Cormac Pettitt: Family empire has more in store for southeast
Hotels and supermarkets are core of business empire that refused to fall for boom-time folly
Cormac Pettitt, managing director of the Pettitt Group: “You think each year the competition is going to ease off a bit but it is actually getting even more competitive. You will see more price cuts in the market this year.” Photograph: Patrick Browne
It is a glorious day and everything is right with the world. The sky is blue, the sea is beautiful and the joggers have a stunning view across the bay as they pound the waterside. It could be Italy or Spain. But this is Wexford, gorgeous in the sunshine.
A bus rolls up outside the Talbot hotel, depositing a posse of tourists on the quayside. Inside, they mill about the lobby in their shades. Waiting staff buzz around the bar, while a funeral party gathers nearby. It is a typical, busy, regional hotel scene.
The Talbot is owned by the Pettitt family, who are firmly part of the Wexford business establishment. The current branch of the family have traded around these parts for 70 years, but their ancestors had local commercial links going back to 1825.
Cormac Pettitt, current managing director of the wider Pettitt group, is aged just 37. A chartered accountant, he took the reins from his father, the far more media-shy Des Pettitt, about eight years ago. Des remains chairman and majority shareholder.
The Pettitts’ empire in the region now includes six supermarkets, five hotels, three pubs, a farm, some property interests and a bowling and leisure centre. From next month, it will expand with Talbot Suites at Stonebridge, a brand new 70-unit aparthotel on the Wexford quays, a €10 million investment.
The profitable group’s overall turnover is about €115 million and staff numbers now approach 1,000. It might be a large business, but it is still a family business. This brings its own challenges, according to the latest generation.
“Family businesses can be tricky, especially with a group of kids,” says Cormac Pettitt. “My father had a very clear view of things [when he was in charge]. He ran the business himself and he kept a simple decision-making process.
“Once I came into the business, he said: ‘There needs to be one person in charge, because if there are two of us here, there could be conflict. You need to build up your own respect and make your own mistakes.’ It was brave of him [to let go].”
The Pettitts are probably best-known for their supermarkets, which have traded for decades under the family name with two outlets in Wexford town, and others in the nearby towns of Gorey, Enniscorthy and Arklow just up the N11. The sixth is about 60 miles away in Athy, Kildare. They all joined the SuperValu banner in 2006.
The 500 bedrooms of the Talbot hotel group, meanwhile, include the Talbot Stillorgan, which was formerly the Stillorgan Park hotel in south Dublin. In addition to the Talbot in Wexford, there is another in Carlow and the group also added two hotels in Cork in 2014.
Cormac Pettitt, who trained as a bean counter with PricewaterhouseCoopers, has overseen the latest phase of expansion. He is conscious that the group should not overextend itself. He is, after all, merely a custodian of the family’s interests.
“We had a philosophy in the good times of not overstretching ourselves,” he insists.
A quick glance at the group’s timeline of expansion backs up his assertion. The last supermarket was acquired in the 1980s. With the exception of the hotel in Carlow, which was developed right at the tailend of the last boom, the Pettitts were relatively restrained during the Celtic Tiger years, a time that chewed up the fortunes of many other Irish business families.
“My father used to get very frustrated by some of the developments that he thought just didn’t make sense. He thought it was madness. There was some frustration, perhaps, that we weren’t going with it. But he held firm.”
As the property market whipped itself into a frenzy more than a decade ago, the Pettitts came close to developing apartments near their supermarket in Athy. But, at the last moment, they decided against it. “It was before everything started to slide. We said ‘no, this is crazy’. It just wasn’t our game, but there was a real temptation at the time.”
In the early years of the recovery, the Pettitts, along with Philip Gavin, who runs the hotel side of the business for the family, saw an opportunity to expand in the hospitality sector. In 2014, they invested up to €12 million buying the Midleton Park hotel in Co Cork (pictured below) and the Oriel hotel in Ballincollig, and also bought the Dome, a bowling and kids play centre next to the Carlow hotel.
“The acquisitions are good, function-oriented hotels, the only hotels in their towns. They had probably been a little neglected before we bought them. Coming from a supermarkets background, building a team for customer service is what we do best.”
The Stonebridge aparthotel on Wexford’s quays, which opens on June 18th, is a new departure for the group.
Stonebridge, according to planning records, was originally a residential project at the very end of the boom developed by James Stafford, a member of another well-known business family from the southeast. The property market crashed and the apartments went unsold as the economic tide went out, and it was placed into receivership. Like a great, big, empty glass-and-steel ornament, it sat unloved and seemingly unwanted for a decade on Wexford’s quays, backing on to one of its main shopping streets. The only sign of life was a TK Maxx store on the ground floor.
