‘Perfect storm’ doomed Clancy’s: Owner

Hey there, time traveller!
This article was published 23/07/2012 (4798 days ago), so information in it may no longer be current.

What started out as a couple’s dream has turned into a financial nightmare for Brandon businessman and Rosser ward councillor Corey Roberts.

Roberts and his wife Betina are in the process of selling their family-owned business, the popular Clancy’s Eatery and Drinkery on Princess Avenue, in a bid to avoid financial ruin and keep the operation out of receivership.

For nearly five years since Clancy’s opened its doors in 2006, the pub’s business and customer base grew exponentially. But Roberts says one disastrous year — “a perfect storm” of problems as he called it — and subsequent financial issues have forced their hand. For a couple who made Clancy’s and its staff a large part of their lives, the loss is akin to a death in the family.

“It’s who I was. There wasn’t a thing down there that wasn’t changed or altered or made who we were,” Roberts said, during a frank and often emotional discussion with the Brandon Sun last week. “We’ve been closed for just better than a month. I go down there every day and there’s no power on. And, it’s like losing a family member for sure.”

The rise, fall and now pending sale of Clancy’s to a currently unknown party, has proven a cautionary tale for anyone venturing into the service industry.

When Roberts and his wife first purchased the building, they took out a mortgage and soon after a small-business loan from Vanguard Credit Union, for $280,000 and $200,000 respectively, according to land title records obtained by the Sun earlier this month. But the mortgage did not cover the entire cost of the land and building sale. Anxious to close the deal, the previous owners who had operated the business as Miss Q’s also took out a mortgage on the property and Roberts agreed to pay off that loan as well, as part of the sale.

A few years down the road after Clancy’s was well established, Community Futures Westman took on the second mortgage from the former owners. They also took on a few other debts from the business and worked out a financing arrangement. Land titles details a mortgage of $250,000 held by Community Futures Westman.

“Some suppliers (bills) and GST that I wanted to finance and that’s what you have there. That’s when they took over the mortgage and some other things we wanted to clean up.”

Over the years, the Roberts have poured a substantial amount of their own capital into renovations and construction, including the new patio, the custom-built bar, the Roberts Room on the second floor and “anything that needed to be painted or kept up.” There have also been some unexpected expenses. Several times the business had been flooded out during heavy rain storms, thanks to the 100-year-old plumbing that was designed for the building’s original purpose — a car dealership.

In one case three years ago while Clancy’s hosted a graduation party for Assiniboine Community College, a summer downpour at 7 p.m. in the evening overwhelmed the common sewer and rainwater piping.

“Everywhere there was plumbing there was rainwater coming out. So urinals, toilets, kitchen sinks, all this rainwater is coming back up.

So you eat (the cost) of all those suppers and you have to close down and clean up.”

And then one day, not long after spending a small fortune to fix the water problems the tiled walk-in freezer that had been constructed by the previous owners collapsed in upon itself, and destroyed the equipment inside. When it was built, Roberts says the freezer had not been protected by a moisture barrier between the insulation and the tile. And of the $20,000 it took to repair the damage, insurance only paid 10 per cent.

Even with all these problems, Clancy’s was still turning a profit — in 2010, Clancy’s grossed $1.2 million in sales. But everything started going south in early 2011 when the banks of the Assiniboine River began to swell and the city was forced to endure a one-in-300-year flood. People who could afford to spend some money on a few drinks and food before the flood, began spending less.

“No matter what people think, that the flood didn’t hurt any business in Brandon they’re sorely wrong,” Roberts said. “If it’s a matter of a business that only has a 10 per cent margin, if you have a 10 per cent drop in sales, it’s very, very hard to recover from.”

In the midst of their growing financial difficulties and the stress and distraction that go hand in hand, Roberts was hospitalized for five weeks with diabetic issues. He was out of commission for the entire month of September and only returned right around the same time the faculty strike at Brandon University began. A number of professors who had been frequent customers on Thursday and Friday nights stopped coming. At the same time, student clientele dried up as well.

“So many of them left the program worried about studying and their future,” Roberts said. “And that’s fair, but it complicated a business that’s only six blocks from the university.”

Clancy’s also lost a dispute with a restaurant supply company, Sysco Corporation and the court ordered a lien of nearly $25,000 on the property. All told, the financial burden became too much to handle. So one day in mid-June, the Roberts closed the doors and told their staff they would not be opening the next day. While the sign on the door said ‘gone on holidays,’ it was anything but relaxing. In the weeks that followed, the couple took the advice of their accountant and lawyer to look for a sale, pay off as much debt as they could, first Vanguard and then Community Futures.

At this point, Roberts does not know who has offered to purchase the business. All he knows is that the potential new owner uses the same lawyer and accountant. For legal reasons, Roberts can’t be told their identity.

Though it was his business interests in downtown Brandon that first prompted Roberts to run for office — he said he had a vested interest in making downtown work — being on council has also proven to be somewhat of a liability.

Being an elected official has forced him to be more open with the situation than he would like. While he has always seen his business affairs as a private family matter, he came forward with this information to try and clear up some of the rumours that have been going around the community.

Ultimately Clancy’s has not gone into receivership and Roberts has been told the future owners intend to continue the operation of the pub, though he can’t confirm that detail.

It’s not easy for Roberts to leave the pub, as it truly was a family affair. Both Betina and Corey’s parents have also devoted much of their own time and energy over the years to fixing up the building. Clancy’s happens to be Betina’s maiden name as well and there are plenty of family memories within the walls. But the worst part of it all, he says, is the guilt over the loss of the business and especially to their loyal staff, many of whom have dropped by the Roberts’ home over the last month to make sure they’re doing okay.

“They’re really good,” he said. “It’s the last thing in the world I ever wanted to do.”

» mgoerzen@brandonsun.com