Controlling Interest

Joachim Ritter

Interviews, controlling interest, January 2007, COMMENTS

During a 30-years-plus love affair with Soho - partly consummated from an office vantage point overlooking Old Compton Street - it’s hard to remember London’s bohemian district undergoing such a profound period of demographic and social change than of late.

Many people won’t have memory of Old Compton Street before it became W1’s gay village, and Compton’s was then my old local, the Swiss Tavern. In those days it was more famous for two landmark epicurean shops - Carwardines coffee house and Del Monicos, an outrageously eclectic offy which drew wine-lovers from all over the capital.

Today Old Compton Street is where the headquarters of the two-year-old Soho Clubs & Bars can be found - similarly overlooking the street but this time from offices above their own Bar Soho. The company has done as much as anyone to change the face of Soho after dark; however, one senses they could soon be on the move.

The company has been in a hurry since Geoffrey Rose, the 67-year old owner of the company, set it up in 2004. It quickly had seven well-located bars under its belt, and while its closest competitors (Urbium plc) sometimes adopted a fancier route to market, Soho’s acquisitions were wonderfully eccentric (if a bit battle-scarred).

NIGHT had caught up with Soho Clubs & Bars at the end of 2004 when Jeremy Gordeno was steering the ship - but then the accelerated growth seemed to stutter and a new momentum needed to be created. Into the breach stepped fastidious 35-year-old Dane Joachim Ritter, all 6ft 4 in of him, with matinee idol looks and Sabatier sharp suit.

Charisma? Joachim has it in spades. Speeding tickets likewise. In fact it was probably this accelerated image that spelt out just the right message to Geoffrey Rose.

The bandwagon was soon up and running again, and nine months later Soho’s hegemony of West End ‘nightclubbing’ - kick-started by the old order of men like Lenny Bloom, Louis Brown, Oscar Owide etc - took a further twist when Paul Raymond’s famous Revue Bar (latterly operated by Mark Pierce and known as Too2Much) came into Soho Clubs & Bars’ focus. The company had already acquired a 30% stake in the shrine of erotica back in February but by July they had purchased the remaining 70% of the business, wasting no time in rebranding it (to the Soho Revue Bar).

Around the same time Kim Lucas was looking for finance to keep alive her notorious lesbian Candy Bar in Carlisle Street which she had been running for ten years. Soho Clubs & Bars moved in but retained Kim as consultant. “Now Kim gets a profit share, earning more money than she did before, and we picked up the venue at a good price,” reasons Joachim phlegmatically, in what today would be known as a ‘win-win’ situation.

This will be the model for future development. “It’s about supporting someone’s success. If you are prepared to give up some ownership of the business, you have a 10% smaller slice but of a much bigger cake.”

A similar relationship was struck with Ken Todd, owner of the Jewel bars in Covent Garden and Piccadilly. Soho Clubs & Bars have not only purchased the former to partner its large, glitzy brother in Glasshouse Street, which had previously been the prize item in its portfolio, but also the ‘Jewel’ trademark itself. Safeguarded by brand manager, Richard Jenman, this provides enormous potential for the roll-out which looks inevitable once SCB shift into gear outside the capital.

And so the company ends 2006 with its portfolio in double figures. What is refreshing about its approach is that it has been unafraid to plumb the edgier corners of classic Soho’s fabric - strip-joints, lesbian bars and the gay village (Shadow Lounge, Village) - and that is because they have the operational gravitas to pull it off.

The estate is as heterogenous as London itself and today subject to a massive European tourist footfall as Soho’s French influence of the mid-80s has evolved into a true cosmopolitan whirlpool. Joachim himself is Danish, with an Italian partner, friends spread throughout Europe. Yet there is already enough Soho in his veins (after living at various times in both Charlotte Street and Shaftesbury Avenue), and when the annals of this Bohemian square mile are eventually extended there may well be a space for Joachim Ritter - even though he had only intended to backpack through London when, as a teenager, he travelled overland by bus to the UK in 1990.

JOACHIM RITTER left Denmark with £150 in his pocket because the country was culturally non-entrepreneurial and because he wanted more excitement. “I was too busy to go to University although I went to the International Business School and got a degree. My plan was to go back to university but my patience had run dry.

“Why did I come to London? It’s what a lot of people from Denmark do - London is Denmark’s third largest city.”

He settled in the Old Kent Road when he first arrived. “My plan was to go back after two years and study psychology. This was to have been pretty much like a gap year because Denmark is very safe - you can always come back and get a job.”

But instead he bought a factory in Barbican, converted it to apartments, and soon had Jamie Oliver as one of his tenants.

It was later as CEO of a facilities group - while simultaneously working as a licensing consultant - that allowed him to probe Soho’s operational underbelly and set up close operator relationships. “It’s the nature of how I got to know Kim Lucas, Ken Todd and Mark Pierce,” he declares. Joachim was eventually introduced to Geoffrey Rose - but his role as deputy CEO was initially to have been on a caretaker basis only.

“I arrived at the company in October 2005 and did a business healthcheck,” he remembers. “The first thing I needed to do was make sure the senior management was of the right mix and we were where we wanted to be.” What he found was an excellent team in place. In fact, one of the reasons the company will be worth investing in if it eventually floats is the presence of managing director, Lee Wells - who has been filling operational roles with consummate ease since his days at the Café de Paris - and Ronnie Smith, the finance director who was formerly with Urbium plc. Between them they have a scope on profit and loss, performance and all points in between, and form a compelling triumvirate with Ritter, who was promoted to full CEO status in June 2006.

