wanted to emulate – and in this respect I was no different from any other Northern lad – was the Hard Rock. I’d been there in 1971, my mouth had fallen open and I thought it was bloody great. At that time I wasn’t thinking about opening restaurants – it wasn’t until 79 that I found somewhere which would do, albeit on a first floor location in Newcastle. That was called Humphry’s. I remember going to my licensing solicitor – who I still use – and he asked what I planned to do with the ground floor. I was going to create a reception area for restaurant quests but he suggested I applied for a public house license. Strange to relate – bearing in mind the attitude of the Newcastle police at that time, we got one. After we opened it took me no more than two weeks to realise that we were making money in the bar but losing it in the restaurant. It seemed as though I had just landed myself with another manufacturing problem. The bar had no manufacturing base, there was no quality control problem – provided you stocked proprietary brands. All you had to do was bring in some attention to detail. Bar snacks were just being thought of in the late 70’s in Newcastle. No-one even knew how to serve a gin and tonic properly. We bought in bottled beers as much as we could – you could get Fosters, Czech Budweiser, perhaps Michelob and we used to get Coors from a US Naval base in Scotland. Getting these things right gave the bar its success – it certainly wasn’t the design as all we could afford were soft velvets. From there we moved quite quickly. I imported some ideas from Germany for Rick’s Cocktail bar. I went to see John Henry in Birmingham and tried to emulate some of his ideas – like the lightshows. When we launched the cocktail bar at Rick’s half the staff left. However we ended up with a very extensive cocktail list which became a standard work reference for other bars in the area. You could actually go into another bar, ask for a cocktail and be given a Rick’s list.
“The one thing that I’d seen in London and wanted to emulate was the Hard Rock. I thought it was bloody great”
We then opened a very traditional pub called City Vaults for the city centre’s lunchtime trade. We had already established a clear difference between a night time and a lunchtime venue. This might be self-evident now, but at the time everyone was still on a learning curve. We built up an excellent lunchtime business and with the addition of music at night wewere able to pull in a younger crowd in the evening. That formed the basis of most of the bars we have opened since and I have always had the same team of people with me such as an in-house design team.
Where did Blueprint fit in?
My partner in all the businesses is Barry Nicholson, when in 87 we sold to Midsummer Leisure, it was part of that deal that the design business went with it. It was called City Design and it was Barry Nicholson. As I was contractually obliged not to open any bars for a year or two, Barry was free to continue working under the Midsummer banner and they changed the name to Blueprint. While he was with Blueprint he worked on Buzz in Cardiff and then came back to work with me. Buzz in London was his first scheme after this, although it would only be fair to say that Blueprint had a hand in it in so much as they moved on the design concept. At the same time we did Slap Harry’s in Brewer Street and Franc’s Oyster Bar.
Now we have moved the Buzz concept into something called Yel which have just opened in Newcastle and now there’s a Yel just opened in Leeds. We have also just opened Jimmy’z in Newcastle, Harpo’s on Earls Court Road. We are also building a Jimmy’z on Shaftesbury Avenue and we have licensing in at the moment in respect to other units in London and Dublin and Newcastle.
Humphry’s and Rick’s all went to Allied breweries in 83. There’s been a view that we build clubs to sell them. But there always comes a time when your burdened with debt, there are capital repayment programmes in with your debts, you’ve got valuable assets but you can’t get any further forward. Selling to Allied gave me a plateau from which to begin again. I began again with the various bars that I eventually sold to Midsummer Leisure in 87. Which included Macy’s and Duke’s in London and Cairo’s and Butler’s and four in Newcastle.
Was this an all-cash deal?
Cash and Shares. £3.7 in cash, £3 million in shares. We agreed the deal in August and the shares had put on about 20% when I got them in October and I remember thinking, ‘what am I doing opening bars when you can make money like this on the stock market?’ Then of course we hit the crash and they were reduced substantially – a third of their value I think. Also tied up in the deal was a clause preventing me from opening near one of those venues for three years, which is one of the reasons that, when I got started again, I went to Cardiff. That was a laughable deal because under a consultancy agreement I had with Midsummer, they asked me to go and have a look at Jackson’s in Cardiff. We were walking down Church Street and I saw a Berni pub that looked a bit dilapidated and I said ‘hang on guys, lets have a look in here’ they didn’t want to know so I went in on my own. Inside I found this cavernous great big place with nobody in it. Midsummer still weren’t interested so when I got back to the office I rang Berni and asked if they wanted to sell it and it turned out it was actually on the market for £160,000 so I bought it from them. I built a Buzz in it. When It was finished Midsummer wanted to buy it. They offered £1.2m for it. I sold it to European for £1.3m.
