Co-founder & Chairman of Loungers, Alex Reilley

After a steady start, Loungers has grown into a £150m-a-year operator and a leader in the all-day, super-flexible eating and drinking space. Co-founder and chairman Alex Reilley discussed the business with CGA vice president Peter Martin at the recent Casual Dining show.

Ambitions

Despite challenges in the market, Loungers has huge scope for growth, Reilley said. A target of 400 has sometimes been mentioned—but “we look at it and think that could be quite a conservative number,” Reilley said. Whatever happens, Loungers’ founders and management team like the ride too much to get off. “We just enjoy what we’re doing—and doing it with each other… when you look at that camaraderie and fun, why would you ever want to end it?” he said. “We’re all extremely committed and excited about the future.”

A potential IPO

With the backing of Lion Capital, there has been talk of Loungers opting for an IPO, and Reilley said it could work well. “If the stars are aligned and the timing is right, then why not? It feels like it would be a really logical home for the business, and we should make a success of it on the markets… it’s an option you could realistically put on the table.”

Maintaining an entrepreneurial culture

Reilley pointed out that some brands have lost sight of what makes them special as they’ve grown—but Loungers is determined to avoid that trap. “You have to work a lot harder to keep the business special… [but] we think we can grow the business to be extremely big without it becoming too corporate.”

Location planning

Loungers has only closed four sites as it has grown—the result of careful selection and a refusal to pay over the odds on rents. “We’ve not allowed ourselves to be seduced by sites where we think we could do really well but where rents are high,” Reilley said. That strategy is likely to keep it away from central London. “It’s not that we’re worried about London—it’s just that we see so much opportunity elsewhere.”

Data

Reilley said Loungers was “a bit feedback obsessed”—but makes sure that all its data analysis comes back to the needs of its core constituents: customers and staff. “It’s about recognizing what’s important—cutting through the white noise,” he said. “If we’re making decisions at head office that don’t impact in any shape or form on either our people or our customers, we’re putting investment into things we shouldn’t be bothering with.”

Drinks

Loungers has surfed the wave of interest in higher quality and healthier drinks that CGA has measured over the last few years. “People are drinking less but they’re being a lot more particular about what they drink… they’re aspiring to something that is a bit more innovative,” Reilley said. “They’re not being driven by volume, or even necessarily cheap prices.”

     

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