Magazine article Marketing

Rank Finds Leisure Hard Work

Magazine article Marketing

Rank Finds Leisure Hard Work

Article excerpt

What do Butlins, Mecca, and the local Odeon cinema have in common? They're all brands owned by the Rank leisure group. And as Robert Gray reports, they're all undergoing long-overdue facelifts

A recent survey of City analysts voted Rank one of the UK companies most vulnerable to takeover in 1999. The company is seeking a new chief executive following the resignation last autumn of Andrew Teare after a dismal set of financial results; third quarter profits had slumped 20% to [pounds]11m. Management consultant Bain & Co has been drafted in for a strategic review.

Rank has a classic marketing problem. It is a leisure group in an age when the public is supposed to be spending more time and money than ever on leisure. Yet its brands are widely seen as old-fashioned. Over the past four years Rank has invested [pounds]2bn in its businesses. Despite this, many of its key brands are struggling.

"People hoped to see the big investment start to come through in profits during 1998, but it hasn't," says Jane Anscombe, leisure analyst at Henderson Crosthwaite. "There is a view that something needs to happen. That could be a new chief executive working the businesses harder. Or it could be a bid, or a break-up."

Old brands, new ideas

Shareholders are certainly looking for improved financial performance. The key may well be the marketing of Rank's established brands.

Rank owns such famous names as Odeon cinemas, Mecca Bingo clubs, the Hard Rock Cafe restaurant chain, Tom Cobleigh pubs and holiday businesses Butlins, Haven, Oasis and Warner. Rank also has interests in casinos, movie production, video duplication and a 50% stake in the Universal Studios theme park, Florida.

But when consumers and the City think about cutting-edge leisure brands, Butlins, bingo, and even the Odeon cinema chain are low on the pecking order. Rank's leisure brands are seen by many as tired, or worse still, downmarket. Teare realised this and oversaw efforts by a range of Rank's businesses to rejuvenate themselves.

Financial performance in 1997

Brand                  Turnover         Profits

Deluxe             [pounds]626m     [pounds]88m
Hard Rock Cafe     [pounds]235m     [pounds]47m
Holidays           [pounds]509m     [pounds]72m
Leisure            [pounds]639m     [pounds]107m
Universal          [pounds]112m     [pounds]25m



"There has been a revitalisation of brands in the group," says Rank director of group PR Sue Donovan. Perhaps one of the most successful transformations has been at Odeon cinemas.

"Odeon, for one, was somewhat tired," admits Donovan. In the face of competition from the likes of Virgin Cinemas and US-style multiplexes its old Art Deco design and red Odeon name was seen to belong to another age.

Corporate identity specialist Wolff Olins was brought in to transform Odeon, which has 460 screens and a 23% market share, into a cinema chain with greater contemporary appeal.

The change has been effective. Out has gone the old red Odeon logo, in is a new silver-blue name with new interiors and design inside theatres, better seats, improved facilities such as cinema bars, and trendy staff uniforms.

A glitzy in-cinema trailer from Ridley Scott Associates and Europe's first web site for cinema ticket credit card booking were introduced.

These changes were supported by Odeon's first advertising campaign in 67 years to promote the 'Odeon experience'.

"We must evolve the brand values so that they are contemporary and relate to today's cinema audience," says Ross James, Odeon marketing director. …

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