How long had you had Buzz before you sold it?
About seven weeks. You see I decided to become resident in France in 1989 and at that time I had three undeveloped units in Cardiff and London so I decided to develop them and sell them straight away. Both the London units – Slap Harry’s and Buzz we sold as a pair. Slap Harry’s was operating successfully, and as we came close to completing Buzz I began to look around to see who would be interested in buying them. Needless to say I had a strong expression of interest from Adam and also Michael Ward who came in with the right offer. It so happened that the deal co-incided with two things – firstly it was the beginning of a new tax year April 90 and also it was the day Buzz was completed for trade – thus we opened Buzz on the Friday and they took it over on the Monday – hence your article of the time – “City Leisure trade Buzz for a weekend” – Slap Harry’s however had been running for six to eight months and had proven profitability. European also had Buzz in Cardiff to draw on in terms of conceptual ideas when they were looking at Buzz in London. The only thing that wasn’t complete was the nightclub upstairs at Buzz which opened in the Autumn of 1990.
It was at this time you became involved with the European takeover of Midsummer
When I sold out to Midsummer, I didn’t really understand shares – except that everyone seemed to make money out of them. My shares in Midsummer had risen from £3m to £5.5m before the company did a couple of very silly things – namely the attempts to takeover Boddingtons and Leisure Investments. When the truth about Leisure Investments came out, Midsummer fell victim to what I would call “Lying down with pigs and coming up smelling of shit”. Subsequently the shares started sliding and we came to period of sustained high interest rates and people began questioning their investments. It became apparent that Midsummer had high borrowings and were incapable of large, sustained organic growth. On top of all that, they did a stupid thing when they bought Bruce’s Brewery and EJ Rowse in markets they could not control.
So, shares were coming down, the debts were going up, there would soon be no kudos in the company and it would be going nowhere – so now what am I to do? I rang the directors – who I didn’t know – and I put my points to them. And individually Paul Reece and John Glover agreed with me. They were looking for a way out and I was their agent. The only person I knew who I thought had the acumen and business brain to take it on was Michael Ward. I had just met Michael, for only the second time, to discuss selling him Slap Harry’s and Buzz. Only a few days after this I called him and said, ‘If you want to buy a business, why don’t you try Midsummer?’ At that time I saw European as something of a minnow – they had some nice units but not a lot else going for them – but they seemed set up to do the business. I felt that if you stuffed the two companies together and divested the wrong units in both camps you would reduce the debt and streamline the company.
So my problem was getting a way for Adam to talk to Michael. There was however a conference up in Scotland which Michael was going to. We knew that Adam was attending so we had to try and get them to stay in the same place. Then for some unknown reason Adam’s secretary rang Michael’s secretary and said “Adam thinks it would be a good idea if they had dinner together in Scotland?”. Michael Ward rang me up and said “What have you done?” I said “Nothing”, “So why has he rung?”
“Adam has since claimed he put the deal together – I’m totally relaxed about that – European gave me £1m for doing it”
To this day I don’t know whether Reece and Glover have given him the nudge or, and you can’t accuse Adam of being unintelligent, he’d been having all the same thoughts that I had been having and had also seen European Leisure as the only likely candidate. So they sat down together and Adam opened the discussion. He has since claimed that he put the deal together. I’m totally relaxed about that, they gave me a million quid for the introduction. I don’t need the glory, I’ll take the money. Anyway, in Adam Page’s inimitable style, he pulled out at the last minute and thus started the war that everyone knows about.
Did you think that Michael Ward should have gone?
I always thought that Michael seemed reasonably good at his job. It’s very subjective but I believe that from an investors point of view they needed to clear the decks because there was so much rubbish being thrown around and it was all being directed at Michael.
Until this recent spate of activity, the City Leisure portfolio had been temporarily empty….
I had disposed of everything when I sold London and the first concepts I have put together since then have been Jimmy’z and Yel in Newcastle. Most recently opened was Yel in Leeds, but we have loads of licensing applications running. I like Newcastle though, I understand it and I like London for the same reason and Jimmy’z in Shaftsbury Avenue is being finished today.
