One of Australia’s biggest hospitality companies, Keystone Group, is selling the business it all started with, Cargo Bar, at Sydney’s King Street Wharf.
The company says that after a strategic review of its assets, it has decided to sell Cargo Bar in a move that sees the business increasingly shift to more food-focused ventures.
Keystone was launched just before the 2000 Olympics when Fraser Short and John Duncan opened Cargo Bar as its first venue. Short departed Keystone in 2011 (he now runs a string of pubs, including The Morrison), bought out by Duncan, who remains managing director.
The business owns the Kings Cross pub Sugarmill, plus Kit & Kaboodle upstairs, and the wine bar Gazebo, as well as Manly Wine, and The Winery in Surry Hills. In 2014, it took on a more restaurant focus when Duncan launched a takeover of the publicly owned Pacific Restaurant Group, bringing Kingsleys restaurants in Sydney and Brisbane, the Chophouse in Sydney and Jamie’s Italian franchises, now in five capital cities, into the fold.
Keystone currently has around 20 venues under its control and last month sold the Newtown Hotel to the Colonial Leisure Group following an unsolicited offer late last year.
“The sale will allow us to continue to focus on building and expanding our core brands across our bar and restaurant portfolio,” John Duncan said in announcing the deal four weeks ago.
Keystone’s executive chairman, Richard Facioni said the board concluded following the strategic review that it was the right time to free up the capital invested on the King Street Wharf precinct to focus on what it now regards as core business; wine bar and restaurant brands.
“The group is being presented with a number of exciting opportunities across the country, including Melbourne where we currently have no presence. The sale of Cargo would allow us to accelerate some of those growth plans,” he said.
“The sale of Newtown showed us there is currently a strong market for well-performing, iconic venues. We have also received recent approaches, both formally and informally, in relation to Cargo, so the board decided now would be an opportune time to explore a sale of the business.”
Keystone is retaining its other nearby bar, Bungalow 8, but the move comes as Sydney’s lockout laws continue to bite in the industry.
Cargo Bar was long regarded as a late night party venue, but finds itself in a pincher movement, with The Star casino directly across the water, excluded from the lockout laws and Barangaroo, next door, also excluded from the 1.30am lockout and 3am closing times.
The laws may have played a part in Keystone’s decision, with Duncan admitting to Business Insider two years ago that they’d had an impact on Keystone, adding that the company was focused on being a part of the Barangaroo development.
Ray White is handling the sale of Cargo Bar & Lounge via expressions of interest.
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