Raising the Bar: Peter Marks from REKOM UK discusses the late night sector and more

In the first episode of Raising the Bar, we talk to the chief executive of REKOM UK, Peter Marks, about the late night sector, his experiences over the pandemic, launching REKOM in the UK and what it was like featuring in the TV series The Undercover Boss. (This episode was recorded before the governments announcement on the 8th December 2021).

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Find the transcript below:

Jonathan

Hello and welcome to raising the bar. This is the first in a series of podcasts from Poppleston Allen. Across the series we will host a wide array of guests from across the betting and gaming and hospitality industries. We will find out more about them, their career and business journey, together with the secrets of their success, and we’ll do a little bit of crystal ball gazing along the way.

Welcome to the Raising the Bar podcast today. In the first of our podcasts, I’ll be talking to a legend of the night time industry, Peter Marks, a man with a glittering career which allows me to call him one of the kings of the late night industry in the United Kingdom.

Peter is now the chief executive of Rekom in the UK, which was born out of the acquisition of over 40 nightclubs from the Deltic Group by Rekom in December 2020. But enough from me for now about Peter because I’m sure he will tell you all about him himself.

So, let’s hear from the man himself about the late night sector, his experiences over the pandemic and in launching Rekom in the UK. And if we have some time, we’ll also touch upon Peter featuring in the TV series The Undercover Boss.

Hi, Peter.

Peter

Hello, Jonathan.

Jonathan

Welcome to the first ever raising the Bar podcast, and I guess the pressure is on us both to ensure it’s not the first and last one we do. So, let’s dive in. It’s hardly been business as usual has it over the last 18 months, Peter.

Peter

Well, you could say it’s about 21 months now Jonathan since we were all closed by the government for around about three weeks. Do you remember it was three weeks to start with and then we got an extension to 6 weeks?

My goodness me how things rolled out and changed beyond any of our wildest dreams. Or should I say nightmares? So, no it has been the most challenging 18 months, or should I say 21 months, in my 40-year career.

Jonathan

Let’s talk about the late night sector. How did you actually get into the late night sector in the first place? Which I mean, I’ve be doing licencing for 25 years and I think I’ve known you for 25 years. So how did you first get into the late night sector?

Peter

Well, I think like a lot of people in hospitality, by accident. I actually tried to get a job in the recession of 1981. I left university and I was out there looking at the usual suspects and things like Marks and Spencer.

And frankly, we were running out of time in what was then a bad recession. And so I got a job as a trainee manager in a nightclub in Wakefield, in a club called Casanovas, which sounds extremely old fashioned and corny.

But it was such a lucky break. Now, I only went there because it had the term manager in the title. Of course, like any trainee manager back then, it meant you do everything for half the wages of most of the people who are hourly paid.

But where I got lucky was that that club in Wakefield ended up being one of the most glittering and successful clubs in the country and indeed it expanded, doubled in size, with a business called Rooftop Gardens at the back of it.

And back in 1984, when I was 24, I was running this business that was taking £75,000 a week and was just a phenomenal success. So, I guess luck and accident is how I got into the late night sector.

Jonathan

Is it still open that nightclub Peter?

Peter

Well, the back half is something else, and the front half is owned by a dear old friend of ours, Bill Muirhead. And yes, it’s still a nightclub.

Jonathan

I bet Bill will thank us for that mention on the podcast. Yes, I remember the club well. So, what does a normal day look like for you at the helm of Rekom Peter?

Peter

There is no such thing as a normal day, and I must actually say that if I’ve got one lucky thing I can say about my career, I’ve honestly never had a boring day ever. And now is even more the case. I have meetings on a Monday, a typical Monday with all my direct reports. But the reality is that you then spend so much of your time fighting, dealing with inbound issues, dealing with the PR and the communications of the company and looking at the strategy.

And of course, nowadays I spend a lot of time in team meetings with our investors and colleagues in Denmark and also understanding more about their business. So, it’s fast, it’s furious, it’s fun. No two days are the same, and I feel very lucky.

Jonathan

And I guess you’ve had to spend some time over in Scandinavia I assume?

Peter

Yes, although anybody that’s travelled will recognise that it’s not that easy to do, but I’ve actually only been over there once so far. I went over there for three or four days and then I went on another trip to look at a potential acquisition in another country.

But they’re very, very good. They’re very professional. They’ve done a great job building Rekom from really nowhere in 2008 and the whole of Rekom, now in four countries throughout northern Europe, is 200 businesses and fast growing.

