|By Sarah Bridge, Financial Mail on Sunday, London|
Knight Ridder/Tribune Business News
9, 2004 - David Thomas is sitting in the 25th-floor boardroom of
Whitbread's headquarters overlooking the City, talking about throwing
sacred cows out of the window.
In his seven years as chief executive of the leisure group, he sold off the "sacred cows" of brewing and more than 1,500 pubs, which shook the 250-year old company to the core.
Many observers were horrified by Thomas's actions, and the lack of detail about where Whitbread was heading.
But next month, when Thomas, 60, formally hands over the reins to Alan Parker, he will leave behind him a transformed company that includes brands such as fitness club chain David Lloyd Leisure, hotel groups Travel Inn and Marriott, Costa Coffee shops, Brewers Fayre and TGI Friday's restaurants.
"It is always nice to go out on a high with a great set of results behind me," says Thomas, looking tired but cheerful after a hectic day announcing to investors another period of double-digit earnings growth. "And today I was able to put down even further evidence that Whitbread is turning into the company that's really adding value to shareholders."
Despite his disregard for sacred cows, Thomas says he has an emotional attachment to many of his brands. "I agreed to buy David Lloyd Leisure from David Lloyd personally on the 15th tee of our golf club," he reminisces, leaning back in his leather chair.
"I signed the Costa deal over an espresso in Cafe de Paris in Monte Carlo. And I made the final phone call to Bill Marriott from an island in the South China Sea. So I do have special regard for them, having brought them into the fold."
As far as Whitbread's home-grown brands go, he takes biggest pride in the budget hotel chain Travel Inn, which he took over in 1991 when it was just a handful of sites. It is now the biggest hotel brand in the UK in terms of the number of rooms and guests.
When Thomas took charge of Whitbread in 1997, he realised he had taken over two different businesses -- a leisure group that was on the up and a beer company that had been stagnant for a decade. "The only way forward was consolidation, so I merged the off-licences into First Quench and agreed the purchase of pubs with Allied Domecq," he says.
However, the Allied deal proved a watershed as, first, Hugh Osmond's Punch Taverns gatecrashed the agreement and then the Office of Fair Trading blocked the deal with Allied.
"They gave us a red card," says Thomas, adding with a rueful grin, "which is ironic when you look at the big companies today such as Enterprise Inns and Punch. But that's life."
But contrarily, life became slightly easier for Thomas once the Allied deal was disallowed. "It meant we couldn't stay where we were, we couldn't consolidate and the only way forward was to dispose of the pubs," he says.
"That position was pretty simple to come to terms with and after a lot of hard work we sold the assets for UKpound 400 million over book price and at a return on cash of UKpound 1 billion for our shareholders" But handling the public perception of what the company was doing was harder. "Our employees" view was not just influenced by me but by the Press. I learnt perception was everything," he says.
"Since then we have got our reputation back, bounced back into the FTSE 100 and been able to significantly improve our attractiveness as an employer."
Thomas's German-born wife of 34 years, Ursula, will be glad he is retiring. He often took her on secret trips to check out Whitbread restaurants -- he jokes their two children were brought up in Pizza Hut.
Thomas plans to spend his new-found spare time playing golf and watching his four racehorses -- he is on the board of Sandown Park racecourse. And while he is retiring just short of 20 years in Whitbread -- losing out on his long service gold watch -- he is keen to hang on to his David Lloyd pass.
"I want to die young," he says improbably. "Young at heart."
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(c) 2004, Financial Mail on Sunday, London. Distributed by Knight Ridder/Tribune Business News. YUM, WTB, MAR, PUB, ETI, AED, ALLD,