Business

Avia Collinder, Business Writer

Island Entertainment Brands (IEB), which operates the Margaritaville franchise in Jamaica and the Caribbean, says it is investing upwards of US$2 million - with the backing of PanCaribbean - primarily in upgrading and replacement of equipment in the sports bar chain and the addition of new management talent.

IEB owners Ian Dear and Brian Jardim, who now run 14 clubs and restaurants in three countries - Jamaica, Grand Cayman in the Cayman Islands, and Grand Turk in the Turks and Caicos Islands - are also planning to expand their footprint to The Bahamas, Puerto Rico, the US Virgin Islands and the Eastern Caribbean during 2011.

The funds for investment, which work out to J$170 million, are mostly being sourced as a loan.

"We are trying to finance as much as we can, and most of that is coming from PanCaribbean," said Dear, IEB's chief executive officer.

"If there is any shortfall, we will make it up with our own money."

IEB says its expansion strategy includes identifying investment partners, as well as the development of new brands.

"There is no franchising involved," Dear told the Financial Gleaner.

"We will be operating Margaritaville with our own teams, and will be creating new brands for each island, depending on what the market requires there, adding to our own entertainment core," he said.

New management talent

The company has also revamped its management structure, adding a new vice-president of operations, Stephen Deere, and a chief financial officer, Roland Clarke - two professionals intended to help position the company for expansion, said Dear.

IEB operations include the Margaritaville sports bar franchise - one each in Negril, Montego Bay and Ocho Rios, two at Sangster International Airport, and one each in the Cayman Islands and Turks and Caicos Islands; as well as proprietary brands Marguerites seafood restaurant, Blue Beat jazz bar, Groovy Grouper, and the Jamaican Bobsled Café, a casual eatery for light food and drink.

IEB, like other companies, has seen a drop in business in the recession, which Dear linked to declining cruise business flowing through Jamaican ports. Its entertainment facilities are 80 per cent dependent on tourists for its income.

Dear said revenue for the group fell off by as much as 33 per cent since early 2008, but added that, with theplanned move into new markets, 2011 was expected to be a time of recovery.

"It was not that there were fewer bodies, but that they had less money to spend. People were even sharing burgers. There was less disposable income," he told the Financial Gleaner.

"The last three years were rough. We had to put ourselves in a mode to maintain the product and keep ourselves afloat. This was the status up to the end of the last winter season, April 2010. After that, we got into the mode of reorganising the business and putting in a new team."

New markets

Dear said IEB's bankers, PanCaribbean and FirstCaribbean, have stuck with the company and are helping the business position for new markets.

"We have good business plans and our bankers believe in what we do," he said.

The investment in new leadership, he added, was critical to the way forward, which includes expansion to other Caribbean islands.

"We have a formula which involves finding developers to partner with us in new territories. They have the capital and we have the long-term commitment. We are targeting islands which have high-volume cruise ship passengers and a decent inventory of rooms. This includes the Eastern Caribbean, US Virgin Islands, The Bahamas and Puerto Rico."

Jamaica remains an excellent market, with good promotions, well-priced room inventory and great airlift, but is lacking, Dear said, in the area of customer experience on the ground because of the poor physical condition of the resort areas.

To ensure that IEB avoids this perceived service and product malaise, Dear is organising a retraining programme for more than 700 of the company's staff, which includes upgrading the skill levels of chefs.

He also plans to bring in deejays and other talent to refresh the entertainment packages offered at IEB locales.

Dear said that with most tourists restricted to all-inclusives, IEB invested heavily in free shuttle services to take visitors from their hotels to its clubs and restaurants.

Marketing related to getting tourists out of the hotels and into the clubs is also costly, he noted.

Jardim and Dear opened their first restaurant, Marguerites, in 1996.

"Then six months later we started our own Margaritaville, which was a completely Jamaican operation," Dear said.

"We converted to Jimmy Buffett four years later when we met him, saw how nice he was and realised that he would add brand recognition in North America and Canada."

The first sports bar in Montego Bay was opened in 2000 after concluding negotiations with Buffett to become Caribbean franchise holders for Margaritaville.

avia.collinder@gleanerjm.com