Shaper: Alex Reilley

Show aired on 3rd November 2018

Transcript

Elliot Moss
Welcome to the Jazz Shapers podcast from Mishcon de Reya. What you are about to hear was originally broadcast on Jazz FM however music has been cut or shortened due to rights issues.

Welcome to Jazz Shapers, I am Elliot Moss, you are listening to the place where the Shapers of Business join the Shapers of Jazz, Soul and Blues. My guest today is Alex Reilley, Co-Founder and Chairman of Loungers, the nationwide café, restaurant and bar group. Having spent years in the restaurant and bar trade, Alex and two friends, Jake Bishop and David Reid decided it was time they did their own thing and their motivation was simple and completely and utterly brilliantly selfish – they wanted somewhere to drink themselves. Nearly sixteen years later, Loungers has quietly and rapidly expanded to more than 130 suburban sites across the country, yes you heard me right, 130. With the business split between two brands the Loungers which serve as local cafes and bars and the slightly more premium Cosy Clubs. Each restaurant aiming to give a nod to the location’s history. Alex, thank you firstly for joining me.

Alex Reilley
Pleasure.

Elliot Moss
It is extraordinary how vibrant our economy is and how many entrepreneurs are out there and always, you would think I would get bored of this after all the years I have been doing it, but I haven’t because I find someone and I look at their story and I go wow. Tell me a little bit about how this wow business, this business with over a 100, I don’t know what you call them… cafes, bars, restaurants, I mean it looks like they are doing all sorts of things – tell me how this happened because you were a naughty boy, five weeks into your University course you decided it wasn’t for you is what I’ve been told?

Alex Reilley
It is correct.

Elliot Moss
You weren’t really naughty obviously.

Alex Reilley
I wasn’t naughty, I think it was… I had a bit of an epiphany I guess. It was that stage in your life when people are asking you, particularly your parents, what do you want to do with the rest of your life and you sort of think well I still feel like a child, I want to be a child and I don’t really fancy the idea of dealing with what the rest of my life might mean and…

Elliot Moss
Don’t you feel like that now though?

Alex Reilley
A little bit, I don’t really know how all of this has happened but it has, it’s lovely but back then it was very much a case of not knowing what I wanted to do and I guess going through the motions of further education and feeling that at least that’s kept my options open and I could perhaps do something that I enjoy doing. I had taken a year out before I went to University and decided to do some travelling with Jake who is my best friend and Co-Founder of Loungers, and in order to raise money to go travelling, got a job working as a waiter in a restaurant and I guess at that point realised that that was what I wanted to do, it was something I really enjoyed, surprisingly I was quite good at it.

Elliot Moss
And what did you enjoy about it just at that time because, I mean for lots of people who are in another job or trying to get somewhere else, waiting is tough work? There was obviously something that was different for you at that point?

Alex Reilley
I enjoyed the fact it was hard graft and, I guess the hours which you hear lots of people refer to as being anti-social were suiting me quite well, I was never really much of a morning person, I was always a bit of a night owl, and so working in a restaurant, working until late at night suited my lifestyle I guess and I just enjoyed the theatre of it, the fact that you were in an environment where essentially you were doing the same thing day in day out but each day was always different, different customers, different levels of custom, different challenges, and I just enjoyed, you know, food and drink and enjoyed learning about it, I found it really interesting and it was exciting, you know, I got out of bed in the morning and went to work and really enjoyed it and I thought, well this is the kind of thing that I’d like to do for the rest of my life, much to the despair of my parents and everyone else around them. So, having done that for a year then travelled and then gone through the motions and gone to University and just thought, actually what am I doing, this isn’t what I want to be doing now, I want to learn more about the restaurant trade, I basically made the sort of snap decision of quitting University five weeks in and approached the restaurant I had been working at previously and said, look I am really eager to learn, is there something you can do to help me and they put me on a sort of path of sort of management training which enabled me to learn a lot about, more about the restaurant in terms of, you know, how it works, operated financially and I have learnt a lot about wine and all of that sort of stuff and it just, you know by that point the flame was very much, was burning within me to sort of progress within the eating and drinking industry and I’ve not looked back since.

Elliot Moss
Tell me about how you got the first, your own Lounge open and what that led to because, again what I’ve heard is you had to literally borrow from the left, the right, the middle, the up and the down, to make this thing happen and people need to know that it isn’t always just, yes I borrowed X and it was easy. It wasn’t like that was it?