If it was in south Dublin, investors would be falling over themselves to buy it. As well as the apartments, it also includes a car park with more than 300 spaces, several large retail units, including TK Maxx, and a pretty five-storey old grain store that would make an attractive hostel or similar leisure development.
“When it first got built, we were worried someone would eventually turn it into an aparthotel and the effect this would have on the Talbot. I was actually put off by the scale of it at first. It is huge. But once I stepped inside, I saw the potential.”
The Pettitts bought it from the receiver in January, paying just over the guide price of €6.75 million. The 70 apartments were almost complete, and just needed to be floored and redecorated. Two additional huge penthouses and a large duplex have been mothballed by the Pettitts for the moment, because of their sheer size.
The rest of the apartments have been fitted out to an extremely high standard, with about €2.7 million invested in the revamp by the Pettitts. With stunning views across the bay and easy access to the bustle of Wexford, they will be offered for three-day or seven-day rental to tourists and longer-term corporate rentals to multinationals in the area.
“I don’t think there is anything like this, of this scale, anywhere else. It is smack bang in the middle of the town, right beside the main street, with a sea view out the other side. We are very excited by it.”
Pettitt started off working in the store room of one of his father’s supermarkets when he was 15. He spent the next couple of summer packing bags at the checkouts, before working his Leaving Cert year in one of the pubs. He attended school at Clongowes Wood College before taking a business degree at UCD.
“I always had a loose plan to go into the family business. I used to do functions in the hotels while I was at college, and I always kept a foot in.
“But I remember speaking to my father about it at the time, I also had to get away. It was mainly a confidence thing. I needed to get that confidence before I could go back into the business.”
He joined PwC, and trained for four years as a chartered accountant, working on the auditing of diverse clients including Larry Goodman’s meat plants, Holles Street hospital and the Irish Bank Officials Association.
“There was no great masterplan. I was just doing whatever I had to get confident at business. I was good with numbers, but I didn’t get a kick out of being an accountant. I couldn’t see how I was adding value to those businesses. It is different here.”
After a four-month stint with PwC in San Jose, he spent half of 2004 and much of 2005 travelling around central and southern America with his then girlfriend, now his wife and mother to his four children. He rejoined the family business to take over the running of the supermarkets, shortly before the decision was taken to join SuperValu in 2006, two years before he was appointed group managing director. “We could see the number of planning applications by Aldi and Lidl and we had to move. We couldn’t get the scale on our own brand offering. SuperValu was the best option for us.”
Customers in the region would have been very familiar with the Pettitt name as a retailer. SuperValu was not as strong a brand then as it is now. The move was therefore not without risk, as the supermarkets provide the bulk of group revenues. “It was a tough two-year transition. It was like jumping on to a train at full speed. Customers had trust in our brand and suddenly everything changed.”
For a group that had traded for decades under its own name, it was “strange” for the Pettitts to suddenly have a “middle man” in the form of Musgrave and SuperValu, with its different systems and product lists.
“But after two years, it was all working really well. Our fresh food availability was a lot better and we could benefit from the buying power and marketing.”
The grocery retail sector remains cut-throat. Wexford, for example, is a town of barely 20,000 souls. Yet it is served by two Pettitt SuperValus, three Aldis, a Dunnes Stores, a Lidl and a huge Tesco Extra.
“You think each year the competition is going to ease off a bit but it is actually getting even more competitive. You will see more price cuts in the market this year.”
Even so, Pettitt says the group has the structures in place to absorb another supermarket, if an opportunity came along. It is also planning to launch online shopping later this year.
Tracking market trends, the Pettitts have invested heavily in fresh foods, building an impressive bakery and fish counter at the store in nearby St Aidan’s Square. Pettitts also sell meat under the Sleeda brand, sourced from their own working farm, Sleedagh, just outside Wexford.
Pettitt spends most of his time in the supermarkets.
“I let Philip get on with running the hotels. I just stress over whether we have sold enough rooms, but it’s really him who takes care of everything in the hotels division.”
The focus for the wider group in coming years will be on consolidating its expanded operations and chipping away at its bank debts of about €30 million.
It is hard, Pettitt says, to switch off from running a family business.
“You get very emotionally involved. I’ve been trying to figure out how to balance all of this. I try not to talk too much business with my father, because he probably spoke too much about it with his father. But I’ve got that confidence, now, to run the business. And I think I’ve had it for a while.”
Name: Cormac Pettitt
Position: Managing director of the Pettitt Group
Family: Wife Ciara, kids Ruairí 8, Barry 6, Darragh 4 and Caoimhe 1.
Interests: “Socialising over a few pints with friends, running, golf and standing on the side of a pitch watching my kids playing hurling and soccer.”
Something that you would expect: “I am a food lover and very fussy about the quality of food that goes on my plate.”
Something that might surprise: “Despite my love of food, I am still the same weight as when I left school which my friends regularly slag me about.”