Jonathan

And since you started at Casanova and Rooftop Gardens. Tell us a bit about what has changed in the industry since you started in Wakefield all those years ago?

Peter

Oh, well, this is right on your toes as a licencing lawyer because of course the biggest thing of all is the Licencing Act 2003 that came into being actually more like 2005, but was a mission creep from around about 1998. And going back to 1981 when I started, basically the only things that opened post 11pm had a special hours certificate, an entertainment licence with all the conditions that comes with it and the fire exits and the security and the air changes and the building regs that were far in excess of any other In the late night hospitality. But you had a monopoly, and that meant that you could make very good money quite easily and people would pour out the pubs at probably about 10:30pm to join the enormous queues so they could definitely get in. And you’d have a mix of people from 18 to 50. There were many customers back then that were 50, 60 years old. They were often the fathers or the uncles of the people that were in there and they would sort of keep an eye on the young people that were having a great time and go up and say, Oh, I’ve seen what you were doing, you know, I’m going to tell your dad or something like that. So, they were phenomenally easy days when you look back on it.

But of course, when you’re in it, you don’t realise it. And gradually there was a change in around about 1997 where you didn’t need to prove need which meant it was far easier for people to get licences. And then, of course, between 1998 and 2005 and then from 2005 onwards, you saw a gradual relaxation when everybody came into the market. And what that did was it basically took certainly all the over thirty’s out of the market because they’d be happy to stay in bars and have something that was a little lower energy and more cocktails and conversation than, you know, this sort of lively atmosphere and noise and dancing and lights and everything that we did. And so, in many respects, that is a regret because I think that it meant that nightclubs became more price sensitive. There were more younger people in them. And of course, we also have to accept that when people start going out and clubbing and learning their boundaries and their limits, that that comes with some of the problems that we have to sweep up as the late night industry and without that balance of over 25 it’s a little bit harder.

Jonathan

And of course, these pubs didn’t have to put their small dance floors in play anymore.

Do you remember the little studge you’d find on the floor in some of these bars Peter to get a special hours certificate, we’re harking back to the old days now aren’t we, with a DJ on, and a wee bit of pizza that they do, but they don’t have to do that anymore, of course.

Peter

Oh, some of the kitchens that were put in, let me tell you, if you ever went behind the scenes in some of these establishments, of course we had to in the nightclubs have proper kitchens and proper restaurant areas, so all of that faded and rightly so really let’s be honest, because this was almost, you know, a throwback to the theatre clubs that then became nightclubs or these ballrooms that became nightclubs, so the theatre clubs and the ballrooms had kitchen facilities.

And of course, I don’t know whether you realise this, and certainly if you wanted a town centre site back in sort of the eighties, the perfect site was often the old cinema because the cinema had moved to an out of town nice new area with its own car park and shared space.

And there was a D2 planning requirement for a nightclub that happened to be the same as theatres and cinema.

Jonathan

Places of assembly I believe they were called Peter, places of assembly.

Peter

There you go. Of course, that did leave us also with having to sort the asbestos out.

Jonathan

That’s right. Yes, I remember it well. So, we can’t have a podcast I’m afraid Peter, I’m sorry to mention the word, without mentioning the horrible C word COVID, and it’s clearly impacted the entire hospitality industry. But can you tell us a little bit about your experience with COVID at Rekom?

Peter

Yes, well, to keep it fairly brief, we accepted the fact that we weren’t going to get back first. And we also knew some of that was messaging to be honest. So when everybody closed in March you shrugged your shoulders, you planned, you did a cash flow through for six months, which we thought was an extraordinarily secure place to make sure that we were OK with and make sure we weren’t going to run out of cash for that length of time, and in the summer of 2020, people started opening and we were hoping to get the go ahead in August. That didn’t come. In September. Oh, hang on. It’s still not coming. The schools are back. We were then in August and September, as the late night economy not just Rekom, we were speaking with government to the ministers in Bas. Paul Scully in particular. They were very supportive of us and I felt that we were going to get a support package if we weren’t able to open until November. Of course, when the schools went back, the rates went through the roof, everybody ended up having restrictions and closing and because everybody in effect came off the pitch and came to sit on the subs bench with us, there was not a chance. And the real issue I have, and we’ve been doing some work on this, is that if you are running a large nightclub company with large nightclubs, high rates, high leases, costs and you were a multiple operator, then you were actually at the very bottom of the pile of help. And if you count help as a percentage of turnover, your normal annual turnover, we were way behind anything else which put us under immense strain.