Alex Reilley
No, and I think, so I moved down to Bristol from Leicester which is where I herald from originally in the mid-nineties and, as did Jake who co-founded the business, and we met and the third Co-Founder, a chap called Dave Reid who was Area Manager for the restaurant group that we were working for down in Bristol, and we would sort of have conversations normally sort of fairly late at night, drunk in a bar or a club or over the odd occasional time when we had opportunities to go out and have a meal, about what it would be like to open our own place and what it might look like and what we felt was potentially missing in Bristol, and then Dave went travelling for a couple, basically a couple of years, and when he came back in late 2001 he sort of said, look I’m back to open something and I would love you guys to be involved in that, and in all honesty both Jake and I had really good jobs at the time, I mean I had worked my way up to Operation Management level of a small restaurant group in Bristol which was a role I really enjoyed, just bought my first house, it felt a bit reckless the idea of sort of quitting my job and throwing all my efforts and energy in taking a huge risk with financially to open my own business.

Elliot Moss
But you did it anyway.

Alex Reilley
Yeah, well it was interesting.

Elliot Moss
You don’t look like a reckless guy, that’s what’s funny, you are saying this and I know where this is going because you did give it up and you went for it.

Alex Reilley
Well, it was interesting because what we agreed was, Dave would run it so we would put some money in and Dave would be the one that ran the business on a day-to-day basis and Jake and I would have the opportunity to have input into how it was run and we could share an experience. And I think, you know we basically opened somewhere for very selfish reasons, we wanted somewhere to go ourselves and that was sort of where we started from in terms of what we felt we couldn’t get in Bristol as it was at the time, and also the fact that we could see that suburban areas of cities, specifically Bristol obviously at the time because that’s where we were living, were changing massively in terms of young professionals moving into areas that had perhaps historically been considered to be unfashionable and a lot of these areas had really strong secondary high streets with lots of independent traders on and we felt there was a place for an all day style café/bar operation where people could use a lounge as it became called from 9.00 in the morning to 11.00 at night for whatever reason they needed to be using it during the, at that particular point in the day or in the week. So, we wanted to open something that was very broad in its appeal and didn’t try and I guess pigeon hole experiences, it was very much more about having somewhere where you could pop in for whatever you fancied without feeling as if you were sort of in some shape or form out of kilter with what you should be ordering. So, we opened the first site in August 2002. We basically cobbled together £30 grand between the three of us, remarkably we managed to get a bank loan of £20,000 and somehow managed to open our first sort of ten table café/bar in a suburban area of Bristol on a street called North Street and had no contingency for failure, didn’t really entertain what might happen if it didn’t work, but I think we had a belief because of the fact that we had worked in the industry, all three of us, for our professional lives that we knew what we were doing which I think is a big tick in the box, lots of people open food and drink businesses with no experience whatsoever thinking it would be a nice lifestyle thing to do and low and behold they often fail more often than not, and I guess what we felt was missing in Bristol was clearly what a lot of other people felt was missing and consequently our little café/bar was packed from, you know morning till night and very quickly conversations developed about the possibility of us doing another one and, I guess remarkably looking back, we opened our second site within ten months of having opened the first and the second was bigger and it sort of took more money and it made us realise that actually we had something that could be replicated and it was successful in that it was like nothing else that people had encountered, it sort of bridged the gap between a coffee shop, a bar, a pub, a restaurant and people love the fact that it was very democratic, we weren’t looking to specifically attract certain people from society be it their demographic or their age, it was very much a broad church and we just had this rolling customer base of people that used us throughout the day for whatever their needs were and it just meant that we were constantly busy and it was, you know it was successful.

Elliot Moss
Fifteen years later, just how many are there now?

Alex Reilley
We just opened our 135th site in Tewkesbury on Wednesday.

Elliot Moss
Not bad eh? Come back to more about how Alex and his team, his friends, and we’ll talk about that as well, how his friends have managed to do this. He will be back in a couple of minutes. But right now, it’s time for some words of wisdom from our programme partners at Mishcon de Reya for your burgeoning business.

