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A Dream Job: Merlin Entertainment’s Strategy Director David Bridgford

Merlin Entertainments, the world’s second largest visitor attraction operator, is hoping over the coming 12 months to continue its impressive growth record.  

david bridgford strategy director merlin entertainmentsMerlin is continuing to pursue its stated on-going and dynamic organic growth strategy not just by continuous investment in all its existing attractions but also by opening new attractions around the world every year; developing its theme parks into short break resorts with the addition of accommodation and second gates; and looking for new partnerships and locations to extend its portfolio of unique LEGOLAND Parks. 

Strategy Director David Bridgford has played a key role in the company’s growth, as part of the senior management team.   His primary role is to identify opportunities for the company’s future growth and development, particularly with regard to acquisitions, and also to communicate Merlin Entertainment’s growth strategy internally.

We caught up with David to find out the secrets of Merlin’s success, and plans for the future.

Early career

After graduating from Durham University with a degree in Economic History, followed by spells grape picking in the South of France and selling encyclopaedias door-to-door, Bridgford trained as a Chartered Accountant at Deloitte’s.  As a partner in the firm’s corporate finance arm, with experience of the leisure sector, Bridgford was part of the team advising The Tussauds Group (TTG) on their buyout from Pearson in the late 90s.  He went on to become TTG’s Corporate Finance Director, joining Merlin Entertainments when they acquired TTG in 2007 and becoming Strategy Director in 2010.

The Eye: The start of clustering

At TTG, Bridgford was behind the acquisition of the London Eye from fellow shareholders British Airways and architects Marks Barfield.  This led to the start of ‘clustering’, the combination of multiple attractions in one location to achieve synergies, a concept which Merlin has developed significantly and is a cornerstone of the company’s strategy today.

“We felt there was commercial benefit to be gained from operating the London Eye in tandem with Madame Tussauds in London, i.e. cross ticketing, cross sharing and fertilisation of ideas, and running two businesses with one management team. However this wasn’t really possible when the London Eye was an independent entity hence our desire to own it outright.  That started the process  but it wasn’t until Merlin acquired Tussauds, bringing the London Dungeon into the mix, and then subsequently in 2008 when we were able to buy the London Aquarium that we were really able to really see the benefits –  clustering four fabulous attractions together enhancing the power of each brand.”

the london eye at night

Merlin: TTG’s natural home

Having played a key role in the sale of TTG to private equity company Dubai International Capital in 2005, and then in 2007 to Merlin, Bridgford has been quoted as saying that Merlin was TTG’s “natural home”.  He explains that this was not simply because of a complementary mix of attractions and theme parks geographically, but also due to a deeper shared ethos.

“Geographically Tussauds brought businesses in America and Asia to the Group; and expanded the strong brand portfolio.   Merlin had very strong brands in Sea Life, Dungeons and LEGOLAND, while Tussauds had Alton Towers, the Eye and Madame Tussauds.  So it was always very complementary.  Both companies had a very similar philosophy in trying to build a portfolio based on strong consumer brands, and both were looking to use these to expand our businesses overseas.

“There was also a similar attitude in terms of the way we looked at the world.  Merlin and Tussauds were slightly unusual in that they set quite some store by measuring guest feedback on a regular basis (something Merlin now sets the gold standard for), seeking staff engagement and feedback and delivering on financial KPIs.  So those three pillars of customers, staff and stakeholders were very important to both companies, as well as brand focus and delivery.

“But also on a personal level, people were at the heart of both businesses; they had a very similar ‘can do’ attitude and have always gelled well with a great love of the business and the brands.” 

chima 4d movie experience legoland

The secret of success

In 2012, Merlin yet again delivered double digit growth in revenue and profitability, taking the company past the £1 billion revenue milestone with over 54 million visitors.  Now second in scale (by visitor numbers) only to Disney, and with ambitions to become ‘the world-wide leader in branded, location based entertainment’, we asked Bridgford what the secret is to Merlin’s success. 

“I think in many ways the secret of our success is relentless focus on the business.  We set out a clear business plan in 2007 and then again in 2010 which we have achieved.   

