The Merivale effect: an insight into Sydney’s hospitality empire

30 November, 2015 by
Danielle Bowling

With a seemingly endless supply of inspired concepts, Merivale is dominating Sydney’s hospitality scene. Danielle Bowling recently caught up with the man behind the empire, CEO Justin Hemmes.

Which industries would you say are most fickle? At the top of the list would have to be food and fashion, right? Any business that wants to dominate in these fields needs to be well versed in what its customers want today, and what they’re likely to want tomorrow.  And this is what Merivale –a company which has mastered both food and fashion – does best.

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Launching in 1959 as a fashion brand, The House of Merivale, the company was founded by John and Merivale Hemmes and is credited with revolutionising Australian fashion through its three boutiques in Sydney's Pitt Street, two in Melbourne and one in Canberra.

Nearly 40 years later, in 1996, it closed its last fashion stores and shifted its focus entirely to Sydney’s hospitality industry.

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It’s never looked back.

Today, the company is operated by John and Merivale’s son, Justin. It boasts more than 50 restaurants, bars, pubs, hotels and function spaces in Sydney, has approximately 2,500 staff and is showing no signs of slowing down.

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With venues including the two-hatted Est., Mr Wong, the Coogee Pavilion, Papi Chulo, the ivy and Bistrode CBD, Merivale doesn’t have a clearly defined growth strategy, Hemmes says;  it’s more about opportunities and instinct.

“I’m led by opportunities. As an opportunity presents itself, then I decide if I take it up or not. It’s not a growth strategy as such. Hence the reason we will have growth, and then maybe a little bit less action. But in saying that, we’ve got a lot going on at the moment.”

Indeed. Merivale is working on seven new concepts due to launch by February 2016. The company has gone through a period of acquiring well-loved, if not iconic venues around the city, including Enmore’s Queen Victoria Hotel in April, the Paddington Arms Hotel in February 2014, the Beach Palace Hotel in Coogee in April 2014 (now The Coogee Pavilion), and in March this year, the Newport Arms Hotel.

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A handful of Merivale chefs

So how does Hemmes know if an opportunity is worth pursuing? Well, along with what his gut feeling is telling him, the site also needs “a bit of magic.”

“I think it’s just instinctive. So many variables depend on it. It depends on where we’re at, where I’m at personally with the business model, what our focus is on, how well I know the area, or maybe I don’t know the area but what my gut feeling for it is, and what resources we have available.”

Hemmes says he’d rather take over existing sites rather than build new ones. His sister, Bettina, is responsible for the interior design of a lot of the group’s venues, and between the two of them they like to take the charm of community favourites and add their own spin to them.

“Generally venues that have recently been done up aren’t of great interest. We like to put our angle, our touch, on everything. So if a substantial amount of money has been spent to get [a site] to a certain level, it’s not as exciting to us.”

Trusting your gut
Hemmes isn’t afraid to say that his personal taste influences the design and experiences on offer at Merivale’s restaurants, cafs and bars. And that’s because it’s balanced with a good understanding of the state of the industry and an awareness of what the local area is lacking in its foodservice offering.

“It’s personal taste, and then as my tastes evolve and my sister’s tastes evolve, we tend to design around that,” he says. “In terms of the offering, it has a lot to do with the area that it’s going into. We try to tailor each offering to suit the local community, whether it be in the city, the suburbs or just out of the perimeter of the city. Every venue has to relate to the people that live in the area.”

No two Merivale venues are the same. The fit-out, menu and ambience at each is completely unique, not just to the group, but often to the city as well. This is, of course, intentional, with Hemmes determined to keep both staff and punters energised and excited. There are a few common threads tying it all together, however.

coogee1.jpgCoogee Pavilion

“We certainly strive for excellence in service; we want all our venues to be comfortable. We try not to be a fad. We try not to be too cool. We want to build places where people get value for money, whether it’s a fine dining, expensive experience or a very accessible family experience. We strive for value for money and great service in a comfortable environment, as well as consistency of product.”

As Hemmes has matured, so too has the business. Just as his personal tastes influence venues’ look and feel, the company’s direction has shifted as its CEO has aged.

“We’ve certainly moved from one end of the hospitality stick, and we’re heading down to the other: the more food and beverage oriented path as opposed to the nightclub path of 15 to 20 years ago,” he explains.