There are many ways for you to dip into the rich pool of former Jazz Shapers and indeed to hear this very programme again. You can ask Alexa to play Jazz Shapers and there you can hear many of the recent programmes or if you pop Jazz Shapers into your favourite podcast platform you can also enjoy the full archive. Right now, here in the Jazz FM lounge it’s Alex Reilley, he’s the Co-Founder and Chairman at Loungers from humble beginnings, £30 grand cobbled together plus a bank loan, there was one and suddenly there are 135, that’s incredible. Just if you can throw your mind back, as you open the doors on day one of your very first lounge, your very first place, what did that feel like?

Alex Reilley
Slightly terrifying but ultimately, amazing. I remember distinctly that our first customer who wandered in almost as if we had always been there, you know obviously we were sort of Oh my god, it’s a customer who is going to spend money with us, and she ordered a cappuccino and I think we drank pretty much every sip with her, it felt amazing you know to having, you know served thousands of people personally working for other people to then, you know seeing someone being served in your own establishment is a remarkable feeling and it was a real buzz.

Elliot Moss
Was the, and do you try and recall that every time you go and open another one? Do you talk to your teams in there and say this is what I want you to feel? I mean, does it get like that? I mean, I wouldn’t know because I haven’t opened my own bar or restaurant but it sounds to me that’s what you would probably try and do, you personally.

Alex Reilley
Yeah, it’s I mean it’s difficult obviously personally to do that when we are opening effectively a new site every two weeks. I think we’ve got lots of disciples within the business, we talk about, you know the business being a bus and people being on the bus and clearly when you are in a business that’s grown so massively, you know we employ over 3000 people now, you have to have lots of people that are almost infected with the sort of same kind of buzz and same kind of enjoyment and just general complete belief in what we are doing as a business and I think that’s one of the reasons why we have continued to grow successfully is that we always want to ensure that what made the business special from day one is still very much alive in the business and it has not been compromised out of the business in any shape or form.

Elliot Moss
I mean, that’s a lot of people Alex, 3000, that’s a lot of lives, a lot of people that are earning money to feed themselves, their other halves, their families, I mean that responsibility that you did not have, you had different responsibility back then. Do you think about it or do you just think hard about how you are going to make it great?

Alex Reilley
It’s wonderful. We have, our staff party, we have a staff festival where we get all of our teams into a field in Wiltshire and have what we call Lounge Fest, which is an all day festival with lots of live music and fairground rides and free bar, free food and I guess on that day every year you really get to sort of, I guess appreciate how many people we do actually employ. You look at this field full of people and think, my word all these people work for Loungers which given where came from and the little idea we had sixteen years ago, it sort of feels like a huge achievement but I think, you know, you are right it sort of, we are only as good as our people, the idea that we had in 2002 I think is very much not only alive, still alive in the business now but it’s better than it’s ever been, and that’s only down to the quality of people that we have an I guess the sort of the journey that we’ve been on and the fact that we’ve got all these people that want to be part of that and feel that they’re contributing to the journey and the success of the business going forward and that’s hugely rewarding I think to feel that you’ve got such an engaged workforce because at the end of the day, you know, they’re the ones that are dealing with the customers on a day-to-day basis and they’re the ones that are making it happen.

Elliot Moss
And the relationship, briefly, between you and Jake and Dave. Still friends? Still working together all three of you?

Alex Reilley
Dave exited the business in 2012.

Elliot Moss
Okay.

Alex Reilley
Very much on, that was his, what he wanted to do. Jake is still within the business on a full-time basis, we’re still very, very good friends, Jake and I are still best mates. Dave lives out in the south of France now, lucky him, we went to see him a couple of weeks ago and it was great seeing him and we had a good time and, I guess you know, we’ve shared in something completely unique but I think one of the nicest things about our story is the fact that we are an example of friends that have gone into business and made it work, it doesn’t necessarily always result in complete fallouts and breakdown in relationships. I think if you’ve got the right kind of personality, personalities that complement each other, you can make it work in business as well as friendship.

Elliot Moss
You have also had other people involved in the business of course. In 2012, there was the event that you had, I think, was it earlier than that or was it 2012?

Alex Reilley
2012, yes.

Elliot Moss
2012 with the Piper Private Equity gang and then 2016, again you went with the Lion Capital Group. What’s it like working with these fine people from the world of private equity? What’s it been like for you?

