Raising the bar
We talk to Simon Longbottom, CEO of UK pub company – and Barclays client – Stonegate, about following in his father’s footsteps, the challenges facing the drinks industry – and why the “hard work and fantastic service” of the people pulling the pints is at the heart of any pub’s success.
When Simon Longbottom accepted a job as General Manager at the Old Vicarage pub in Bournemouth, UK, he probably hadn’t given much thought to his career over the next two decades. Fast forward 25 years, and he’s still as passionate as ever about the drinks industry – working as CEO of pub company Stonegate. “I was always drawn towards the industry,” says Longbottom. “My dad worked in pub retail for 35 years and as a kid I could see how much he loved his job.”
Longbottom followed in his father’s footsteps, moving from pulling pints on the south coast of England to leading a company with almost 750 sites nationally.
Stonegate was founded in 2010 by the company’s current Chairman Ian Payne, who had noticed a significant dip in the quality of pubs in the UK and resolved to do something about it.
“In 2010, we saw what we believed was the death of the pub,” says Longbottom. “A lot of the leading companies were struggling in terms of cash and much of the industry was moving its focus towards food. For us, that was the perfect opportunity to lead the renaissance of the classic British pub.”
Backed by private equity funding, Stonegate purchased around 330 pubs from brewery Mitchells & Butlers. The company now owns more than double that figure, including well-known brands Be At One, Slug & Lettuce and Australian-themed sports bar Walkabout.
For Longbottom, Stonegate differs from its competitors in its commitment to invest in the venues it owns – something he believes positions the company’s pubs at the heart of the communities around them.
“Every six years, we invest on average £250,000 in every single pub that we own. It’s a sizeable amount, and one our communities really appreciate.”
It’s not just the bricks and mortar that Stonegate invests in, but also its staff – the company is passionate about hiring the best people in every area of its business, providing all employees with the opportunity to develop and rise through the ranks.
“The most important thing – in any pub – is the folks behind the bar,” says Longbottom. “It’s their hard work, and their fantastic service, that is going to encourage customers to spend money and enjoy themselves.
“That’s why we are so committed to developing our team here. We’ve got a really visible career ladder that moves people from working behind the bar all the way to corporate roles. Of our 46 area managers throughout the business, 20 of them were previously general managers and have been promoted internally – and we are very proud of that.”
Longbottom firmly believes that Stonegate’s focus on recruitment is its greatest strength, but, on the flipside, that it’s also the company’s biggest challenge – particularly with the uncertainties of Brexit on the horizon.
“Like any other industry, we simply don’t know what is going to happen in terms of Brexit. My biggest concern is around people – in London, a third of our workforce is made up of EU nationals and we don’t know what challenges we may be facing.
“But these challenges won’t change our ambition, or our plans for growth going forward.”
Such plans for growth make it all the more important that Stonegate partners with a bank it can trust, something the company has been doing with Barclays since 2011.
“It’s all about building a relationship,” explains Longbottom. “It’s important to have a good level of understanding in business – if we lay out growth plans to Barclays, then it’s important for us to deliver on that growth. Equally, if we need to borrow to stimulate the business, we know we have a bank that we can rely on.”
In 2013, Barclays recognised that Stonegate needed to diversify its finances and was in the unique position of introducing colleagues from Barclays Investment Bank to help the company do just that. Mike Delay, Barclays Relationship Director, explains: "We understand the industry through our hospitality and leisure focus, but we also have the know-how in the finance markets."
It was that relationship between Barclays and Stonegate which led to the placing of a £400 million bond in the company, which was the first of its kind in the sector.
So, after more than two decades in the industry, from pub manager to CEO, what are the biggest changes that Longbottom has seen?
“In terms of the pub being a place to socialise with family and friends, things haven’t changed, which is great,” explains Longbottom. “But I think the experience is far better than it used to be. When I started, there was this idea that certain people could only buy a certain type of drink. Whereas now there’s a wide range of beers, spirits, wines and soft drinks for everyone to enjoy.”
“Oh, and the toilets are far better,” he laughs. “An often underestimated but important part of the pub experience.”