“It comes down to our maturity, my maturity, and a change in what my habits are. Fifteen years ago I wanted to go to a club for a good night. I don’t anymore; I’d rather go and have a fantastic meal and a nice drink in a beautiful setting. It’s personal taste.”

While the company still has a strong presence in the nightclub sector, with venues including Chinese Laundry and regular gigs at the ivy like Pacha Sydney and Marco Polo, Hemmes says the clubbing scene has changed, insisting that the experience is “more wild, less sophisticated” now.

In years gone by, every Merivale venue would have a nightclub experience on offer, but those days are over, he says, and they were over long before the state government introduced the now infamous lockout laws, which many venue operators have blamed for their demise.

“Each new venue had a nightclub element to it, whereas in the past five years or so we’ve pulled away from that, which was well before the lockout laws. We changed Tank, which was a huge nightclub in Establishment with a 2,000 capacity club that went for 10 years – we changed that into Mr Wong and Palmer & Co. So it’s a progression and a change in our offering that’s been going for some time, well before the lockouts, but it looks like it was the right decision.”

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Knowing your city
If Sydney’s nightclub frequenters have lost some sophistication, its diners have gained it in spades. Hemmes says the biggest change he’s witnessed in the city’s hospitality industry is the quality of food and beverage being served up day in, day out. It’s what makes Sydney a global leader, he insists.

“The customer has evolved tremendously over the last 20 years. It’s a very different market; it’s a very evolved market. The customer is very astute and very well educated when it comes to food and beverage. They have very high expectations, which is a wonderful thing because it pushes us to deliver our best and continue to improve all the time.

“They’re a very well educated customer, probably more so than anywhere I’ve seen in the world, actually. I think as a result of that, in general our average is very high compared to around the world. It seems that any venue you walk into in Sydney or Australia, you’re going to get a good experience, whereas I don’t think I could say the same for most places around the world.”

Never before has the city offered such a diverse range of foodservice establishments. But is it too crowded? Is there too much competition? Hemmes thinks not.

“I think there are enough people to go ‘round. But not only is there enough, people are going out more often … People are really excited about going out and socialising and it doesn’t have to be a big event. People can just go out for a bite to eat and a glass of wine and a chat. I think it’s lovely, the way the market’s moving.

A shared struggle
Despite its size and the diversity of its portfolio, Merivale isn’t immune to the challenges faced by other foodservice operators, especially when it comes to recruiting and retaining talent.

Hemmes concedes there is a shortage of hospitality workers in the industry, and says he’d like to see the state government introduce additional incentives for current and potential industry members, as well as more training academies.

“I think we need to put a lot more focus on that: training up young, aspiring talent to stay in the industry, because tourism and hospitality is going to be the most important industry, I think, in the country.”

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Mr Wong

Sourcing enough staff to fill the vacancies that come up as the business grows is the Merivale’s biggest struggle; it needs more than 500 people to help relaunch Newport Arms early next year, and that’s just one of its upcoming projects…

The challenge becomes harder as you move away from the CBD, but what Merivale has that other businesses may lack is a commitment to the professional development of its staff, and the resources to be able to foster it.

“There are great opportunities for them to grow in our businesses, and there are always senior management opportunities coming up, and new venues opening. So they can advance very quickly within our business. It’s not like they get to a point where they’re at a stalemate.”

It may be hard to find talent to fill positions, but the quality and talent of industry members is better than it’s ever been, Hemmes says.

“The pool of talent that we can tap into now for food and beverage is far greater and far more exciting than it was 10 years ago. It was very limited before. It was limited to a handful of restaurants whereas now the talent coming through … is extraordinary.”

While it’s often easy for workers in large organisations to feel like just another cog in the wheel, Hemmes says he does his best to keep Merivale’s team members engaged and motivated. The company’s incredible growth and success makes it an enjoyable place to work too, he adds.

“The bigger you get, the more pumped people get. They share in the excitement of the growth and they see the company growing, so it eggs them on and it excites and motivates them. You should see our staff parties; they’re extraordinary.

“I just try to treat them with the utmost respect, because they’re the most important tool in our business. I just want them to treat the customer so well, so I want to treat them well so they share the love.”