And now if I can spend a couple of minutes on Rekom In particular, we had three high net worth investors with us. They were wonderful people. And one of them, unfortunately, was very ill in hospital. So when it was clear that the bank were losing their faith in our discussions with government, they wanted our shareholders to put more money in, and don’t forget that was money behind the bank. Our bank debt wasn’t high actually, but also behind the potential tidal wave of rent debt. And it was clear that we were in trouble and not helped by the fact that our largest investor, a smashing guy called Paul Evans, was in hospital very ill. Paul subsequently died this March and actually never came out of hospital, but that meant that the other two shareholders were a little bit unsure as to what to do. We had to run a process through BDO to look at a pre-pack to, in effect, rid ourselves of the debt.

And of course, that meant that the previous investors could also make a bid for us. That was only right and proper. But it was a proper process, and we ended up with four good bids for the company. But eventually, the people that won through were Rekom.

Rekom have proved to be a fabulous fit for us, both culturally, because they really are good guys and I’d like to think that anybody who knows me would say that I am a people person and that I’ve always put people at the heart of any decisions that we make, that doesn’t mean to say we don’t make hard decisions, but you’re in hospitality and hospitality is about people. These guys are exactly the same and furthermore, going around with Rekom’s, main investors, they’re actually operators like I am. And we had the most amazing discussions because we were talking about, you know, flows within the clubs and changing the shape of booths and looking at stripping other things out and stripping back carpet that we’ve still got some of unbelievably and all of those things. And you realise how refreshing that was because most of my life, when I’ve gone and raised money from private equity or from the market, what they usually do is try and sus you out over about 30 minutes. They’ve worked out then that you know what you’re talking about as an operator. And then they spend the next two hours speaking to the finance people about balance sheets and depreciation policies and amortisation and write offs and leases and all of those sort of things because they totally get it, whereas I’m talking here to an audience of operators who are far more interested in the soft stuff that makes the business work. So it was incredible. And here we are now. We are in month eleven of our tenure and everything that they promised has come to the fore.

Jonathan

And the hospitality industry in general Peter, what state is, and in particular the late night industry within it, what state is it in at the moment. And again, I’m sorry to ask you about this, but COVID passports? You have experience of these now in Scotland and Wales. Without putting words in your mouth, I don’t imagine it’s a particularly positive experience, is it? How are they going and how is the night-time industry or the health at the moment?

Peter

So a lot of people haven’t made it through this period. A lot of clubs and late night bars have closed. They may reopen again. But for those that have been in good shape, it’s been phenomenally good. Since July the 19th our trade has been incredible. It’s been like a big reset, the likes of which I’ve never seen in 40 years. It’s two things that have done that. first of all, volume, but that’s only a bit. Volumes are up about 10%. The biggest thing of all is spent per head, and now a lot of people won’t measure spend per head because they don’t measure admissions. So, people listening to this in hospitality and the majority will not ever count people in because they won’t need to and it’s not part of their KPI’s. But we do. So we know what our spend per head was and it’s gone from about £15 to about £19, which is incredible.

And why that is, we can only guess because it isn’t the science, it’s art. But it would look like people are just coming in early, having had a poor experience in pubs, not what pubs are about pre July the 19th. You remember those days when people sat in tables of six and had to be served and put a mask on to go, Well, you know, when you are 18 or 19, you’ve never been legally out to a licenced premises before. You’re thinking, Is this a pub? Look at these clubs? This is much better. And so they came earlier on. And what had happened is that we weren’t getting people in until 11:30pm, midnight prior to COVID and they’re now coming in in good numbers between sort of 10pm and 11pm on a Friday and Saturday.

So it’s been transformational. And I think it’s fair to say that in the short term, our profits have doubled and it’s incredible, doubled. But we don’t expect it to last forever. It’s been a unique year when we basically got the equivalent of two years worth of 18 year olds coming to the market, two years of freshers.

So that’s been good. Now let’s talk about passports. I cannot tell you how annoyed I am with the government’s pathetic stance on passports which is no more than virtue signalling. In fact, I’d go as far as to say it’s a publicity stunt because it’s irrelevant. First of all, since July the 19th up to date, there’s been no increase in the 20 to 29 cohorts in infections or any other thing. So you know, this is it’s about messaging. They’re all sort of rubbing their hands and saying, look, other countries ask this of their nightclubs, we’re going to be doing the same.

