Pub Companies - Business and Enterprise Committee Contents

Memorandum submitted by Dovedale Towers

  I attach a small piece below. We thought a moment about this, knowing they would try and make life even harder for us as a result of us submitting the piece, but then realised they couldn't make it any worse. I will outline the main headlines. We do know that during this process it would appear that we have made mistakes. When we spent money on the place for example we should have sat down more forcefully with them to negotiate, but we did try. Any attempts to do that took ages with Enterprise and we didn't have ages.


  We bought the business in July 2007. We acknowledge that we were not hot on the schedule of dilapidations and other legal matters at the time. We actually spent £9,000 prior to acquiring the place, madness I know, to have the first floor refitted as conference and training rooms. Enterprise have a £10,000 deposit of ours.

  Unbeknown to us the previous trading figures were heavily dependent on trading after hours. The main drag near-by, Allerton Road, shuts at 12 and Dovedale was the late drinking den that everyone headed to. Locals were up in arms about the noise just after 12am as people arrived and then again between two and three as they departed generally much the worse for wear. The previous owners had told them very bluntly what they could do with their complaints.

  On 24 August 2007 two people were shot on the doorstep, both surviving, and trade fell off dramatically. We spent nearly £20,000 on setting up a new restaurant/bar concept called Lief, which in hindsight was clearly too "fancy" for the local community and within a few months we were down-grading it to a pub, this time spending a couple of thousand. Locals said they were very happy with that but trade was still about half breakeven.

  We have recently had another company try and assign the lease off us. We were told that we would have to pay for dilapidations work to be done (on items that were in exactly the same state of repair when we took over). This immediately looked like them trying to get money off us so that we would never get our deposit back. I wrote saying that and was told that was not the case. Enterprise would not listen to our request for them to take a view on dilaps because of the money (circa £30,000 not including own labour) we had spent transforming the building.

  At the same time we then received threatening letters asking us for £8,000 for trading out. I simply saw this as more efforts to hold on to our deposit so I stopped the dd suspecting that they would simply start taking our money. Within a matter of days there was a bailiff here and talking openly about why in front of staff and customers while counting our chairs. We do suspect that the previous manager may have done some trading out, in error rather than for personal gain.

  With the dilapidations and the legal fees we spent over £7,500 on the aborted sale, again excluding own labour.

  We have had no assistance with the business at all from Enterprise. We think a double shooting on the doorstep is what we would deem extraordinary circumstances and yet they are totally uninterested. They told us a month ago that we would be able to buy out for £10,000 to £20,000 and they have since added that is only if we have a new assignee lined up. If we had a new assignee why would we pay any money?

  They also told us that rent was based on rateable value and on trade. We sent them the trade figures showing the horrendous downturn and details of a rateable value reduction we have been able to arrange. They now tell us that this does not merit a reduction in rent. The rent is £47,000 per annum including all the add ons.

  In the past three weeks we have worked flat out to try and get a plan together for next year that will make enough to break even and have sent that plan with a request for assistance to Enterprise. We think the pace can be turned around but need assistance as the new initiatives build up. When this is shortly refused, I will then be inviting them to come along and collect the keys and sue myself and my fellow Directors for our guarantees. That is the last straw obviously but without help it is a cheaper option.

  I am unable to borrow any more money personally and Enterprise collect their rent without break. We make about 49% GP on the site and could buy everything cheaper in the local supermarket. We currently take about £4,800 a week and our fixed overheads are £3,200.

  This grand old building has some great history. The Quarrymen played here in 1957 after John Lennon had joined them. It could be a good business but without a partner it can't work.

8 December 2008

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