3D Focus

David Crabtree

controlling interest

3d Focus

features, July 2008, COMMENTS

3D Chief Executive David Crabtree speaks openly about the wins and losses of their first 18 months in business and reveals the secrets of running a tight ship, most recently the Stafford Chicagos.

As David Crabtree and I glance round at the new look Chicago Rock Cafe in Stafford, parked comfortably in one of the booths, the imposing artwork prints on the walls begin to tell many stories about where the brand, and the 3D Entertainment Group, is today. The large prints, some monochrome and some vibrantly colourful, ironically portray famous legends alongside contemporary celebrities, such as Elvis kissing Kylie, in a modern design.

The juxtaposition of old, favourite artists and new stars highlights Chicago’s heritage on the high street, the distance the brand has come, and its continued popularity. Like the idols in the pictures, Chicago Rock Cafes have always had an established presence in the lives of the pop culture loving masses, who have in the most part remained faithful since the brand’s inception in the ‘90s, even through times of hardship. Crabtree enthuses: “The reason Chicagos was successful ten years ago still holds strong; people want to come out and party, dine and dance under the same roof. We’ve moved things on in terms of the look and feel, and the music profile, but actually the fundamental reason people came here back then is the same reason people come now.”

It is no secret that when 3D Entertainment Group formed and took over Chicagos, Jumpin Jaks, five Orange House pubs and 35 unbranded nightclubs units from Luminar Leisure back in January 2007, the estate was not looking its best. Luminar was distracted by the preliminary pursuit of developing branded dancing destination venues, in the form of Oceana and Liquid & Envy.

Eighteen months on, under the capable helm of David Crabtree and his experienced senior management team – property director Nick Graham, finance director Andrew Finding and operations director Tony Trainor - the estate has been brought back to life. “We did 42 investments last year, which was at quite a pace. We’ve got about 35 Chicagos sorted and they’re edging up to a 40% return, which is great. Nick Graham has done a brilliant job at keeping the costs of those down.”

If ever the expression ‘running a tight ship’ rung true, it would be a timely description of where 3D is today. Crabtree says openly: “We do want to be known for investing carefully and being very tight with our money, so when we run them we operate them tightly. We’re not ashamed of it, we want to be known for it. That’s one of the strengths of the business.” Reporting that the smoking ban has definitely dealt a detrimental blow to the business, Crabtree also admits that the credit crunch has caused 3D to pull the reins slightly on its investment programme. “The only thing that has changed, and it’s marginal actually, is that we’ve slowed down the pace of investment,” he states, “we are now doing it more slowly and thinking how we can do it without closures.”

Crabtree is also keen for the company to stand on its own two feet financially, which is a philosophy adopted by 3D from the very beginning. Avoiding the VC route, 3D’s finances were split into a 49% share to Luminar, a 31% stake claimed by a management team led by former Luminar Entertainment Division MD Crabtree and the remaining 20% is held by property company Prestbury Holdings. Fast forward to today and Crabtree cites a change in the investment process as another reason for edging on the brakes. “We have slowed down a bit because we are now funding our investment out of our own cash. That’s quite a move, but you’re not building up debt all over the place,” says Crabtree.

When NIGHT interviewed David Crabtree over a year ago, “opportunities” and “[fixing the] existing estate” were priorities. Today Crabtree talks of a more stable business, rising profits and steady cash flow. But, like many developing businesses, not all goals and visions Crabtree expressed 16 months ago remain accurate today. Originally earmarking an average of £300k for the investment of each Chicagos site, that figure is now almost halved, for example at Stafford 3D spent just £160k on Chicagos and £140k on the Love2Love nightclub – quite an impressive figure considering the view around me. The Fareham Chicagos, which opened a week earlier, was upgraded for just £150k.

It is not surprisingly a “tight knit community” that works behind the scenes on 3D’s community bars and clubs. Openings manager Keith Greaves played a central role in coordinating the contractors and developing the brands. Explains Crabtree: “Nick Graham chooses the contractors – Duncan Scott is lead designer, he’s been with the business on and off for many years and he seems very capable of evolving the brand forward for us. Ian Dean from Dean Associates also works on design and he did this site, between them they’ve done a cracking job.” Keith adds that Speakmans also did a terrific job on the building and joinery work. The essence of the new Chicago Rock Cafe is still the same, but with more contemporary finishes and modern furniture. Said designer Ian Dean: “It’s far more chameleon than before and more daytime friendly, but on a Friday and Saturday night the entertainment offer still gets people in. It’s unique on the high street; it’s not a style bar but it can hold its own against a Revolution or a Prohibition.” Ian has exaggerated the daytime environment with wrap around booths, softer fabrics and fewer hard finishes than before – by using less timber. “Lighting on the bar front means it creates a soft amber glow in the day, but can be jazzed up with a blue in the evening.”

The glass-fronted building is light and airy, with warm brown and orange fabrics set against lime and moss green walls. Entertainment and visuals are still key, with three Samsung projectors over the bar (visuals by Kaleidovision), a huge screen above the stage at the back and an RCF sound system over the centre of the tables. Ian turns to the artwork, says the providers Indigo Art are the “best artwork specialist in the country”, and relates another story that the artwork tells: “The mixtures of old and new characters in the artwork are impossible realities, they attract intelligent people to look twice, but don’t alienate the younger crowd.”