Alex Reilley
I think it’s been a lot of fun actually which is not a word that you would probably automatically associate with private equity. I think there’s a lot of misconception about private equity, people are very almost fearful of them and they would see them as being overlords, I think we were very deliberate in picking private equity partners that we felt would complement the business, would add value to the management team and the board table and help us grow the business and make the business better, but fundamentally people that we knew we would be enjoying the experience with and, I guess we have always viewed private equity investment as being a partnership, they’re sharing the business with us, particularly those of us that founded the business, so there’s no sense of it being suddenly we are working for someone you know because they own a majority stake in the business as Lion do. I think we feel very keen to ensure that that kind of sense of sharing the experience and partnering in the business is alive and we all recognise that whilst there are slightly different agendas with regards to private equity, fundamentally if we focus on making the business better and improving in the business then that is the ultimate focus, we’ll all do well out of it and we’ll be successful.

Elliot Moss
I am assuming it means that you couldn’t have grown quite the way you have grown without the injection of their capital and their advice, is that fair?

Alex Reilley
Interestingly, the 2012 deal came about because Dave had put his hand up and said actually if the bus could stop I wouldn’t mind getting off.

Elliot Moss
Right, so he wanted his share.

Alex Reilley
He wanted, he had an idea about what he wanted to do and that didn’t involve being in Loungers any more. We would have probably been able to continue growing the business as aggressively at that point had we not had Piper’s involvement. That said, Piper brought a very refreshing, very different, point of view to the table which challenged the management team, made us better as a management team and ultimately if we are better as a management team the business, as a consequence, improves. And I guess once Piper exited as obviously these PE guys have a habit of doing, we deliberately picked Lion because they had similar credentials to Piper in that they were just exclusively consumer brand focussed and private equity backers and they have a great track record and we believed that they would also bring something to the table perhaps that was different to what Piper had brought and I think that’s proved to be the case.

Elliot Moss
Stay with me for my final chat with Alex plus we’ll be playing a track from Aretha Franklin, that’s coming up in just a moment here on Jazz FM.

That was Aretha Franklin with Let The Good Times Roll, and Alex Reilley has indeed been having some good times since he set this business up sixteen years ago or so with his Co-Founders. What does the future hold Alex? Because it feels like you said, you are opening every two weeks, you keep growing. Is growth fun? Does it stop being fun when it’s too big, when you lose, I mean do you have any control in the way that want to? Or is it a different kind of management distance and you’ve just accepted that?

Alex Reilley
Growth is addictive.

Elliot Moss
Is it?

Alex Reilley
Very addictive, I think it’s one of the reasons why we perhaps enjoyed success in the early days because we resisted the need, I guess to potentially bathe in the sort of the benefits and the sort of good financial rewards of the business in the early days, we invested everything back into the business and that enabled us to keep fuelling this addiction that we have which was enjoying seeing the business grow and initially growing within Bristol and then eventually sort of spreading out to the likes of Bath and Cardiff and obviously as we’ve got a bit more confidence and as the geographical sort of map has grown we are obviously taking it to new parts of the country but taking it to lots of areas of the country where we already have a presence and I still find that tingle and that excitement to be the same as it was when we opened our first site.

Elliot Moss
Has the environment changed, I mean we all read about the demise of the high street, we all look at and anyone who walks down a street can see that there are problems, fundamental issues with costs of rent, with business rates, with the impending whatever happens with Brexit, all these things we hear and yet you are opening a site every two weeks? So, are you immune from it or are you just working harder?

Alex Reilley
We work incredibly hard, I think we always have worked very, very hard but I think as a business gets bigger you have to probably work harder, which I think perhaps conflicts a bit with how people view bigger businesses, I think lots of businesses that have stumbled on hard times have done so as a consequence of the fact that they have seen challenges as being problems, they haven’t looked at them as being just that, that they are something of a challenge that they should be rising to, and consequently will look for a magic solution and that magic solution more often than not is something which is on a spreadsheet on a screen in head office and has no real bearing or just general consequence of what that decision may mean for the people that work for the business and for the people that use the business, and I think we have been very, very disciplined in always putting any decision forward with always having effectively our customers and our staff at the forefront of that decision and ascertaining whether the impact of that decision is going to impact on them negatively or positively, clearly if it’s positive it’s a good thing but I think lots of businesses have got bigger and have regressed, I think they get lazier. So, I think we’ve worked really hard and continue to work very, very hard, we don’t take anything for granted, we are very privileged to have our position on the high street, we like to see the sometimes the contribution we make to a high street in actually helping it to regenerate a little bit. Clearly, food and drink operators have got a role to play, it isn’t just about retail, and obviously retail has really struggled because of the prevalence of being able to order things on the internet and clearly, thankfully at the moment, you can’t eat and drink through the internet.

