Rex Rozario’s Next Big Thing, Part 1
Barry Matties joins Rex Rozario at Lympstone Manor, one of Rex’s investments outside of the electronics industry. The property, once an old country house in the Exeter countryside, has been transformed into a splendid hotel and restaurant. Joining them is Michael Caines, a Michelin Star chef from the UK who is heading the project.
Barry Matties: Rex, tell us a little bit about this project, which is well outside of the electronics industry.
Rex Rozario: Well, I’ve always had an interest in hotels; I’ve been looking at things like this. There was a manor house many years ago. It was always in the back of my mind to get in one, and of course, I used to visit the Royal Clarence, and this is where I met Michael. This has carried onward since then. There was Gidleigh Park, and so we have been there a few times.
Also, whenever I went into some of the CBI conferences, there was always a Michael Caines restaurant in the hotel. We had the Rural Development Agency, and Michael and I got sort of lured in to be ambassadors to go around and promote. We had some great people with us, a great DJ and a wonderful actress from “The Railway Children.” She was an ambassador as well. We were at a distance, but we were in town.
Matties: You guys have known each other for some years now?
Rozario: Yeah, and of course, I have Rendezvous, a wine bar and restaurant in Exeter.
Matties: We were there last night. Quite delicious.
Rozario: It is across the road from the very elaborate Royal Clarence. So we kept in touch. I’ve been sort of following Michael, because he's like a local hero. I’m also interested in chefs, and there are only a few of them in the UK with Michelin Stars, so that was a big attraction.
Matties: Michael, can you tell us about your Michelin Star status?
Michael Caines: At Gidleigh Park, I had two Michelin Stars for 18 years. I decided that it was time to leave after 21 years; that must have been around about 19 years ago. I kind of thought that it’s my time to move on and do something for myself. I just started talking about that as an idea. I have a business partner, and my accountant, David, who’s always helped me with very different things. We set up the restaurant at the Royal Clarence, which then became a joint venture with Mr. Brownsword. He’s a very successful businessman in the UK, and based here in the Southwest.
Then we did the ABode Hotels, which is what Rex was referring to, where he used to go to hotels where my restaurant was within. Of course, along the way, you meet these great people within our local business community who frequent and dine, and they’ve all ended up being investors in this project. For me, the start point of the whole project was about trying to fulfill my own ambition and realize my own dream.
Having spent many, many years representing the Southwest and championing the cause of it, and doing lots of things for other people, it felt like it was time to do something for myself. That was important. I realized to do that, I had to leave my current arrangement with Mr. Brownsword, which was quite a lengthy process. It was done in a very amicable and very supportive way, and it left me then the ability to be independent and think about what I wanted to do.
Which, I think when you spend a lot of time working for someone else, that takes a bit of time to then work out what you feel is right for yourself. I didn’t want to go to London. I didn’t want to leave the southwest. If I was going to stay in the southwest, what type of business would it be that I’d like to try and find, and where would I want to be if I could? That just became so much the focus of my attention. They say in life, and in business, "The best time to plant a tree is 20 years ago. If you haven’t done it then, then it’s today."
I thought, "Well, I'd better get on with it." I wouldn’t say I was running out of time, but I felt that I was at the peak. 18 years at two stars, very successful track record, but I had to do something for myself. That opportunity doesn't come around very often, and you have to make that opportunity happen. So I started thinking about how I could do that.
Matties: You started this project about a year ago?
Caines: Well, this is three years since I left.
Matties: Three years in the making.
Caines: Yeah. If you can think back by year, I started thinking about what I should do in 2016. 2013 and 2014 was the year where I said I was going to leave. In 2014, I was looking at how I might formulate a business memorandum, which obviously you need to send to your potential investors. In 2014, I started looking at potential properties. I wanted to be in East Devon. It was a very good area. I wanted to be local to my hometown, Exeter.
I looked at Rockbeare Manor just outside of Exeter, and then I looked at Combe House. It was while I was looking at Combe House, which was an existing hotel, that somebody said, "You should come have a look at this Cortland’s Estate, which is called Cortland’s Mansion. It’s got amazing views." I didn’t know it existed. I came here, saw it in July 2014, and realized that this was it. This was the place.
Matties: You knew immediately?
Caines: Immediately, yeah. By 2014, we put in an offer. It was accepted in August. Then I had one or two potential investors saying, "Well, it sounds good." I had the money I had got out of my previous business arrangement that I put in to get the deposit and safeguard it, and start to pay for the planning, the architectural work, and the plans. So I could put it together as a memorandum.
Then we finally exchanged in November, and once I did that, I could then go public on it. I put together a little bit of a press release, and then we had a black book of people, potentially, and I got an email from Rex saying that he’d read about my new venture and that he’d love to get involved. That was fantastic, because we had that connection as we'd met before, but I didn’t want to take that for granted. We had a chat, and I went to see him with Martin, a business investor.
