The nightclub millionaire who is buying up St Andrews
He built his empire in Glasgow... now Stefan King is snapping up businesses in the Fife town. But at what cost to the locals?
‘The way they treat staff is dreadful’
‘Working practices shown to fall short’
NESTLED on Millionaires’ Row a short walk from the world’s most famous golf links, the villa may not quite be the grandest in the street. But judging from the extensive refurbishment taking place inside and out – and its owner’s reputation for refits – it will surely be among the most stylish in St Andrews.
Besides, Stefan King, Scotland’s most successful leisure magnate, already has plenty of grand buildings in the Fife town.
There is, for example, the Vic in St Mary’s Place – a huge pub/kitchen and social club aimed at younger patrons. Then, a few doors along, there is the Grill House restaurant specialising in Mexican food and steaks.
This eaterie is not to be confused with two other restaurants, the Glass House over in North Street and the Doll’s House a stone’s throw away in Church Square – although Mr King’s company the G1 Group owns them too.
A hop and a skip away, in Market Street we find Forgan’s, a lavishly fitted out restaurant which takes its name from the golf club factory that, many decades ago, occupied this space. Book now for your executive dinner there during Open Championship week in July. Only £89.95 a head.
Right next door is Mitchell’s, a restaurant and deli on the site where Murray Mitchell’s butcher shop used to be. Riding on its predecessor’s renown, the new place retains the Mitchell name and has a brass inlay in the doorway which reads ‘Master Butcher’. Critics observe the G1 Group has become highly adept at trading on history which is not its own.
All told, that makes six G1 outlets in an area not much bigger than a cricket pitch – plus the holiday home overlooking the town’s iconic West Sands.
St Andrews is not G1’s only stronghold but, with a permanent population of only 16,500, it is where the firm’s dominance is most obvious. Elsewhere the leisure giant has a dizzying and ever expanding portfolio of hotels, restaurants, pubs and clubs. So many, in fact, that it seems coy about admitting to some of them.
At the head of the business is suave Mr King, 52, a born entrepreneur from a private school background who picked his gap in the market then swiftly made vast chunks of the rest of it his own.
A boyfriend of pop singer Sinitta in the 1990s – she claims he and Simon Cowell fought over her – he has become i n middle age a deeply private, even secretive figure at the serious money end of Scotland’s business community.
Yet in the nightspots and eateries of Glasgow, Edinburgh, Aberdeen, Dundee, Perth, Stirling and his latest power base, St Andrews, his signature style seems to be everywhere.
By any standard, Mr King’s 30-year journey to dominance in this riskiest of industries is a remarkable success story. But i s the backlash now beginning?
It is, certainly, in St Andrews where few locals are yet aware that Mr King has bought a holiday home which, after renovations, will be worth well in excess of £1million.
A week ago one of the town’s few remaining local traders, fruit and veg shop John Birrell & Son closed its doors after more than 40 years in the same spot on South Street. Lynn Birrell, whose family ran the business, said the final straw was when G1 took over the Grill House, the Doll’s House and the Glass House last year and awarded their fruit and veg contract to outside suppliers.
‘We were told from the start that as part of a chain they would no longer be using us,’ she said.
‘It had a big impact on us because that was three major customers in the town for us. Unfortunately the chains have a bigger buying power so they are buying a lot more and getting a cheaper price. We were just one family run business, but the only fruit and veg one in town.’
Further along South Street is the town’s only independent fishmonger, Mark Keracher, whose family business dates back 90 years.
He said: ‘I just don’t believe that, in a town the size of St Andrews, you should be able to own more than one or two venues like that. G1 has got the big six and I just think that’s far too much of a stranglehold.’
Mr Keracher says his shop used to supply upmarket clients such as the Peat Inn near St Andrews and the Old Course Hotel. But the days when he could expect any cut of the action from a big chain like G1 moving in are long gone.
Another prominent voice in the town goes further – while asking not to be named. ‘G1 owning so much of the town is a disgrace,’ she says. ‘They should have been subject to the Monopolies and Mergers Commission. They make a good job of their restaurants, that’s certainly true, but the way they treat their staff is dreadful.’
That, lately, has become another sore point for G1. It has long been known that many of its staff are employed on minimum wages – often belying the grandeur of their workplaces. But in March, G1 was publicly shamed in an HM Revenue & Customs investigation for failing to pay even the minimum to some workers.
That brought former employees out of the woodwork. They claimed it was common for staff to pay for their own uniforms and training – and some complained of almost Dickensian working conditions.
‘We were never paid past 4am but we weren’t allowed to leave if they still needed us,’ remembered one former worker who was employed at Arta bar in Glasgow’s Merchant City.
‘I’d often come to work only to be sent home with no pay. The worst part was we would work 12-hour shifts on our feet with a 15-minute break, or sometimes no break.’
For its part, G1 denied any staff were on zero hours contracts but said workers could be sent home if the venue was not busy enough. It admitted that, in insisting employees contributed to the cost of their workwear or training, it had forced some below the minimum wage.
Further embarrassment followed last month when socialist campaigners staged a protest outside G1’s headquarters in Glasgow’s West End. Members of the Scottish Trade Unionist and Socialist Coalition gathered with a megaphone outside the grandiose former BBC building in Queen Margaret Drive – bought by King in 2011 – to chant such slogans as ‘£10 an hour’ and ‘ Scrap zero hours’.