Elliot Moss
Not yet.

Alex Reilley
Not yet.

Elliot Moss
Second life never really did work, people still like to go out and have a chat…

Alex Reilley
Exactly.

Elliot Moss
…and enjoy it. And, for you personally, just before we go to your song choice, are you very much in or are you going to do a Dave at some point and go, ‘I’d like to get off the bus please’?

Alex Reilley
As things stand today I’m 100% in, I think, why wouldn’t you be? We’ve created something from scratch, it’s been a remarkable journey and like I say, it’s very addictive. I’m obviously hugely proud we’ve created all these jobs, it’s amazing to see the relationships that have developed as a consequence of that, clearly we’ve served tens of thousands of people a week and why would you want to not be part of that?

Elliot Moss
Good luck and I am sure you will continue to be part of it and…

Alex Reilley
Thank you.

Elliot Moss
…it looks like you will continue to be super successful and I can see why. Just before I let you go, what’s your song choice and why have you chosen it?

Alex Reilley
So, I’ve picked Lush Life which is Oscar Peterson and Ella Fitzgerald. It is simply just a beautiful song performed by two of the ultimate jazz greats, my dad is a jazz musician and I was raised on jazz and Oscar Peterson was always in the background when I was young and I think this just, for all of their talent, it’s just a very stripped back, very simple, very beautiful piece of music.

Elliot Moss
That was Lush Life with Ella Fitzgerald and Oscar Peterson, two proper Jazz Shapers, the song choice of my Business Shaper today, Alex Reilley. He talked about loving the theatre of the world of food and drink. He talked about wanting to have somewhere to go ourselves and he didn’t and that’s why they created their business, and this wonderful notion of bringing everyone together, the three thousand people together, for a huge staff festival as a thank you and a way of connecting everybody. Really, really great stuff. That’s it from Jazz Shapers and me, Elliot Moss have a fantastic weekend.

We hope you enjoyed that edition of Jazz Shapers. You will find hundreds of more guests available to listen to in our archive. To find out more just search Jazz Shapers in iTunes or head over to mishcon.com/jazzshapers.

Alex Reilley

Alex Reilley is co-founder and Chairman of Loungers, the nationwide café, restaurant and bar group. Having spent years in the restaurant and bar trade, Alex and two friends, Jake Bishop and David Reid decided it was time they did their own thing in 2002. Nearly 16 years later, Loungers currently operates 114 all-day cafe/bars collectively known as the Lounges, and 21 quirky and opulent bar/restaurant’s called Cosy Clubs. Loungers is opening around 25 new sites a year and aims to having 200 sites in the UK by the end of 2021.

Alex is also non-exec chairman of Cornish burger and beach barbecue brand Hubbox, and a patron of the Princes Trust.

“We opened somewhere for very selfish reasons, we wanted somewhere to go ourselves.”

“It was successful in that it was like nothing else that people had encountered.”

“One of the reasons why we have continued to grow successfully is that we always want to ensure that what made the business special from day one is still very much alive.”

“We are only as good as our people.”

“The idea that we had in 2002 I think is very much not only alive, but better than it’s ever been, and that’s only down to the quality of people that we have.”

“I think one of the nicest things about our story is the fact that we are an example of friends that have gone into business and made it work.”

“If you’ve got the right kind of personality, personalities that complement each other, you can make it work in business as well as friendship.” 

“I think there’s a lot of misconception about private equity, people are very almost fearful of them and they would see them as being overlords.”

“We have always viewed private equity investment as being a partnership.”

“Fundamentally if we focus on making the business better and improving the business then we’ll all do well out of it and we’ll be successful.”

“Growth is addictive.” 

“We invested everything back into the business and that enabled us to keep fuelling this addiction that we have which was seeing the business grow.”

“I still find that tingle and that excitement to be the same as it was when we opened our first site.” 

“I think we have been very, very disciplined in always putting any decision forward with having our customers and our staff at the forefront of that decision.”

“We work very, very hard, and we don’t take anything for granted.”