Pirate Studios -- a warning

[Steve Browning]

Accounts show 36 sites with 736 studios generating 13m turnover with cost of sales 9m.

 

Administration costs are 14m so a loss of 10m.

[Wombat]

Loss leader owned by Russian (insert county of your choice) billionaire?

[Al Krow]

1 hour ago, Steve Browning said:

Accounts show 36 sites with 736 studios generating 13m turnover with cost of sales 9m.

 

Administration costs are 14m so a loss of 10m.

 

Admin costs of £14M on what??! It's not like they have a huge amount of staff...

[Dad3353]

51 minutes ago, Al Krow said:

Admin costs of £14M on what??! It's not like they have a huge amount of staff...

 

Cost of financing equipment and property acquisitions and rentals..? Interest rates are cripplingly high.

[Downunderwonder]

1 hour ago, Dad3353 said:

 

Cost of financing equipment and property acquisitions and rentals..? Interest rates are cripplingly high.

OK, what is the 9M cost of sales covering?

[Dad3353]

30 minutes ago, Downunderwonder said:

OK, what is the 9M cost of sales covering?

 

Advertising..? Back-room staff..? Fines for poor fire procedures..? I may not have all the details right, I'm not their accountant. 

[tvickey]

8 hours ago, Wombat said:

Loss leader owned by Russian (insert county of your choice) billionaire?

4/6ths of the owners are resident abroad.  Hong Kong and Singapore.

[Burns-bass]

10 hours ago, Steve Browning said:

Accounts show 36 sites with 736 studios generating 13m turnover with cost of sales 9m.

 

Administration costs are 14m so a loss of 10m.

Cheers Steve. Seems about par for the course.

 

I remember hearing Pizza Express followed a VC-led rapid expansion model and is now sat on £1bn of debt. That’s a lot of pizzas!

 

[Wombat]

They REALLY are Pirates 😂

Edited 20 hours ago by Wombat
Typo

[Burns-bass]

The Pirate business model could be good, and when it started in Bristol, it really was. I used to go to the first one which is literally half a mile from where I’m sat now.

 

Over time, prices creep up, facilities go unloved and equipment falls in quality. The savings are really compromises.

 

When you grow a concept like they have (for light touch engagement with the public) it works in some areas, but not others.

 

The fundamental problem if they don’t own the buildings (which I assume they don’t) they’ll never make a lot of cash. Rent prices will go up where, because if the nature of inflation, mortgage repayments will go down. 
 

Finance means you can run a loss making business into the ground for years and extract cash from it.

 

Safestore, for example, operates a similar model (selling space at a relatively low cost). Difference is that the business owns the buildings and the land I believe.

[Burns-bass]

posted twice (fat hands)

Edited 20 hours ago by Burns-bass