M&B puts more food on its menu for growth
Monday 03 May 2010
Pub and restaurant group Mitchells & Butlers is preparing to sell hundreds of pubs to focus on core brands and raise cash.
The All Bar One and Harvester owner has hired advisory firm Sapient Corporate Finance to handle the sale of at least 300 drink-led pubs, as it seeks to concentrate on mid-market eateries, according to reports.
The pubs firm announced it was to reshape the business in March following a strategic review launched in the wake of a boardroom coup.
M&B is now under the chairmanship of Debenhams boss, John Lovering, after key shareholder Joe Lewis succeeded in ousting most of the firm's top management in January.
The group has said for some time it wished to move away from the "wet", drinks-led pubs which have a relatively small food offering, in favour of those where meals are more of the norm. Traditionally, food has offered better profit margins than drink alone.
It is thought the planned sale of its so-called "wet" pubs could also net the group around £500m.
In news which may chill the hearts of real ale fans and traditionalists, the firm plans to invest in six brands, including Harvester, Toby Carvery, Crown Carveries and Sizzling Pub Co. It is particularly looking to develop smaller versions of Harvester and Toby Carvery in shopping centres and retail parks.
Harvester could double under the plans, with the current 171 sites growing to a potential 400.
Toby Carvery is earmarked for an increase from 133 to 300, while plans could see Crown Carveries expand from 111 to 300 venues, Sizzling Pub Co double to 400 sites, Premium Country Dining could go from 61 sites to 150 and Vintage Inns from 237 to 350.
M&B became embroiled in a bitter power struggle between its biggest shareholders, including the Bahamas-based billionaire, Joe Lewis, and the former chairman, Simon Laffin, at the end of last year. Mr Laffin lost his battle and was ousted from the board and fresh non-executives were installed.
Mr Lovering has been given an annual package of £350,000 at M&B. While this is £150,000 more than the former chairman Drummond Hall earned; Mr Lovering is taking all of his remuneration in shares.
M&B appears to have been one of the pub chains to have weathered the recession relatively well.
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