“The way it works is that I complete the acquisitions and then people like Lee take it from there; they approach a new business like pack animals,” says Ritter.

Geoffrey Rose is still very much part of the business and has recently taken steps to incentivise the senior management team by inviting them to take a 25% stake in the company at a low entry cost. This will value the company, which is expected to post a £3.3m operating profit for this year, at about £20 million (with an estimated economic profit for next year of £3.9m).

The CEO himself has been awarded a 15.5% stake (worth over £3m) while Lee Wells and Ronnie Smith pick up 6.5% and 3% of the company respectively. Ritter eventually wants this form of shared ownership to trickle down to GM level.

The team has performed in exemplary fashion to turn around the fortunes of both Candy Bar and Soho Revue Bar in double quick time. Takings at the latter have risen from £18,000 to as much as £45,000 in recent weeks since its star-studded reopening, because it has coincided with London’s love affair with camp cabaret.

The Revue Bar has quickly become the place to be seen. “We wanted to have a foothold in the area and you can’t get more Soho than Raymond’s Revue Bar,” assesses Joachim. “Mark Pierce had it and was doing a Moulin Rouge theme - but with the best will in the world it’s a struggle if you don’t have a full operational backbone behind you.”

Apart from the rebranding (and striving to get the famous kicking legs operational in the face of Westminster Council’s embargoes on moving signage) Soho Clubs & Bars have introduced Lady Luck & Agent Provocateur sessions, the popular Trannyshack night and New Bohemia - a two-room party. The real stars of this are its DJs, Kris Di Angelis - who mixes requests entirely off a laptop - and Fidel.

So the Revue Bar is certainly alive - if not yet kicking! “It’s very Soho cool,” appraises Joachim. “The interior is the same as it was but the cabaret thing has taken off.” A-listers have been flocking there from Day One.

But through the changing tapestry of Soho, older residents, concerned about growing noise pollution, are hoping that Westminster Council will continue to support them.

As a former Soho resident, Ritter gets angry when the subject is raised - his argument is that while residents want to live in Soho they don’t necessarily want to hear it - so the company invests heavily in acoustic treatment to its estate, and sound limiters to appease the noise abatement lobby.

He contends that on occasions when the noise abatement crews have investigated complaints [at their venues] they are generally alleged to have been during the afternoons - when their venues aren’t open, and no-one is on the premises. “CCTV footage has shown this time after time,” he says.

As the year turns, Soho Clubs & Bars will be looking to protect profits by infrastructural reinvestment, thanks to a progressive capex programme. The refurbishment at LVPO is complete and attention will now be turned elsewhere. Of their other venues, the evergreen Bar Soho remains the most ‘rounded’ place in the company’s portfolio, Cheers the most profitable (taking £100,000-plus per week) and Jewel the most exclusive.

“Cheers is clocking in big cash and it would be a crime to change anything there,” he says, using the renewable franchise deal with Paramount to attract tourists in large numbers. They will then turn their attention to branded roll-outs, of which you can expect Jewel to be one. Expansion will continue to be opportunity-driven, largely through acquisition. “If I thought this group was going to stand still I would have offered my resignation by now,” he says in typical cavalier fashion. “Each of our venues is unique. We are in the premium bar market - somewhere between über-cool and the fag and booze end - and that’s a great place to be.”

Since the target is for three or four new developments per year with a projection of 20 units in two years time, surely flotation is right on the radar for Soho Clubs & Bars?

“Geoffrey and I agreed on the business plan and we want to look beyond flotation which a lot of companies don’t do. Besides, there are are other ways of raising finance - it’s not a given by any means and can be a double-edged sword; it’s about what’s right for the business.”

Neither will it have escaped Joachim’s notice that following the MBO at Urbium, the new company Novus Leisure under Steve Richards, promptly delisted at the end of last year, backed by private equity.

However, the atmosphere between the rival West End bar operators on the whole remains good. “We have in common the obvious challenges - the City of Westminster for one. They have 3,000 licensed premises and I think they want to reduce it by 10-15%; this will mean that the bad operators will be hurt and the good operators will have to do a lot of compliance work. The premium on licenses is going up because they will not issue any more now.” To this end, Joachim Ritter is heavily involved with Pubwatch, the community based crime prevention scheme.

Outside of leisure hospitality Joachim fondly recalls his days of Superbike riding, having made several trips home to Denmark on the Blackbird and also owning a Yamaha R1. “But my licence couldn’t cope anymore,” he says, alluding to the earlier speeding reference, “so I sold the Blackbird and had the R1 race tuned.” Thereafter he raced for three years at club level and even broke the Brands Hatch indy lap record for a non-national level rider, before then racing at national level. But he couldn’t guarantee the full-time commitment required by racing at this level with the growing workload in his business

enterprises, and so the dream was over.

Besides, there is little place for performance bikes in the imbroglio of Soho - a place which he acknowledges, has grown up beyond belief. It’s no longer a porn city, with so many media companies moving in, he says ... as if the two were mutually exclusive. But Joachim Ritter clearly feels he’s on home territory and that in 2007 Soho is very much his manor. And as for that caretaker role? “I’m here to stay,” he smiles.

Words: Jerry Gilbert

Photograph: Jim Ellam

From: January 2007 Issue

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