Leading t he protest, Angela McCormick said: ‘ It’s G1, it’s an organisation which has employed thousands of students and young people throughout the years and their working practices have been shown to fall way short.’
Earlier in the year there was another humiliating setback. G1 was removed from a government training scheme after huge sums of money were found to have been incorrectly paid to its training company. The firm agreed to pay back £411,834 of cash it should never have received.
For a tycoon like Mr King the focus on his company’s pay and conditions made for an uncomfortable juxtaposit i on. Many of hi s v e nues – particularly the flagship Corinthian in Glasgow – reek of elegance and grandeur. He goes for bold, iconic buildings and sumptuous interiors for customers to gaze at and guess the price tag. But behind the glamorous veneer was an employer who was paying no better wages – in fact, worse – than an East End greasy spoon.
In fairness, Mr King has tried his hand at downmarket business too. His first venture, as a 19-year-old not long out of Hutchesons’ Grammar School in Glasgow, was Kwik Travel which peddled cheap and cheerful package holidays.
It folded within five years as the young entrepreneur was beset with demands for compensation over delayed flights and cancelled breaks.
When he asked his father George for
financial backing for his next business plan, the answer was no. Instead Mr King Snr pointed to the flash Mercedes his son had bought when the travel company was thriving and suggested that should provide him with ample start-up money. It did, and the young wheeler dealer never looked back.
First, he established two Glasgow city centre sandwich shops, calling each No 1 Sandwich Street.
Then he ploughed his profits and a huge overdraft into his first night club, Club X on Royal Exchange Square. It was a gay venue in a macho city where few of the existing pub and club operators would ever have dreamed such a venture could succeed. But Mr King understood ‘the pink pound’. It paid for his expansion into mainstream nightclubs and beyond.
After Club X came the gay bar Delmonicas, then Café Latte and the Polo Lounge before the launch of super- club Archaos. But it was with the Corinthian, a pub, club and restaurant conversion in a former courthouse with a spectacular ceiling that Mr King really arrived.
Few in a tough, often cynical trade could grasp quite how this yuppie from Glasgow’s South Side had broken through. Why, for example, had Mr King’s clubs not become dens of drugs and violence like so many of his competitors’ venues? He said he hired the best bouncers in the city. Even then, he said, ‘on a very personal level’ he had been ‘subjected to difficult circumstances’.
In plainer language, that meant threatened at gunpoint and beaten up by professional hard men acting for drug lords.
But, in the end, the King empire simply outgrew the threat. Part of his success, undoubtedly, was his attention to detail. Though few recognised him, he was often to be found lurking in the shadows in one of his own venues, watching the flow of business intently.
As one associate remarked: ‘ He takes a very studied, almost intellectual look at the needs and aspirations of clubbers. The proof lies in the fact that he cornered the city’s gay market in such a short space of time.
‘He has an obsessive focus on the latest styles and trends and that comes out in the interior designs of hi s pubs and menus in hi s restaurants.’
Now married to Deborah Soukop, a graduate of St Andrews University, Mr King bought his piedà-terre in the town in 2011 for £975,000. Neighbours can only imagine the splendours it will boast when the refurbishment is complete.
Meanwhile, back in Glasgow, G1’s ubiquity is almost bewildering. In Ashton Lane alone – epicentre of the West End’s bar and restaurant scene – there is Tomboy Burritos & Beers, the Grosvenor Cinema, Grosvenor Café, The Lane Bar, Ketchup and The Research Club.
But are there other nearby establishments with which G1 is less willing to admit involvement?
The Hillhead Book Club, for example, occupies a former cinema building which certainly did belong to G1 as a venue called Gong. Ostensibly it is run by today by Paul McVey, who describes himself as ‘director of stuff ’ there, but who owns it?
Financial records reveal the building in Vinicombe Street was sold by the G1 Group in 2009 to an organisation called G1 Pubs limited.
Company records name Mr King as one of the directors and confirm that G1 Pubs is entirely owned by the G1 Group. There is, however, no mention of G1 on the venue’s website – or of the venue on G1’s website. Many also wondered about The Hyndland Fox, which opened last year in Glasgow’s Clarence Drive as an outlet of delicatessen chain Peckham’s.
Why, until recently, did its receipts have G1’s ‘Corinthian Club’ written at the bottom?
Peckham’s managing director Tony Johnston explained that the Hyndland restaurant is solely a Peckham’s outfit, although G1 did help with ‘staffing and training’ in the early days.
His firm is, however, going into partnership with G1 on a soon-toopen boutique hotel and restaurant in Glasgow’s Glassford Street.
Mr Johnston says: ‘I believe G1 does a lot of good for Scotland. When people get too big there is a tendency to knock them and I completely understand that,’
Of business partner Mr King, he said: ‘He knows what he is doing and he’s got a very, very professional team around him.
‘Sometimes you have to stand back and say, you know something, he deserves the success he’s got. He’s very committed to Scotland and he really does put his money where his mouth is.’
For its part, G1 insists it does use local businesses in St Andrews, citing the local Eden Mill distillery and brewery. But the company refused to respond to any of the Mail’s inquiries.
It leaves unanswered an unsettling question. Is part of Stefan King’s business strategy to hide certain of his outlets in plain sight? If so then it is almost impossible to say just how vast his empire has become.
What is known is that, in 30 years, his appetite for acquisitions has only intensified. How much dominance of the marketplace, some might wonder, is too much?
‘He is very committed to Scotland’