Should all the applications go through, how many will that be?
I hope that by the summer of next year, we’ll have a dozen. They are all virgin sites – mainly because these days you can’t afford anyone else’s goodwill and they won’t be for resale. Before selling anything, you should always know what you are going to do with the money, although having said that, in the current market conditions, no one would buy my venues at the value I put on them anyway.
Which begs the question, in this market, why go into that business?
Because it’s profitable – I think the recession has taught everyone to re-evaluate their business principles. In the 80s you could rely on capital appreciation market – got your name on the waiting list for a Testrossa and away you go and make a couple of quid for it. The values of actually working for your money has now returned. In the commercial property market, which is a large part of our business, you used to say ‘I’ve got an office block and it’s let and I get £100,000 a year from it so its worth a multiple of £100,000. In today’s market people’s first question is, ‘Who’s your tenant?’
So that’s what I’m doing these days – working for my money because I think the most important thing is that you can’t live on old money – only new money. If you’ve to a few grand in the bank you don’t start drawing it out and trying to sustain yourself, you have to keep it for more of a rainy day than the one at the moment, it’s the old Micawber principle.
While living abroad are you still the driving force behind City Leisure?
Yes, I’m in full operational control through general management. We have eight or nine strong management. I think Peter Stringfellow has given himself a pretty unenviable task when he went to Miami, Florida, New York and Los Angeles – I mean how far can you spread yourself unless you’ve left a damn good management structure in place? To some extent I stand apart from my company – I have never been to an opening night – I always let the manager run it and I go the week after.
In City Leisure there is a lot to be done – if we are not dong commercial property deals which are obviously few and far between these days, we are looking at other developments and ongoing maintenance and repairs, designing and evolving the present units, speculation on the future units. In Dublin, for example, we’re looking at a 60 bedroom hotel, a 10,000sq.ft discotheque and 8,000sq.ft bar.
You have never been heavily involved in the discotheque side?
No, this will be the third – Jimmy’z in Shaftsbury Avenue has a 2am licence, but we are looking at other disco operations elsewhere – I don’t see any problems with discos.
Are all 12 of your intended venues of a similar style design-wise?
No, designs move on because designers move on and the reason I have a satisfied design team is that they do what they want to do – the thing is to ensure that the conceptual approach to the trade is right.
Have you never thought about opening in France?
For the reasons I’ve just mentioned, control, I think it is easier to keep your businesses in the areas you know but I think in the future … I’ve looked a lot at European venues in the past but, for instance, in the south of France, the legalities and corruption are horrendous and that concerns me very much. Eastern Europe I have looked at very closely and I have had lots of invitations to do things there, but you have problems with currency conversion and so on, but I look at them, I look at them. But you only get so many hours in one day and small is a little bit beautiful – you get a hands-on approach to certain things, you can pay attention to style, attention to detail, maintenance and it’s a good business providing you continue to do that. I wouldn’t want someone to walk into one of my bars and say it was unkempt or dirty, that the lighting was poor, the sound was bad or the client base was disgusting – I enjoy the bar scene very much.
Which pre-empts the next question, why both with all this?
Well, in a perfect world I might have lived abroad forever, but the value of your investments deteriorates, viz. European/Midsummer Leisure. I do of course have other strings to my bow but I particularly enjoy this business, it’s a great buzz opening your own Buzz and seeing it to be successful
Personally speaking, do you like bars?
Too bloody true, I spend my life in bars. I read recently that you were supposed to have 56 units of alcohol a week to avoid heart disease – I looked at that on a Friday, added up my units and I’d only had 32 so I went out to get pissed.
“Before selling anything, you should always know what you are going to do with the money, although in this market no-one would buy my venues at the value I put on them anyway”
Thus spake Joe Robertson, a man who, without wishing to patronise, has the mantle of ‘character’ draped unmistakably over himself and everything he strives to achieve. His success rate in the past has been phenomenal, both in terms of putting together bars and putting together business deals.
He is prepared to confess that he has never built up an ‘Empire’ because the prevailing economic climates were more conducive to the movement rather than the gathering of venues. It is a reflection of the man that now the industry is bemoaning the fiscal state of play, Joe has decided the time is ripe to begin collecting operations.
By the time you read this interview Jimmy’z in Shaftsury Avenue will have opened and it will, of course be reviewed in the December issue of DM & Licensed Design.