USA
Peter Roberts
Spotting opportunities overlooked by others
Published: 02/06/2019
Peter Roberts has used his surveyor’s training to brilliant effect. Starting out with high-end holiday lodges, he has been a long-term innovator in the property market, spotting opportunities overlooked by others. His most recent project has been PureGym, a 24-hour, low cost gym chain.
It could have been a very different story for Peter. By his early thirties he had a well-established career as a senior partner in a surveying firm, but had grown disillusioned with the nine to five nature of the job. He needed to do something different, to branch out on his own and began looking for opportunities.
While his ventures have been eclectic – from holiday parks to nightclubs to gyms – they have all started in the same way, with ‘fantastically good research’: “You need to make sure the product is definitely right. “Is your market really there? When you think it’s right, go for it! That’s when the element of risk comes.”
His first project started in this way. He bought a caravan park in the South of the Lake District, converting it into high-end Skandi-style holiday lodges. At the time, 1980, this was forward-thinking. Few people had moved beyond caravanning and a lot of the local leisure sector was owned by local authorities. He believed he could create something more ambitious.
It worked. Fired by its success, he progressed to buying a major site in the lakes – Langdale. His vision was to create a successful tourism and holiday resort with a proper indoor leisure centre. At the time, only the exclusive Scottish resort of Gleneagles offered something similar: “I was growing palm trees, it was quite exotic,” he says. It made good returns and was sold it to Scottish & Newcastle in 1989.
He says: “Creating a 365-day holiday resort in a region with 100 inches of rain was a challenge. We sourced triple-glazed buildings from within the Arctic Circle to protect against the elements and created a holiday that the weather couldn’t spoil.
His next venture was a nightclub business – Luminar – which floated on the stock exchange in 1995. At the time, it was the UK’s largest nightclub operator, but it also owned the Chicago Rock Café brand, where clubbers could fuel up, ready for a night of dancing ahead. He backed away after the flotation, turning his attention to supplying restaurant-quality food to pubs through his Countryside Inns venture.
Whitbread was on hand to snap up his next project – the Golden Tulip Hotels, a value hotel chain - set up next to Manchester United’s ground. The football club lent a helping hand, with luminaries such as Ryan Giggs, Sir Alex Ferguson and Paul Scholes opening individual sections of the hotel. He built this up to a 15-strong chain. He said he had started to ‘irritate’ Whitbread by getting to sites quicker, so they decided to buy him out.
What connected these disparate businesses? “They were all pure start-ups and they were all quite heavily researched before we started. The word ‘disruptors’ wasn’t used at the time, but that’s what we were. We needed to differentiate our product from everyone else’s. It was about thinking out of the box.”
It was this thinking that, ultimately, led him to PureGym – his most recent venture. “When we went there, the gym market was staid. We thought it could be much more technology-led, with 24-hour opening and no contracts. We thought we could do this at a lower price, with people being able to cancel easily. There had been a lot of bad publicity on gym contracts.
His approach to financing has always been to start off with a few friends and supporters. As he became more successful, the number of people grew: “I always suggest that people do their first few rounds with angel investment. The Enterprise Investment Scheme (EIS) can make all the difference. Those who use it know that at least if it goes wrong, they get some of their money back through the tax breaks. This makes it easier for entrepreneurs – angels are more forgiving and they generally allow the entrepreneur to get on with it.”
However, he is aware of the perils of external financing. Those providing financing are focused on financial engineering and spreadsheets and, of course, achieving the best possible return in three to five years, which isn’t always compatible with building a business.
He also recognises the need for a great team. The composition of the team will change over time as different projects need different skills – marketing, or business development or property management.
Having exited PureGym in 2017, when the group was bought for £600m+ by US private equity fund Leonard Green & Partners, he now spends his time helping young entrepreneurs to develop their businesses. At the moment, he’s working with around 14 small businesses, providing a combination of finance and expertise and his many years of experience.
He believes entrepreneurs need a bit of company: “You’ve got to have amazing passion for what you’re doing, not least because you’ll work harder than you ever think. Also, it’s a very lonely life in the early years; it’s really helpful to get another person involved. You need to ask yourself what you’re not good at and find people who can complement that.”