The development marks the largest single investment to date from the private equity group which founded bar concept Pitcher & Piano and last year invested in cocktail bar operator Be At One. Piper, which made the investment from its £107m Piper V fund, is also an investor in Latin casual dining chain Las Iguanas.
Loungers, founded by Alex Reilley, Jake Bishop and Dave Reid in 2002, currently operates 22 sites across the UK after opening the first Lounge in Bristol. Of the venues, 19 are under the Lounge brand each with a unique name and design, while another three sites are operated under the Cosy Club brand which is focused on less urban environments.
Alex Reilley
Last month Alex Reilley, managing director of Loungers, told BigHospitality the company remained on track to open no fewer than eight new sites a year from now on. The business now plans to carry on with expansion at this rate with the aim of having 70 sites in the UK in the next five years.
Speaking after the announcement of the backing from Piper, Reilley said the private equity firm was on board with those growth plans and the ethos of the company.
"We see Piper as a great cultural fit for us and very much like the company's desire to understand our brand and customers and the driving forces behind our success, as well as its obvious commitment to work with us as partners who can add significant value to our business. We are all now focused on scaling the business and ensuring we build an outstanding business and brand legend," Reilley said.
Reilley earlier told BigHospitality he saw the company growth dominated by the Lounges brand with the focus on developing multi-site locations in towns and cities in the south-east such as Brighton.
The business opened two venues in Bournemouth this year and are on site in Hove and Birmingham with further openings planned in Hove, Cardiff, Salisbury and Exeter. Reilley also hopes to expand to areas without a strong presence for the brand, such as the north-west.
'Pub of the future'
The investment was led by George Adams and Peter Kemp-Welch; the latter will now join the Board of Loungers. "Our research shows that there are hundreds more sites to go for and we believe the Lounges provide a completely new alternative for customers and have the potential to be the 'pub of the future'," Kemp-Welch said.
In October last year Piper invested £8m in cocktail bar business Be At One and announced the backing would enable the company to expand at a faster rate. Be At One now aims to open more sites, predominantly in London, with a target of 30 sites by the end of 2016.
Reilley, who was named Rising Star in the recent Retailer's Retailer of the Year Awards, has said some businesses remain unable to grow estates because of being over-leveraged and having to service debt. Last year Loungers switched banks from RBS to Santander in order to provide the business with more consistency and certainty.