Since rescuing the country’s largest nightclub operator from administration four years ago, Peter Marks has sets about re-establishing its position at the heart of the late-night sector. With a new identity, new brands and a reinvested, reinvigorated estate, what does the future hold for the Deltic Group? James Wallin finds out
When Peter Marks led the cavalry to rescue Luminar in 2011, the business was mired in debt and relying on a series of cavernous nightclubs seriously in need of investment.
Fast forward to 2015 and the company has a new name and a new swagger. Its last full-year results saw EBITDA rise 18%, more than half of the estate has now received investment and it is broadening its reach with its new Bar & Beyond concept.
Marks admits he is conscious that the investors who backed him in 2011 are expecting an exit and feels the company has plenty of options open to it.
He said: “In late 2016, we will begin to look at our options properly and in 2017 summer time, we will refinance the business. It depends what the IPO market is like, what the appetite in the private equity market is like, how available bank debt is and what our own position is at that time.
“We would expect, within that time-frame, to be looking at a run-rate profitability of between £18m and £20m. We’re confident about our position.”
But, for now, there is still plenty to do. Deltic (from the Greek letter Delta associated with ‘change’) recently revealed the result of its record £3m investment with its Unit 7 site in Basildon, Essex. The club launched with a £100,000 opening week and has continued to set tills ringing.
But it is the Bar & Beyond concept and the related Steinbeck & Shaw that Marks hopes will be the key driver of growth during the next few years, giving the company the flexibility in choosing sites that nightclubs cannot provide. The first Bar & Beyond opened in Chelmsford, Essex, last month and Marks, pictured right, said the club has enjoyed a great reaction so far.
He said: “Bar & Beyond is one third Bar and two thirds Beyond. It is taking us in a new direction. Nightclubs are absolutely core to our offer but this allows us to stretch our offer a bit and do something different. “There is no dancefloor in Bar & Beyond – it is boothed seating and people dance in between.
“The retail offer is very much top-shelf and cocktails, and we’re even doing food. It’s not a vast menu – it’s about grabbing a hot dog while you’re out having some drinks with friends. We are using a well-renowned butcher, whose name means something in Chelmsford and we want to try to get some provenance wherever we go.
“Food is never going to be a big part of what we do, but we wanted a wider retail offer; we wanted to keep people from 7pm so we needed a food offer.”
The Chelmsford site is the first conversion from the eight-strong Chicago Leisure sites that Deltic bought a year ago. Marks said the company has committed to at least two more conversions (Basildon and Stevenage, Herts) and most of the remaining sites are likely to follow if the concept continues to appeal. The group will also look for sites to acquire for the brand.
Deltic has also opened the bar element of Bar & Beyond as a stand-alone site in Canterbury, Kent, and plans to adapt existing ground-floor units at Pryzm nightclubs in Bristol and Cardiff.
Marks said the concept is about bringing “a bit of London cool into the provinces”.
He said: “If you’re a cool young man or girl and you like going to London and you’re more ‘east end’ than ‘west end’ then guess what? We’re coming. Steinbeck & Shaw takes a lot of inspiration from what’s going on in London and translates it in a stripped-back, warehouse, edgy design.”
But he insists he is not looking to gain a foothold in London, adding: “We are more likely to buy a small group in London than open a single site but we have ab-solutely no plans at the moment to do that.
“If someone came to me with a flagship store in London, I would still probably think twice because I believe, if you are in London, you need an infrastructure.
“We don’t see London as a must-have. We are happy in the provinces.”
The company’s focus is now on growing its offer and better understanding the needs of its customers. To that end, it is investing in a “single customer view” data capture programme, which Marks describes as a sector-leading approach to communicating with revellers.
He said: “We are using the same algorithms that retailers Amazon and Tesco use to work out what you spend, what you like, whether you’re turned on or off by offers.
“We will bring in an analyst and a psychologist who tell us what it all means. We won’t spam people, we won’t ever sell their data, but we will be able to use the data to tailor the message for our customers.”
He said the data came largely from Facebook and it was illuminating how much could be extrapolated from a simple ‘like’.
He said: “A clever man in IT said that if you have 70 pieces of data you will know someone better than their friends. If you have 300 pieces of data on someone you know them better than their spouse or long-term partner. The average number of data pieces we have per customer is 370.”
Marks said he sees three principal ways in which the company can grow – continued piecemeal acquisitions, the rollout of Bar & Beyond and consolidation of the late-night sector.
He said: “Consolidation can often hold the company back while it digests the new additions. But there’s no doubt at all that it’s the one way you can make a big change to your profitability.
“Bar & Beyond gives us opportunities to look at sites we wouldn’t be able to consider for traditional nightclubs.”
Meanwhile the most important task for Marks continues to be delivering a great night out for patrons of the company’s 58 outlets.
He said: “It’s easy to get carried away with specifics but, ultimately, people will only come back if they have had a great night and we have to make sure everything we do is geared towards that.
“There is no doubt that the big nights are getting bigger and, if you don’t make the most of them, then that’s going to bite at the end of the year.”