The thing that struck me, despite all of that, was what Rex said to me, "You're why I’m investing. You're the reason why we’re getting involved. We believe in the concept. We think it’s going to be great." They came and looked around the house. It was fairly dilapidated, but they could see the potential too. I had to sort of talk about the vision. There’s one particular painting that caught Rex’s eye and Ruth's eye, because it’s actually painted by somebody of the same name. We managed to save that from the building and give it to Rex.
Rozario: When Michael signed with David, I said, "Can you look at the picture?" We were in the car. Michael came out to the car and said, "You can take it with you." It’s in our house now, that picture there. It’s signed "Rozario." I tell everybody, "That’s me. That’s me."
Caines: Once I found the property, I didn’t have all the investors. We had to put out the memorandum. We had to try and put a cost plan together, and we had to raise money. Some of it obviously coming from the bank. We’re very, very lucky that we ended up with a good group of investors that are all Southwest-based, very successful in their own right with great track records, but also, people who could see themselves enjoying the property for itself. Overwhelmingly, they were all of the same mindset, in that they were helping me fulfill my dream. Yes, it was a business deal. Yes, it had to stack up, but they believed in the product.
Matties: Well, the thing that you said that really strikes me is, "Business isn't anything but people working together." You’re investing in Michael, and that's where a great investment starts, is with the people that you invest in. Not the concept. If you invest in great people, the concepts are going to work.
Rozario: And Michael was also a celebrity. He was on television.
Matties: Oh, "celebrity chef" is what we call that in America.
Rozario: Like at Gidleigh Park, for three consecutive years, which was the number one restaurant in the UK, according to the Sunday Times. Now, there were other celebrity chefs as well, and they've got restaurants, but Michael’s restaurant was the number one. That was a big thing that he was in front of all those guys.
Matties: Well, another thing that struck me when we were talking during lunch is it’s not just about the food. Your background is also on the business side of this, and I think that really helps to the formula of success in any model, having that acumen.
Caines: Yeah, it was acumen that perhaps wasn’t always visible. Clearly, I’ve been able to show a lot of different skills in this project. We took a very hands-on approach. We've very much driven the project from design, to interiors, and then even the project itself, where we had a few challenges, and we became the principal contractors. I had always the back and forth, because we always demonstrated a full understanding of those challenges. My personality and perseverance through the project was also very important, that I wasn’t absent when the key time mattered, and that I remained proactive in making decisions.
Actually, what your board and investors want is to know what the facts are, and the solutions you are offering. They don’t want procrastination or hesitation. The good thing is that all of us had bought into the idea that we wanted to create something fabulous. All of us recognized that the price point had moved. It was unfortunate, but we decided as a team that we would continue down the path of creating a fantastic product.
We all knew that we were challenged, and we all knew that the building game can sometimes be difficult. But we never lost focus on the end goal, nor did we dilute along the way our aspirations to create something incredible. That trust and that bond over those challenging months has given us a very open and honest, and I think a very transparent relationship between the investors, the investment in the project, and the team that work here to deliver that.
The most satisfying moment of all was actually having the investors here and showing them what we had created and them staying and being a part of it. Because so many people invest in things that aren’t tangible and that don’t really impact in their lives. You don’t see them. They’re silent. With this project, it really has become a part of people’s lives, where people talk about it. It’s in the papers, and they take a huge amount of pride in knowing that they’ve helped realize my dream, and in doing so, they give themselves a place to come and be welcome, and be entertained. Also, that have put faith in me to show that I have those skills. Not just as a chef, but as a businessman or entrepreneur. Also, that with the team that we put together today, we’ve been able to demonstrate that our figures are working and that we've got the right measurements and tools to manage it.
We don’t want to be going back to our investors saying that we’re not very successful. We're bad at managing the business. We need more money, because we don't have any fiscal discipline, or the right accounting or accountability within our company. Because we’re all about attention to detail. It’s in our mindset to look at everything in that way, whether it’s the figures, or the business plan, or the aspirations to grow. We’re always looking at it with key measurability based on performance, and delivering a high-quality product.
I think that’s good, having been trusted as a businessman in your own right with that opportunity. To show that we're able to now, three months on, deliver to them not only a great product, but also a product that’s going to make the return on investment that we’ve anticipated. It gives us a chance to look, acquire, and develop the business, and add a star perhaps in time and what not, and grow the business, knowing that we have created something special together.
Then we share through what we do with events, like our Formula 1 event next week, which is something which doesn’t happen very often. We’ve got that partnership that we're growing, and the relationships that we're growing outside of this business, because we’ve created something that everybody wants to be a part of.
Matties: It’s unique.
Caines: Yeah, it is unique. In this landscape, these types of things don’t happen very often. It’s not like we bought a hotel and turned it into a better hotel. We bought a run-down country house and transformed it into this beautiful hotel. It’s easy to sit here now and say what it is. It all makes sense. But when we started, it didn’t always look like that.
Editor's note: Click here for Part 2.