Above Chicago Rock Cafe in Stafford is the sixth of 3D’s new Love2Love “community nightclubs”, following investments in Leicester, Inverness, Bromsgrove, Middlesbrough and Scunthorpe.

Mainstream and designed for cities or towns with a working class population – I cannot help but ask if this means they are now directly competing with Luminar’s Liquid & Envy branded nightclubs. Crabtree replies: “No I don’t think we are. We do trade in similar towns, but we’re in a different marketplace. They are big, bold, younger and more edgy in terms of music, but we are about community nightclubs; a safe environment where customers are more likely to know each other. We are about comfort, seating and creating an early doors bar area.”

The early doors bar concept Crabtree talks of is created by sectioning off the main dancefloor from the bar with a white curtain until peak time. Using the curtain as a projector for the lights creates simple yet effective visuals, again providing a soft-edged environment. Comfort and luxury is also provided by bespoke furniture from Abbey Furnishings, including crushed red velvet VIP booths, a white, button backed leather bar front and stools, and further white drapes around the edges of the venue.

When it’s time to dance, the curtain moves aside to reveal a focused dancefloor, where the DJ booth is more prominent than before, decorated in red crushed velvet pierced with sparkling lights, it stands out against the otherwise monochrome dancefloor. The technology install, by RJR Technical, is modest yet well implemented and economically viable for the venue’s aspirations, in the most part re-using the kit already at the venue. Crabtree continues: “A big club would spend more on sound and light than we’ve spent on the whole scheme, but we’re in a different market place and we don’t want to spend lots of money on it. Andrew Finding who is our FD has kept us on the straight and narrow – you need someone saying no sometimes.”

Crabtree has high hopes for the Love2Love brand, which sometimes extends to a Studio 5 second room in the form of a ‘70s and ‘80s disco, and it will be the next priority following the Chicago refurbs. “I hope in a year’s time we’ll have 20 Love2Loves and 10 Mortimers instead of the six and four we’ve currently got. And then we’ll pretty much have three brands driving the business forward.” Mortimers was 3D’s solution to turning “the loss making old boozer” – so typical of today’s marketplace - Orange House pubs into money-making, round-the-clock, “contemporary pub/bars”.

A re-branding process that infused the worn venues with some relaxed style, younger music and more lighting effects come nighttime, has attracted a younger crowd and released growth potential at sites in Wigan, Coventry, Salisbury and Burnley. Surprisingly, this new nucleus of well-operated pub/bars is a far safer side of the business for Crabtree than the notorious Jumpin Jaks estate, where overall performance is mixed and they haven’t yet found a solution as to how to take it forward. But Crabtree has some sound support as he explains: “Luminar have been very good to us all the way through and also in terms of supporting the business. We have Stephen Thomas and Nick Beighton (Finance Director) on our board and they have been brilliant.”

So how else has 3D’s outlook evolved since our last interview? Crabtree talks at length about the success of new operational structures, such as the GM equity share scheme, the Management Development Programme and the new regional sales managers, in improving motivation, sales, staff turnover and internal recruitment levels across the business. 3D’s marketing system is also in a more sophisticated place than it was a year ago, thanks to a UYR online print system for promotional material and a new partnership with Dataforce.

As planned, most of the 3D estate – around 70% - now has fully functioning smoking terraces, with the few remaining suffering practical set backs. There have been no new acquisitions, which Crabtree said was a possibility last year, but it is not surprising considering the rate of investments in the current business, and there are still around nine or 10 sites they’d like to sell on.

Far from being distracted, 3D has its sights set on new Love2Loves in Worksop, Portsmouth and Cumbernauld – the latter alongside a Mortimers. With the priority being clubs and bars, Crabtree hopes to have increased the refurbished estate from 45 to “65 or even 70” by this time next year. “The better run the business is the more opportunities we’ll have in a year or two years’ time, whether that means we expand or merge with another business or whether someone wants to buy the business, the reality is if it’s a well run profitable business, there will be opportunities,” states Crabtree confidently.

So is 3D sidetracking the doom and gloom that some operators are faced with? “Based on what various people in the business are reporting,” replies Crabtree, “sadly I think it is as harsh and tough as everyone is saying. The reality of it all is that what are you supposed to do - get down and depressed about it all or keep going, keep doing the right thing, keep your cost base tight, make efficiencies in terms of your overhead if you have to, run the business tightly and well - because what comes out the other side is you end up in a place that is fitter and stronger and when things do improve you’ll be in a great place.”

A down-to-earth demeanour and a steady sense of realism defines Crabtree’s manner - characteristics that no doubt filter through to operational outlook of 3D. If there is potential doom and gloom on the horizon, then 3D is not letting it rock their tightly run ship – their decisions and strategies implemented over the last year have ensured they are firmly anchored amongst the competition on the high street.

Words: Rachel Esson

From: July 2008

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