Bring workers home, says publican Fitzgerald
ONE of the country’s leading publicans has called for a Government initiative to bring home Irish workers who emigrated during the recession.
“A lot of really good staff have emigrated – we were expecting them back, but they’re not coming back,” says Louis Fitzgerald whose group runs 20 pubs and two hotels, employing 950 people, mostly in the Dublin area. Fitzgerald, who owns Dublin heritage pubs Kehoes and The Stag’s Head, recently voted Pub of the Year, said “I would like to see a signal going out to entice them home,” he said.
LATE-MORNING in The Stag’s Head and a local is drinking a pint of Guinness, a few American tourists are beginning to trickle in to look at the menu and soak up the Victorian ambience.
Louis Fitzgerald, wearing a flat cap and a long navy Crombie coat, strolls in to survey this outpost of his far flung pub empire.
Just off Dame Street an old mosaic directs customers through an archway to an old Victorian pub which Fitzgerald bought 12 years ago and was recently awarded the accolade of Pub of the Year.
“I remember when we won the Black & White Pub of the Year award for the Poitin Still back in 1993,” he says. “We were trying for a few years, we put serious work into it and when we got it we benefited from a rise in turnover of about €250,000.”
The Stag’s Head has been a tavern for centuries and the current Victorian pub was built by George Tyson in the 1890s and still retains its air of Victorian splendour.
While Fitzgerald appreciates the architectural grandeur and the unique ambience in a city that has seen much of its pub heritage ripped out, he also appreciates that unless it is making a contribution to the empire it won’t fit in with his business philosophy.
“Having the group is like a weighing scales – certain ones are doing well while others may be suffering” he says.
“The secret is to identify problems if they arise and either sell out or invest. There are pubs we have had to sell in the last couple of years, that we had for many years and were great earners for the group, but they weren’t really foody pubs, they didn’t fit any more.
“You can’t afford to be sentimental, not in the climate we are in. Our outlook has changed because the pub business has changed. We have to anticipate the future and what is working for us – good locations, energy to run the business and get good staff and management.”
He owns 20 pubs and two hotels and employs 950 people, all, apart from The Quays in Galway, in and around the greater Dublin area.
His Cregagh Investment, founded in 1981, is a private company, but it is safe to say that its assets run into hundreds of millions. One of his subsidiary companies employs 321 staff, has assets of €125m and shareholder funds of €13.8m.
“I invest in myself only. It’s a business I know. I won’t invest in anybody else. My ideas are as good as anybody else’s, that’s the way I am and that’s the way I have always been” he says. “I have no interest in partnership. I don’t want to rent, I want to own my own properties. Everything we have is owned solely by ourselves.”
At the age of 71, although he looks much younger, his thoughts have turned in recent times to the future of what is a private family run empire, where all his five children work, but one which he and his wife Helen have controlled since he bought his first pub at the age of 23.
“You have to consider the future when you come to that age. Where are we going from here? I knew where I was going when I was young, so in fairness to all of them we had to decide where the future lay.
“Last week we had a family meeting and one of the questions on the agenda was what they would like to see happening in the business. Would they like to hold on to the business? Should we sell it? Or had they any other ideas? All of them said they want the business to continue and work in the business” he says, adding, “I was glad of that.”
His children Barry, Edward, Louise, Niamh and LJ, who has just finished his masters, all work in the business.
“After all these years there is one lesson you learn ... all families are different. I have known some families in this business, some of them very well, and they haven’t been able to deal with that question,” he says.
“But that is a discussion you have to face at some point. I enjoy what I do and I want to continue to work, but I don’t want to be a hindrance to the business. I want to be able to step back a bit and let the family run the business.”
After coming up from Tipperary, Fitzgerald bought his first pub in Townsend Street, Dublin, in 1968.
“There were three pubs within a short distance of each other: Scanlon’s, Grace’s and Fitzgerald’s,” he says. “Fitzgerald’s was the cheapest pub in Dublin. It was turning over £80 a week.”
As a second son and knowing that he would not inherit the farm, his mother, obviously a very smart woman, started paying into an insurance policy when he was young and made him continue to pay into it when he got a job as a barman, on the basis that it was locked into the policy and couldn’t be touched for day-to-day needs.
“When I went to the bank manager he asked ‘if I give you money how do you expect to pay me back?’ I explained that I would take 25pc business away from the other two pubs and I could get another 25pc from people coming down the street. It was a simple plan, so he told me ‘I am going to give you the money.’ It was £9,300. I had £2,300 from the insurance policy and a customer where I was working loaned me £500 and I borrowed the rest. “It was the only pub I ever owned that I paid for in the first year. Turnover of £80 a week went to £560. How did I do it? The first thing I did was go down to Clerys and buy a red carpet – it was the first carpet that was seen in a pub in that part of the city and there was so much talk about it that people came in just to look at it, and of course they had a drink. “Then I opened a piano bar upstairs. I sold it after two years and moved on, but that was the start of the group.” Fitzgerald has been buying pubs ever since. He also invests in plots of land, not to develop, but as investments. One of those early investments earned him £200,000, which he thought would give him the capital to buy The Palmerstown House. But it was 1979 and he hadn’t factored in the periodic recessions that Ireland goes through.
“I came through a number of recessions over the last 30 years. The 70s recession was beneficial to me and the pub business.
“But in 1979 when I went to buy The Palmerstown House the price was £300,000 and the bank wouldn’t loan me the €100,000 I needed. There was no lending at the time — they just told me they hadn’t got the money.”
Never one to give up easily, he borrowed the balance in Dutch Guilder, something that cost him a lot of money when he had to pay it back at different exchange rates later on.
“The last recession was the Tiger of them all. It attacked almost everything. I was lucky the pubs were in good locations. I was dealing with Anglo Irish Bank, IBRC as it became. I was one of the few customers paying interest and principal.
“I negotiated to pay off the IBRC loans and re-finance. They wouldn’t give me a cent discount. But I paid it all off. The (Fitzgerald) Group didn’t cost the taxpayer a farthing.” The loans were re-financed through Allied Irish Banks and Broadhaven Credit Partners, which is backed by Sankaty Advisors, a US credit specialist and Dermot Desmond.
Fitzgerald is happy with the result. “I have had a wonderful relationship with the banks. There is never any difficulty if you are measured and articulate in your relationship with them.”
But in the end it comes backs to pubs and the hospitality industry. It’s the business he knows best and for him it’s about having the right management and staff in place to run them profitably.
“A great pub, like this one, is a pub with history, doing business for a long number of years and looks like it will still be doing business a long into the future, provided the management and staff can match it. This and Kehoes (in South Anne Street) are unique in their own sense and in the sense of the management and staff we have in them.”
If there is one negative in the business it is the lost generation of the recession. “A lot of really good staff emigrated ... I was expecting them back, but they’re not coming. I would like a signal going out to entice them home, but the cost of living is not encouraging.”
Louis looks at his watch — he has to be on his way. He may be changing lanes, but he’s not slowing down yet.
‘A lot of the really good staff emigrated ... I was expecting them back but they’re not coming’ ‘I explained I would take 25pc of business away from the two other pubs and get the same from people coming down the street’