But what difference is it going to make? Fact is, they’re trying to get 5 million people who haven’t had a vaccine to have a vaccine and somehow bizarrely using nightclubs as part of that messaging. Now, if you’re 18, 19, 20, 21 years old, we were all there once, then actually, you’re probably saying I’m not having this government telling me what to do and I’m not going to have a vaccine. And so I’m not going to go to the nightclub. I’m going to the pub, I’m going to go to a restaurant. I don’t need to go to a nightclub. So, what has actually happened is, of course, it is not in England yet. And I have to say, I don’t believe that Plan B is wanting to be placed upon us by the English politicians. And I use those words carefully because I think they want to sort of cock a snoop at their Welsh and Scottish counterparts to say, there you go, you just didn’t need to do it.

But you’re right to say, I’ve got clubs in Scotland, I’ve got clubs in Wales, so if I might, in Wales, it was interesting the first weekend. I think it’s fair to say that most people in the queue didn’t know what an NHS app was, even though loads of them had actually had the vaccination.

So they were still in the queue and we had to cut the queue in half. We get to the back of the queue and say download the NHS app now and try and upload your passports. And so actually it sort of went alright.

In Scotland however, it’s really hit businesses much harder. And whilst we’ve only got a couple, so I have to rely on my other friendly Scottish operators, a lot of them have been absolutely devastated, down 20, 30, 40%. And further to that, there’s this bizarre thing and there’s a business I know called Tiger Lily in Edinburgh, run by Friends of Mine at Montpellier. They’re really good guys, very smart operators. They’ve got a hotel and, you know, they’ve got a mixture of businesses, but they’ve just basically put furniture on the dance floor, so they no longer have to put up with this Nicola Sturgeon inspired charade, this public messaging, this publicity stunt. So, I’m sorry to sort of be animated on it, and I think you’ve known me long enough to know that I’m never one who sits on the fence, but it’s a joke.

Jonathan

Mm hmm. The lobbying the late night industry’s done of government to get assistant support. How do you think that went, has the lobbying had some effect, as you said earlier, that you feel as if that very much the late night industry has been at the back of the queue in terms of assistance and support? How has the lobbying helped, has it helped Peter?

Peter

I think it’s made us feel that we’ve been listened to, and I genuinely think having got close to government and ministers and their departments, they do mean well and I didn’t think that was the case a year ago. So I applaud them on that. But as one guy said to me once, and this was a private equity individual who rescued Monarch Airlines and rescued British steel, both of which have been in long talks with the government beforehand, he said to me, Peter, the government will always open the door to you. They will listen to you. But they won’t give you anything. They won’t do anything. They will just time you out. And he said that to me before it was apparent that that was the case. And I have to say that for all of the talks that we had, not just with the base department, but with the Treasury, where we gave the Treasury a very simple and fair way of supporting those in hospitality in a proper manner. We still got nothing.

I think though, it’s certainly not a broken relationship, and I tell you what, I wouldn’t want to be a politician, but I do think that we’ve at least got the channels now to carry on having a debate to rebuild the sector and to re build our balance sheets and to pay down our debts. So, you know, I say on balance they made us feel better, but we didn’t really particularly get anything.

Jonathan

So on a lighter note, Peter, tell me what was it like to appear on the undercover boss? That wig, that wig.

Peter

That wig, yeah I know. So first of all, I was in two minds to do it, but I’d come to a company in the former Luminar that had been struggling for two or three years. They had too much debt and it slowly was being choked to death by that debt and by the banks that then took over effectively. And I wanted to say to the employees, Look, I’m different. This is a different company.

And that was what made me decide, you know what? I’m going to do this because that’s the message. Am really going to learn loads going around my clubs. Honestly, probably not. So that’s why I did it.

But then I did actually learn a couple of things. And the first thing is, it’s very easy for me to sit here and say that Wednesday’s rubbish lets shut it it’s no good. But actually, then you go back and you do the back to the shop floor thing and you realise that the guy who’s mopping behind the bars and doing the cellar work, he’s relying on an hourly pay job and you suddenly take eight hours and he can’t afford to stay with your company or he has to go and get another job, so you forget the basics.

