Superdry boss's Cotswolds firm '9 times more profitable' during Covid

The “tatty” marquees outside No 131 the Promenade in Cheltenham helped make Julian Dunkerton’s business more than nine times more profitable during Covid-19. Figures show the site’s profitability increased from £51,000 over the 11 months before the coronavirus lockdown to £490,880 between July 2020 and August 2021 after the marquees were installed.

This has been revealed as two separate plans for a permanent structure to ensure the outdoor seating space have been submitted to Cheltenham Borough Council (CBC). Mr Dunkerton says it was never his intention to keep the white marquees at the front of 129, 131 and 133 Promenade.

Bars and restaurants were allowed to put up such temporary structures for outdoor dining and drinking during the coronavirus pandemic as planning rules were relaxed to ensure social distancing. The white marquees at 131 have proven controversial with many residents and have been described as “tatty”.

But the Superdry founder now says the outdoor seating space is vitally important and is essential to be able to keep 131 in business. And he has submitted two separate proposals to ensure he can still use the space.

The economic impact assessment submitted as part of the planning applications says the installation of the temporary marquees led to total revenues increasing 39 per cent from £4.38 million over 11 months to £6.07 million over the comparative 11 month period post-marquees.

The biggest revenue increase at 131 have been from food sales, which saw a 64 per cent jump, the document reads. Figures show the site’s profitability increased from £51,000 over the 11 months before the coronavirus lockdown to £490,880 between July 2020 and August 2021 after the marquees were installed.

Consultants working on the scheme say this demonstrates without any doubt how transformative the space has been to the commercial viability of 131. However, Cheltenham Civic Society say they were shocked to learn from Gloucestershire Live about the “massive windfall profits generated from all the tents outside its 131 Promenade restaurant”.

They believe 131 has gained an unfair competitive advantage, generating substantial profits as a result of the temporary structures being retained for much longer than was allowed as the enforcement relaxation came to an end in 2022. Temporary plans, to keep the marquees in situ while long term plans were drawn up, have been rejected by the Borough Council and a planning inspector.

An enforcement notice was issued in January this year to have the marquees removed. But an appeal has been lodged against this and the white structures are still standing.

Mr Dunkerton said the Civic Society was talking nonsense about the figures. He said the figures were “flattered” by the VAT and business rate relief businesses received during the Covid pandemic.

He said they were “plucking numbers and coming up with an economic argument telling everyone I’m greedy”. Cheltenham Civic Society Chair Andrew Booton said: "We have now thoroughly examined the Economic Impact Statement submitted last week by Lucky Onion in support of their planning applications for 131.

"The statement puts forward assertions about the economic impact but lacks a robust, evidence-based argument. In fact, it is more of a financial assessment detailing the benefits of the temporary structures to the restaurant’s business, rather than a true economic impact analysis.

"The statement highlights that 131 has seen significant revenue growth by retaining these temporary structures, despite clear instructions from both the CBC and the Planning Inspector that they should be removed. As a result, 131 has gained an unfair competitive advantage, generating substantial profits that can be considered 'supernormal'.

“Their profitability has soared by an astonishing 858 per cent – rising from £51,158 to £489,880 during comparable 11-month trading periods before and after the tents were erected.”

The Civic Society has previously suggested to Lucky Onion that any potential expansion of the restaurant should be focused on the side and rear terraces, rather than the forecourts. This would prevent further damage to the character of the three Grade II* Regency villas.

"If Lucky Onion were to reconsider their plans and follow our suggestions, some of their excess profits could be directed towards relocating the kitchen, which would allow for more sustainable expansion while preserving the integrity of the site,” Mr Booton said.

"Lucky Onion also argues that without the additional trading space, jobs would be lost and the local economy would suffer. However, the reality is that people who wish to dine in Cheltenham wouldn’t simply go home hungry: they would simply visit other restaurants, leading to a redistribution of business and job creation elsewhere.

"In short, Lucky Onion has not made a convincing economic case for the proposed structures on the forecourts. If anything, their statement inadvertently exposes the true motivation for their refusal to remove the tents, as instructed by the Planning Inspector over a year ago.

“The Civic Society has consistently argued that these temporary structures detract from the remarkable setting of the Grade II* buildings within Cheltenham's Central Conservation Area. The success of this business is intrinsically linked to its historic surroundings. Despite Lucky Onion's claims of investing in Cheltenham, their actions reveal that their priorities are more focused on profit than on preserving the town’s heritage.”

Mr Dunkerton said The Civic Society is out of touch with the public as his plans have received “hundreds of positive comments”. He said it was insulting for them to question his architectural understanding as he has won many Civic Awards.

And he explained that the document shows the difference between the outside and the inside. Mr Dunkerton also emphasised that without the outside space 131 will not be able to continue trading.

“The reality of those Covid numbers were flattered by VAT and rates relief,” he said. “This is no longer a viable business without the outside space.

"If you take away the Covid VAT and rates relief, we wouldn’t have survived. “Pre-Covid it was breaking even but due to the cost of finance meant it wasn’t.

"This is altruistic. This is me putting into the town, giving to the town.

"It’s viable with the outside space. It is not viable without the outside space.

“The reality is the Civic Society are plucking numbers and coming up with an economic argument telling everyone I’m greedy. It’s just nonsense. If they understood anything about business.

“As a winner of many Civic Awards, to question my architectural understanding or love is rather insulting. I don’t think there’s a single negative comment from the public on my plans.

“There are hundreds of positive comments about what I want to achieve. The Civic Society is out of touch with both public opinion and the economic realities of Covid relief.”