Brook Group

brook

controlling interest

BY the brook

features, May 2008, COMMENTS

Peter Marks [above left] and Gary Hunt from Barnsley-based, Brook Leisure discuss their backgrounds and what makes the company successful.

Turbulent times need steady minds, and in Gary Hunt and Peter Marks, Brook Leisure has two. Working tightly with Martin and Jason Brook the company has formulated a strategy that the pair believe can accelerate its development over the coming months, taking advantage of the current market conditions. With licensing reform, the smoking ban, and the impending, if not fully blown economic crisis all acting upon the late night industry, operators have rarely had it so tight.

Chief Executive, Peter Marks reflects: “It’s a cyclical business. I’ve been around for 28 of these last years; I’ve seen it get bad before, like ‘91/’92. But people don’t stop going out, you just need to cut your cloth accordingly and you need to invest accordingly.”

Chief Operating Officer, Gary Hunt explains: “The strategy is to develop the business through acquisition. Over the years we’ve done a lot development, but because of licensing reform and various other factors, development’s become very difficult, and very slow – it’s taken us around two years to open some of the venues because of objections from other operators and local authorities.”
Hunt and Marks are two disparate characters, with very different, yet intertwined pasts. Their current roles befit both their characters and their own expertise of the industry, which they have amassed from their own unique experiences.

“I take day-to-day responsibility of the existing estate, including the development of the new businesses. Peter is focused on the acquisitions strategy and dealing with the corporate strategy of the group,” says Hunt.

After Martin Brook shrewdly sold his Cash and Carry business in 1990, amidst signs of a rise in supermarket power, he turned his attentions to the leisure industry following a suggestion from Jason Brook.

Hunt continues: “I finished my career in the finance industry, joined Martin and Jason and we opened a business in Barnsley called Hedonism in 1993. We traded Hedonism for three, fairly successful years and then we sold that business to Peter (who was at Northern Leisure). We did have a couple of bars that we’d opened during that time, and we retained those and then we invested in various other nightclub businesses in the Yorkshire area.”

In 1997, Jason Brook, who had been following a career in Leeds as a chartered surveyor alongside his involvement with Brook Leisure, joined the group full time. This coincided with a period of accelerated expansion for Brook, as they acquired three large businesses from Rank Leisure. His background, coupled with his knowledge of the business, ensured that the company focused on buying and building sites, whilst multiples were high buying existing businesses. He has overall responsibility for all the companies within Brook Group as Group Chief Executive.

There are now over 30 companies within the leisure and property sectors. The property division has over £100m worth of projects presently on site. Peter’s colourful 28 years in the night trade has bobbed and weaved through a variety of ventures, which has gifted him with a worldly view of the industry.

“I started off just running nightclubs in Wakefield, Rooftop Gardens and Casanovas, which interestingly is one of our businesses now – Quest – so I’ve gone full circle. I then went on to open a venue in Halifax called the Coliseum, in ’87, with two other guys – we were the first Business Expansion Scheme funded club at the time in the country. We sold that, went down to Birmingham to do a joint venture with Richard Branson, to open The Institute, he pulled out at the last minute. We ended up opening it, completely under funded and we had a very slow and painful death over a year, after which we just sold it, got out, and I went to work for another company, which was like out of the frying pan and into the fire,” says Marks.

He had joined Whitegate Leisure, which would later become Northern Leisure, at a period of uncertainty for the group. Through the sale of the non-core assets of the company and a programme of acquisition, the business was turned around and bolstered by the purchase of the remaining Rank Leisure sites and concluded with its sale to Luminar in 2000.

Marks continues: “We actually spent the 1995-2000 period, largely growing the company by that method (acquisition rather than development), that was actually what I ended up doing: I was heading up the acquisitions team.”

A year with Luminar was followed by a spell with Georgica before returning to Luminar. “I looked at various opportunities of buying companies within the sector, backed by the private equity market, each deal floundered, as they can do. I was then parachuted into Sports Café, which was pretty broken when I got there. The issue was a balance sheet one, high debt and low profit. By no means the only company in the sector facing such issues from times of cheap dept and fast roll out plans. We tried to refinance it but couldn’t due to market conditions. Administrators were called in, and I joined Brook.”

Brook’s success in the face of adverse conditions can be linked with their calculated siding with acquisition over development, and their conservative approach to these acquisitions – risky borderline locations merit no consideration. There is, however, more to the group’s success, as Hunt explains: “I just think we run all our businesses as independent businesses, and we try to instil an entrepreneurial spirit into the management team for them to take ownership of their particular business. Effectively, we are a small, private company – we care, or certainly believe we care about it more than a large organisation.”

Marks adds: “What we have here is the second most profitable nightclub, or late night leisure company, behind Luminar, which to me is a wonderful opportunity to build upon.”

Steady steps have placed Brook in a position to expand beyond the Yorkshire conurbations in which they have built, with recent rumours of a bid for Regent Inns hinting at substantial expansion throughout this year.

Marks says: “We just don’t know where we’ll be in six months, we’re looking at a lot of different things but we might be exactly the same as we are today. We’ll do things that are sensible and right for us, in our own time and within our parameters.”

Hunt concurs: “I agree. We’ve spent 15 years building this business to a very solid, profitable company, and the last thing we want to do is make the wrong choices now. All the potential acquisitions that we’re looking at – we’ve got to be 100% confident that it’s going to work for us, in the same way that the existing sites do.”

Words: Michael Nicholson

From: May 2008

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