And the other thing that you also forget is, just how much of an intense job it is for the management and for the door supervisors to sort of thin out, you know, the troublemakers and let the good people in and rely on the fact that 99% are great, but 1% are damn hard work, you do forget that. But, you know, it was great fun. I’ll tell you something else. I’ve never told anyone else, though, this is an exclusive for you. They actually basically put together the story before you go on. They do like a cartoon mood board. And then it’s the job of the producer and the director to basically steer you into that mood board, into that story. You’re going to go to this cleaner, you’re going to find this and you’re going to help this, etc etc.. And if you say the wrong thing, when they’re saying what was that like, they always say, just tell me again but this time will you say that Linda was doing a good job or something like that, so you realise that actually, you’re a bit more of a puppet than you’d like, but you know, they were a fantastic team the video and sound crew. And I think that they realised that as an ex operator because I started as an operator and had done all the rubbish jobs. I was game for anything and I wasn’t, you know, out of my depth on anything, and I think they were actually quite surprised by that.

I think they thought this chief executive, you know, he’s probably a lawyer or an accountant, and he’s just come in at the top and he hasn’t a clue on what it’s like to do all those horrible jobs. And the fact is, you know what? I’m pretty comfortable doing them.

Jonathan

You didn’t get the chance to be a Redcoat, which won undercover boss, of course?

Peter

Ohh, Mr Tony Marshall, no Thank goodness you wouldn’t want to see me sing or dance

Jonathan

so away from the coalface when you’re running Rekom, what do you do in your spare time to relax Peter?

Peter

I have two hobbies, cycling and wine and not at the same time. So I love to do vineyard tours and understand more about that. And of course, in the job that I’ve got, that’s quite easy. I can usually pull a few strings, and if I’m going to France to see a friend, then I’ll be able to find a vineyard nearby and tap up somebody saying, right do you know this guy? And then I get a good look around and so, I love wine.

And the more I know about wine, the more I know I don’t know. And then cycling I find it the best therapy going. It’s not only keeping me fit, but it actually takes my mind off of work and off everything.

And when we were in the depths of the difficulties last November, when we were effectively slowly going bust and trying to raise money to come out the other side, I actually cycled every day at lunch time. I used to do the meetings in the morning, get on the bike do 15, 16 miles, get off the bike and carry on. So yeah, that’s it.

Jonathan

And if you get time to read a book, what’s the last book you read Peter and what’s the best book that you’ve read?

Peter

Well, the latest book I’m reading actually is I can’t remember the name of it, but it’s the latest by David Attenborough.

And I think, you know, it’s obviously something to do with saving the planet, and it’s actually a fascinating read. And you know, it’s an interesting time that we find ourselves in. And despite the industry I’m in, you know, I want to make sure that we leave our planet to, you know, to my granddaughter and great grandson or whatever it is, in as good a nick as possible. So that’s an interesting thing for me to read. But my favourite book is a book by my favourite author and my favourite author is Bill Bryson, and he’s got a real, mixed bag of books out there.

But he does a brief note a short history of everything, which is a little bit of a spin on a brief history of time. But it’s a short history of everything, and it’s the most wonderfully written book about 500 pages long, and it basically talks about the history of the universe and, you know, biology and civilisations. And I remember physics and chemistry, but in a way that the common man could actually understand. It is wonderful. So you know that my favourite little story from that is that I was asked to a dinner party once, and the host said, I’m going to sit you next to this very quiet man because I know you’re a chatty sort of guy. And he’s a quantum physicist from Oxford University. But my wife knows his wife very well, and that’s why they’re sort of here at the party. So I sat next to this guy, Ray his name was.

And I said, What do you do? And he says, I’m a physicist. I say, Well, what branch? And he says quantum? Well, I swear to you, just by luck that afternoon, I’d read the chapter on quantum physics, and I was able to hold my own on a quantum physics, discussion amazingly and string theory to boot.

And he was so pleased. But, the next day, I’d forgotten it all.

Jonathan

Thank you, Peter. Well times against us, so just one final question for you. If you were to give some advice to somebody who was just going into the hospitality industry, what one bit of advice would you give to them?

Peter

Make sure you’re going into the strand of hospitality that interests you most because this is something that you have to live and breathe and secondly, never forget it’s about the people. Whatever it is, it’s always about the people.

Jonathan

So that’s two things, but two very important things, one wasn’t enough.
Thanks, Peter. It’s been lovely to have you on our first podcast and I think, and I hope that we’ve just about done enough to make sure we will record a volume two of this Peter. So thanks very much.

I hope everyone enjoyed our first podcast and I will look forward to welcoming you back soon. Thank you and thank you very much, Peter Marks.

Peter

Delighted. Thanks.