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21 Jun 2014

‘Nightclubs, if they are run badly, can attract the worst of the worst,’ says Guy Pelly sagely. Pelly became famous organising club nights for his mates Princes William and Harry and for their blue-blooded party crowd, but he’s not talking about the hopeful girls who have flocked to his nightlife ventures, including his current venture, Mexican-themed tequila bar Tonteria on Sloane Square, in the hope of a chance romance with the royals. Pelly’s mind is thousands of miles away in the Gulf, China and Africa, where he and his rivals in the rarefied world of boutique clubbing and dining are expanding their empires at an unprecedented rate in a game of major risk and great rewards.

The smart crowd who attended the opening party at the Bahrain Grand Prix this spring — sheikhs, drivers and the sport’s harem of glamorous women — might not immediately have realised who had organised their night atop Manama’s Domain Hotel, but it was Pelly. It was the same menu of latex-clad dancers, sparklers and oversized Mexican skull masks he put on for the fashion crowd in Paris earlier this year, in a party at Matignon to mark the end of Fashion Week.

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The 32-year-old Pelly, already a millionaire several times over, told Spectator Life that the riches on offer from such ventures could be ‘very significant’. But so could the damage if anything doesn’t go to plan. Speaking to his fellow impresarios — who are opening outlets of clubs like Mahiki, Whisky Mist and Embassy as far afield as Hong Kong, Dubai, Beijing and Abuja — there have already been cautionary tales.

When Pelly started to make his name at the turn of the millennium, his boutique nightclubs, featuring elaborate themes and absurd signature sharing drinks called the Treasure Chest or the Jack-in-the-box which cost more than £100, were a novelty. Now they are ten a penny in London’s most expensive enclaves — and are frequented by a parade of bankers, celebrities and Sloane Rangers spending their parents’ money. These clubs aren’t cool, but for their well-connected young owners, they have been outstandingly lucrative.

The latest sightings of Prince Harry dancing on tables, or someone from Made in Chelsea kissing the wrong person, at Boujis, Mahiki or Whisky Mist — and latterly Bodo’s Schloss and Bunga Bunga — are regularly reported on Mail Online and tweeted about by thousands of virtual hangers-on. And that has created an international demand for London’s most expensive nightlife.

Big Ben ice bucket

‘I get approached by hotel groups and other operators at least once a week,’ says Matt Hermer, 42, whose South Kensington club Boujis was the first London hangout for William and Harry and last year hosted Rihanna and Lady Gaga (on separate occasions). ‘Ninety-nine per cent of the time I am flattered but I’m not interested.’ He learned his lessons about overseas expansion the hard way, having been a few years ahead of the curve when he opened his cocktail bar Eclipse in Cape Town in the Noughties. It was, he says, a ‘rip-roaring success’ and became one of the most popular hangouts in South Africa. Then the partner hotel was bought out by a well-connected local, and things became more difficult. His South African adventure was very soon over.

He opened another Boujis in Barcelona earlier this year, and has plans to add a second Asian Boujis to the Hong Kong outlet he launched a year ago, and says the overseas expansion can be ‘very lucrative if it is successful’, but he acts more cautiously now. ‘It is very dangerous for certain brands to go abroad in the bar and nightclub arena — in this industry it can be political. You don’t know whether you are opening up next to people who aren’t going to like it. You don’t know what the interpretations of the laws are going to be. When we went to Hong Kong we were told we had to be very careful. There was a big concern about Triads, the mafia,’ says Hermer.

Those kind of issues used to be familiar to London club-owners. ‘It’s only ten years ago that a lot of the nightclubs in London had a mafia connection,’ says Pelly. ‘That’s only been cleared up in the last decade.’

Club

Howard Spooner, 43, knows all about that, having run clubs for various clienteles for more than 20 years, including the Clapham Grand, Fulham’s Leopard Lounge, Public in Chelsea and a new venture in Battersea, DNA. He went into business with Pelly when they created Public — which created a brief blaze of Pippa Middleton-related publicity and massive queues down the Kings Road, but which closed in acrimony following complaints from neighbours about vomit on the street, outdoor sex and ‘Made in Chelsea types running around with mummy and daddy’s money’. Spooner says his effete new competitors might find international expansion a challenge. ‘This new breed of nightclub-owners is more public school than ever. I think they have got more chance of a success in the business side, but I think they could well have their pants taken down by local villains in new markets where things don’t work the same way.

‘Going into an unsophisticated market you are going to run into villains. It’s one thing in Verbier, it’s another thing in Hong Kong or India. I know what it was like in the Nineties here in London — there were gangsters all over the place in our business.’

It was in Verbier that Spooner and Pelly had their pants pulled down on their first foreign mission. After taking poor advice on wages and other legal details from a local accountant and picking a bad venue, they found themselves with a workforce who were ‘having their own parties’. In the end they only managed to break even during a ski season that should have made them a lot of money. ‘We got completely turned over,’ says Spooner.

All these businesses are selling a largely mythical idea of London’s royal and celebrity glamour — and no one is more instrumental in this than Pelly. He had his eyes opened in the Alps. ‘Your staff might let five people in who you just don’t want in your club and they can make the atmosphere not great,’ he says. ‘And if you’re not there to say “That’s not the kind of crowd we want in here” and nip that in the bud, you get a reputation as a bad place and that’s the end of you.’

Those kind of stories mean that most of the club-owners are now wary of putting their money in foreign ventures and prefer to sign franchise arrangements where they take a percentage of revenue or profit, or to host the kind of one-off nights that Pelly has just done in Bahrain and Paris. ‘If you’re doing one a month around Europe, then I think that could add another 100 grand or 120 grand a year, so that is significant,’ he says. None of the entrepreneurs who we spoke to are planning any major capital investments.

Mark Fuller, 50, who owns a very profitable string of boutique hotels (Sanctum), fish restaurants (Geales) and clubs (Embassy) with Iron Maiden manager Andy Taylor, says of a franchise deal like his Embassy club in Dubai, ‘If you get it right, you could be looking at a few million over a few years — and you haven’t spent any money on it to start with.’ He — like Hermer — is in talks to move into China next. But he has learned from failed clubs in Portugal and Abu Dhabi, and he’s now vigilant about assessing the dangers.

‘We’ve got a lot of agents who are ex-police, who analyse these places and situations for us. We have them as consultants to check who we are dealing with and whether there have been any problems, whether there are any political problems.’

He was warned that a potential partner in Nigeria might not be forthcoming with money and steered clear. ‘There are different rules in different countries. And some of them have fewer rules,’ he says.

Eiffel Tower champagne

Club-owner Nick House’s portfolio includes the well-established Mahiki, Whisky Mist and Bodo’s Schloss as well as new ones such as Chakana, Rusty Nail and Steam & Rye, a restaurant-bar-cabaret he co-owns with Kelly Brook. He closed his Beirut Whisky Mist eight months ago and is taking it to Dubai instead, where he already has a very successful Mahiki. He says Beirut ‘has amazing energy, but no rules’. When we spoke he was about to fly to Ghana to meet potential partners there.

House says the extraordinary empire-building he and his colleagues are doing is driven by an insatiable demand from abroad for the capital’s clubbing stardust. ‘London is seen as a very aspirational centre, so anything with the London stamp on it carries value. Not taking away anything from the concepts and how great some of these places are — but there’s something to be said for the London halo and the celebrity halo some of them manage to achieve.’

‘If you speak to people in other countries, Sweden or France or anywhere, they do say how far ahead London nightclubs are. It’s amazing,’ says Pelly. How well does he think the British boutique nightlife export surge can go? ‘Slightly… the sky is the limit.’


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