If you asked a Steve Jobs, an Elon Musk, or a Steven Bartlett, if anyone ever created a successful business based on the principal of lounging around, they’d say ‘never.’
But three men from Bristol – Alex Reilley, David Reid, and Jake Bishop – have just proved them wrong.
According to This is Money, Loungers, the all-day hospitality group they launched in 2002, which includes the Lounge, Cosy Club and Brightside outlets, now has “292 venues across the UK and hopes to build the portfolio to at least 600 sites.” And it’s just been sold for £354.4 million.
Loungers is a great British success story. Or, at least, it was. Because, in February, it was acquired by a US private equity giant, Fortress. The company have a history of acquisition in the UK hospitality sector, having previously invested in Majestic Wines and Punch Pubs.
Fortress is cash rich and believed to be looking for the more hospitality opportunities. With, according to Forbes, “about $48 billion in assets under management.” They are majority owned by Mubadala Capital, one of the sovereign wealth funds of the government of Abu Dhabi.
The Loungers purchase is one of a number of recent US investments in the UK’s hospitality sector. The Restaurant Group (owners of Wagamama) was acquired by Apollo Global Management in 2023. Café group Benugo was sold to Clayton, Dubilier & Rice in 2019. And, last year, Marriot’s 33 UK hotels were purchased by KKR and The Baupost Group.
So, what’s driving the trend?
Well, robust growth potential is a key component of the Loungers deal. As Fortress MD, Domnall Tait, told The Guardian, “Management’s continued commitment to the business, gives us confidence in the company’s growth potential and in the opportunity to increase value.”
But, more revealingly, Tait also mentioned Loungers’ “strongly differentiated offer.” And this is an area UK hospitality brands often excel in – the creation of unique, quirky, experience-led environments, ready to be rolled out into other international markets.
Investment in the sector is also part of a more general pattern. According to The Telegraph, “The US now accounts for around a quarter of foreign direct investment in Britain, with companies across the Atlantic ramping up investments because they consider the UK as undervalued compared with Europe.”
It’s likely, then, that American private equity will be back for more UK hospitality deals. Unlike Reilley, Reid, and Bishop’s customers, they won’t be lounging around.