City Pub Company founder: ‘Things will change, things will get better’

By Amelie Maurice-Jones

- Last updated on GMT

Looking back: Young's acquired City Pub Group earlier this month
Looking back: Young's acquired City Pub Group earlier this month

Related tags MA Leaders Finance Multi-site pub operators Pubco + head office Liverpool

Clive Watson, the founder of City Pub Company, looked back on his career at last week’s MA Leaders conference, having sold the business to Young’s earlier this month.

The conversation with The Morning Advertiser ​editor Ed Bedington called ‘Exit Plans’ took place in Liverpool on Thursday 7 March.

Yong’s recently completed its acquisition of City Pub Group, which comprises 51 wet-led pubs across southern England and Wales.

The deal, first announced in November last year, was estimated to have been worth £162m.

Watson has been in the pub trade for more than 30 years, after originally training as an accountant.

Now, he has co-founded and sold three businesses.

What drive him? “You want to be successful,” he said, “but it’s the people, it’s the pubs”. He enjoys going into pubs with people or on his own, having a pint and chatting to staff across the bar.

According to the former chairman, a good location is key to having a good pub. He tries to cover many customer bases with his sites. He wants students through the doors but wouldn’t want them to be ‘student pubs’, he likes tourists and shoppers who come in during the day, and also locals (as if you have a strong local guest base others will follow).

His experience has taught him to “stick to the knitting”. He added: “Don’t be in a rush, it’s not a numbers game.”

He said it’s better to have one pub that works before opening two sites, rather than going on a ‘treadmill’ of opening loads of pubs even when the current ones aren’t working properly.

Looking back

Watson added that it is important to work with staff, especially managers, to try and achieve what you originally set out to do.

He also advised “don’t try and do shortcuts”, learning from his own mistakes after buying two late night operations and realising he had no clue how to bring in punters post 11pm.

The founder is most proud of City Pub Company’s bonus structure. Managers get 10% of profits and each month has a different rate.

This is paid by the end of the following month which keeps staff “really focused” through adding the bonuses in with their monthly wages.

Having sold the pubco, Bedington asks if it’s hard for Watson to see another business play with his trainset.

Watson said his days of being CEO are probably “coming to an end”.

He’s looking forward to spending time with his second grandson and would like to mentor businesses at their fledgling stages.

His tips for selling a business? “Timing is everything”.

He said you need to sell when you’re in growth, not ex-growth, as nobody will be that interested when you run out of options.

Watson added that it’s important to keep the business simple, and do not have too many varying concepts, making it easier for an acquiring company to bold your business on to theirs.

He is wary of businesses that “sprout up all over the place.” Geographical clusters operationally make it a lot easier to run, and if you can, keep it as free-of-tie as possible, he added.

Are there still opportunities there for operators to build similar businesses to his own? “Definitely,” said Watson, “but you need energy, you need passion.”

Giving advice

He said: “We’ve all heard the doom and gloom but there are positives as well.”

While the market has struggled during Covid, and there hasn’t been as many openings, Watson believed there “isn’t that big of a decline” if you consider what the sector has been through.

He predicted community pubs would have a renaissance.

He advised operators to keep up to date with changes in the marketplace, adding that the pub trade is “definitely behind the curb digitally”.

Watson said the industry is resistant to change, but then when it finally happens, it thinks, ‘why didn’t we do that before?’

Staffing has improved, but he also said that once you have a good manager, you’ve got to nurture them.

He said: “Things will change, things will get better, the upswing has just taken a bit longer than normal.”

In the Budget he would have liked to have seen a reduction in VAT, as well as the tax of business rates transferred to massive tech companies.

Who does he admire in the sector? JD Wetherspoon chairman Tim Martin, despite being “diametrically opposed to him on his Brexit views,” has “stuck to his knitting pretty well over 40 plus years of running business,” he said.

Loungers is a business that he believes is also doing a “great job”.

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