Optimistic: City Pub Company boss Clive Watson has seen strong trading
Clive Watson’s CV is a little unexpected for a pubs boss. His educational achievements suggest he might be a political pundit, a diplomat – or even a spy. His degrees in international relations, history and diplomacy hint at a serious academic type with a penchant for tweed suits.
Instead, the co-founder and executive chairman of City Pub Company is warm and enthusiastic, dressed in a smart casual blazer and shirt, when he bounds into his plush Chelsea pub The Phene.
This is no ordinary watering hole, but decorated down to the last detail to be photo-ready for Instagram. Both his – and the company’s profile – have had a leg-up from The Phene’s appearance in several episodes of the reality TV show Made In Chelsea.
Watson’s two daughters Lucy and Tiffany starred in multiple series of the programme, which tracks the lives and loves of some of London richest people. The publican himself made a number of appearances on the show – though this brought out some snobbery in his peer group. ‘I don’t understand why some of my friends made adverse comments about it,’ he muses.
One of the main reasons he is in such a good mood is that business is booming, rather to his surprise.
Even the increasingly popular ‘Dry January’ and people working from home so missing Friday night drinks after the office have failed to dent unexpectedly strong trading since the start of the year.
‘We were all quite nervous it was going to fall off a cliff after Christmas,’ he says. ‘But Friday nights are definitely back. Even if people are working from home, I’m hearing of some who work remotely and then come into London in the evening to have a proper night out.
‘In London, definitely, there’s been the return of the office worker, the tourist and general city life.’
After months of battling the energy and cost-of-living crises, the current respite is giving him a chance to focus on his true passion. While most bosses barely have time for hobbies, Watson is spending his spare hours writing a history and current affairs book. He hopes to finish a first draft by the summer.
Several years ago – and more than three decades after completing his international relations degree at the University of Reading – he took a course in international diplomacy at the University of Buckingham for fun. He then won a place on his dream course, a masters degree in history at Cambridge.
‘I tried to get into Cambridge when I was 18 and in some ways it’s always been a bit of a bugbear for me,’ he says, admitting many of his friends’ eyes ‘glaze over’ when he lets loose on his obsession with the past.
His dissertation focused on the Conservative party’s attitude to Scottish devolution from 1966 to 1979 – but he narrowly missed out on the marks needed to pursue a PhD, which he’d been mulling.
‘I’m always up for a challenge, I would probably have done it – and I think it would have gone horribly wrong,’ he says. ‘It’s five years part-time and you’ve got to have so much focus and dedication.’ This was probably for the best as Watson’s attention was soon to be diverted when he finished his course at Cambridge in March 2017 and the City Pub Company floated on the stock market just eight months later.
The 61-year-old co-founded the group in 2011 with fellow entrepreneurs David Bruce and John Roberts after Greene King bought Watson’s last venture, Capital Pub Company, for £93 million.
As its name would suggest, Capital Pub Company concentrated on running pubs in London, but using the broader ‘City’ name has given him scope to buy or set up premises in places such as Exeter, Bath, Bristol, Oxford and, of course, Cambridge.
But City Pub Company’s five-and-a-half years as a listed group have not been plain sailing, due first to the pandemic and then the subsequent toxic cocktail of double-digit inflation, soaring energy bills, labour shortages and a cost-of-living crisis that is making ordinary Britons limit their spending. When it joined the London Stock Exchange’s junior market, AIM, it had around 34 pubs and was valued at £90 million. Now, post-Covid, it has 44 pubs but is worth slightly less at £87million.
In the final three months of last year, sales were propelled 8 per cent higher than in 2019 by the World Cup and Christmas party season, though the rail strikes shaved an estimated £750,000 off that quarter’s turnover.
A slide in wholesale gas prices means at least one of his biggest headaches may at last be starting to subside.
When pubs closed during lockdowns in 2021, the company’s energy bills were around £1.2 million. In 2022, this shot up to £3 million when wholesale energy prices as a result of the war in Ukraine, but it is expected to fall back to £2.4 million this year and, he hopes, could drop below £2 million in 2024.
The ‘arch-Remainer’ is generally in favour of Jeremy Hunt’s current tax policies, but would like to see the upcoming Budget tackle business rates, a problem that has plagued the high street for years.
Star roles: Clive Watson’s daughters Lucy and Tiffany
‘Business rates are a tax on physical retailers primarily, not online, and I think the shift should be towards taxing the revenues that companies make. For online firms, their premises are a lot smaller so the rateable value is a lot lower and they get away with blue murder. It becomes a property tax when it should be a sales tax.’
For all his optimism, the one lasting effect of the pandemic has been on Watson’s ambitious expansion plans for the business. Pre-Covid, these included an aim to have 120 pubs by the end of 2026. This target has now been scaled back to 80 over the same timeframe as Watson has been put off by the prospect of higher debt, difficulty hiring new workers and the multiple lockdowns.
‘If there was another Omicron for six months and we had to shut again…’ he trails away. ‘I think we’re much more cautious now of things like funding.
‘I’d love us to be in Canterbury or Chichester, but we would buy an existing pub rather than open a new one in a city where we had no representation.’
Watson entered the workforce in the 1980s around the height of the Big Bang yuppie excess, joining an investment bank as an accountant. But, unlike many of his peers, he did not revel in the culture and soon broke away on his own.
‘I was in the same desk every day and I just found it stifling and wanted to get out. I wanted to be around the decision-making table.’
He insists he would never want to be chief executive of a FTSE 100 company – preferring to have a more hands-on and personal role in his businesses, choosing a collegiate atmosphere over a corporate one.
And, after all, if his company was that big, how would he ever have the time to finish that book?
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