Me And My Partner: ROGER MYERS AND HUGH OSMOND
Roger Myers, 51, left accountancy to open a cocktail bar, Peppermint Park, in 1978. He co-founded Cafe Rouge and Dome, and established Punch Taverns with entrepreneur Hugh Osmond, 37, who built Pizza Express. They run 1,500 pubs and are buying Allied Domecq's 3,500 pubs for pounds 2.75bn
Wednesday 04 August 1999
Usually when we opened near each other, we'd get a dip in sales, but generally one helped the other. They were different enough and the market was big enough. We were friendly rivals. The first place I took my wife out on a date was Pizza Express.
Before I became a restaurateur, I was in the music business and spent a lot of time in cafes or bars, having a chat. I used to go to America regularly and would always come back with a hatful of ideas; something for a menu, something promotional. There were always bits of this and that.
Dome started as a cafe bar, just before all-day licensing came into effect. I realised that women never went into pubs, but they were much less intimidated by cafes where they could see into the interior. The ideal way of doing it was to have a continental bar.
Just a few years on, there's not that much in America which we don't see here now. Everybody's a plagiarist. You think, "I'll try this idea and that idea", then it suddenly dawns on you that you have 18 different concepts and you can't run them. Cafe Rouge started as the son of the Dome, incorporating all the good bits that we thought we could repeat.
Hugh and I operated in the cafe business for seven or eight years. Our chains came into their own when the going got tough, between 1990 and 1994, and people started to care about an extra pounds 30 on a dinner for two. But it was evident how crowded it was, and how much competition there was for sites.
When I sold the Pelican group to Whitbread, we had a party to celebrate the deal, and Hugh came. We started talking about what a huge opportunity pubs were - how they were under-exploited. We knew there was a business partnership in there somewhere. We ended up with the most tremendous hangovers. That was when Punch really got going.
Then we came across Nomura's sale of the Wellington Group of pubs at the same time. We started to work together on that specific acquisition, and put together a financial package. The more I worked with Hugh, the more it dawned on me that he had a brilliant, intuitive feel for figures. He's got a very keen analytical mind when it comes to understanding finance. He can read a sheet of information and come to the point extremely quickly and usually correctly - although not always. He's like a musician reading music.
I'm not bad at that side of things, but I'm not that good, and I decided I would leave all that to him and Alan McIntosh our finance director. At Pelican I did the deals, but since I've been working with them I've more or less drifted out of that side of things, an arrangement I love. I'm concentrating on trying to sort out what will become of the pubs, and revitalising them. Hugh has been in the City for three months; I've been on the motorway.
You can't impose themes on pubs: branding is a fiction. You don't go into a pub because it's a Firkin or a Big Steak - you go in because it's a nice pub. Customers are proprietorial about their pubs, and you can easily alienate them by putting in something they consider to be poncey: the only way you can do things is on a pub-by-pub basis. I don't believe in market research. It's common sense, trying to understand what the people around want. We came in as retailers: even now, pubs are still really brewery-led, but that's changing rapidly.
Hugh and I have fallen into what we do quite separately. We bump into each other in the corridor now and then: we don't present ourselves as a team. I trust his judgement and he tells me what he's doing. I give him my tuppenceworth, and I'm quite happy to talk like that.
It's quite relaxed at Punch, very different atmosphere from what you find in a corporation, but we're reasonably efficient at getting through a lot of work.
Hugh is very competitive, and I'm not. I'd never play him at sport. The only thing we fall out over is carpets: Hugh hates the ones I put in the pubs and we spend hours talking about it. But next time he goes on holiday, his office is going to be carpeted with all the samples that he despises - I'm carefully planning it.
HUGH OSMOND: I remember going to Roger's Peppermint Park in the early 1980s: it was one of the places to go in London. Roger is responsible for half the things that happened in the restaurant, bar and pub market in the UK. If you go back to 1975, there were pubs, fish and chip shops and Chinese takeaways. Peppermint Park was radical; the first real cocktail bar. Before, there was nothing around for young people.
I started running clubs and bars at university, and when I left in 1983 I went to America and ran clubs there for a while. Bars, restaurants and clubs are essentially the same - they're in the business of providing entertainment. You're not manufacturing or providing a service or function; your only role is to help people have fun.
I did a stint thinking I could run a computer company: I don't know what possessed me. I also worked for a small investment bank in Madrid. Then I came back and went into business with Luke Johnson. We spent time going backwards and forwards to the States, where there was a lot of eating out and going out.
I noticed in early 1990s America that there were any number of places you could eat a half-decent meal for $5 or $10. It was important if you were travelling and hadn't chance to cook. I used to eat out every single day because there were so many different places.
An American said to me: "There's next to nowhere like that in the UK." Ten or 15 years ago, even London - compared to New York or LA - was hopeless, and the provinces even worse. In big cities like Manchester and Reading, these eating places were non-existent. The only place was Pizza Express. Luke and I were big fans, and got interested in the idea that this could be the start of a chain. It had the quality and consistency to offer people at different establishments a decent meal for under a tenner.
After we had built up Pizza Express, I tried to sell Roger one of our chains, My Kinda Town, and he declined. Then he came to talk to us about trying to sell the Pelican group, and we wouldn't do that. I was becoming less actively involved in Pizza Express, and saw the cafe restaurant business had changed - from being a national disgrace to being extremely competitive.
People were selling three or four restaurants and wanting pounds 5m for them. To get into it would have been very expensive and difficult. For us to start from scratch wasn't appealing. If you think about what's essentially a similar business yet very under-exploited, pubs are an obvious thing. There are thousands of them in good sites.
Partly through Roger and I chatting about it, partly independently, we came to the conclusion that there was an opportunity there. I went for a meeting with Nomura about Wellington, and 10 days later Roger phoned and said: "Do you know, Nomura are selling some pubs?" After that initial purchase, the Punch estate came up.
Pubs shouldn't be run by brewery men in grey suits. There's no one who's been more creative in pubs and restaurants than Roger. Peppermint Park was was rocket science in the late 1970s. There's quite a number of people who have done something like that once, but Roger's done it several times and the industry has changed. When Dome arrived in Hampstead, there was nothing like it: people knew what croissants were, but couldn't buy them. It's still early days for Punch, but our investment programme for pubs is something genuinely different.
Roger and I get on with it and see each other occasionally. Unusually, he's creative but actually very efficient and good on figures. Other people are creative and impossible to work with. Roger pretends to be not that organised, but in practice his part runs like clockwork and you don't have to worry about it.
Roger is also one of the best people I've come across at knowing automatically whether a site is a good one, at seeing a site and knowing what should go into it. It's an incredible talent and only half-a-dozen people in the industry have it. When you find someone like that, you've got to hang onto them and throw the computers and market research through the window. Roger deals with what the pubs should look like and I'm happy to let him do that, although we have had disagreements about the carpets. And he's always got valid points about finance, which is my side of things.
If you get people working together who have been independent for quite a long time, the thing that cracks a partnership most quickly is when you step heavily on each other's toes. If you've got a partnership with somebody who's got a tendency to be equally unorthodox, you have to trust that person enough to say: "That's your bit."
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