“Our business plans are based on fairly simple rules.  We want to make sure we continue to invest in each of our existing businesses and that we continually develop new products and bring something to market every year.  This focus on our existing estate is what drives our success and enables us to generate the cash flow to be able to reinvest into the growth story.  The growth story is about making sure we identify and maintain a good balance in the portfolio.  Usually we roll out six or seven new businesses a year divided between Asia, North America and Europe, spread across the brands  – and developing the business in a steady organic way.  

grim looking lady at the london dungeons

“For new businesses the rule that we work to is that while we have a clear view as to what it might be capable of achieving longer term, up front we want to make sure that the business can break even if we only hit half of the visitor numbers that we’re expecting.”  

Merlin’s staff are also a key part of the equation.  “We have an amazing team worldwide.  We invest significantly in staff development, training and recruitment.  It’s vital for a business that’s growing as fast as we are.  We’re creating several new manager positions a year and ideally we want to fill them with internal people who know how we operate and understand The Merlin Way.”

However, above all Bridgford says there is always a priority to create “a very compelling proposition.  We live or die by whether we can deliver memorable nemesis inferno rollercoaster thorpe parkexperiences that people value, are prepared to come back for and would recommend to their friends.”

Merlin’s six growth drivers

At the heart of Merlin’s strategy are six growth drivers: 

1.    Existing estate growth via management of investment cycles driving continuous improvement in the visitor experience
2.    Leveraging of strategic synergies 
3.    Transforming theme parks to short break destinations 
4.    Roll-out new midway attractions 
5.    LEGOLAND Park developments 
6.    Strategic acquisitions

Bridgford explains, “The Merlin strategy hasn’t really changed since 1999 when it was first set down by Nick Varney.  It’s about developing a portfolio of strong brands and trying to make the business less volatile over time.  We do that by appealing to a wide demographic, and expanding our geographic footprint beyond the historic base of the UK and Northern Europe by gradually moving into North America and Asia Pacific.  

Part of Bridgford’s role is to communicate the strategy internally.  He says, “The first and most important growth driver is the use of capex cycles to invest in our existing estate to drive like-for-like growth.  Off the back of that we have the ability to generate cash flow which enables us to invest in new midways, and then also to move our theme parks from daily theme parks to short break destination resorts by adding themed accommodation and second gate attractions.

“We also get synergies from the scale that we have.  The ‘clustering’ strategy may have started in London but now we have successful clusters of attractions in 14 cities around the world like Berlin, Shanghai and Dallas.  Where we’ve got a strong concentration of assets we’re also able to offer new products/create new revenue streams like the Merlin Annual Pass, which offers superb value to our guests but also has benefits to us in terms of cash flow.  MAP is now available in the UK, Germany and the USA.

“Then fifthly we have the desire to roll out more LEGOLAND parks – while also turning each of them into short stay resorts.   Over the last 12-18 months alone for example we have added or announced hotels at LEGOLAND Windsor, LEGOLAND California and LEGOLAND Malaysia; and Water Parks in LEGOLAND Florida and LEGOLAND Malaysia.  New Parks however are much larger scale investments and therefore we can’t roll them out at the same pace that we can with the midway developments, but we’re looking to try to open a new LEGOLAND park every three to four years.  There are many opportunities in Asia but also in North America as well so that’s very exciting.”

madagascar live show atchessington world of adventures

Strategic acquisitions

The sixth growth driver is strategic acquisitions which are Bridgford’s direct responsibility.   With such phenomenal organic growth what do acquisitions add?  Bridgford says, “We’ve always got a big focus on our existing estate which means that most of our growth comes from proper organic growth, which includes the midway rollout.  But the strategic acquisition stuff is really about trying to help give us the footprint and anything that helps to accelerate the other five growth drivers.

“We were able to buy Sydney Attractions Group and that enabled us to support the second growth driver because we’ve subsequently been able to add a Madame Tussauds in Sydney and we’re looking at what other attractions we can now build off the back of the businesses that we’ve now got.  

“The acquisition of Living & Leisure Australia gave us a much stronger foothold in Asia with aquariums in South Korea, Thailand and China for the first time.  In Bangkok we’re able to cluster the aquarium with a Madame Tussauds and that’s yielding benefits.  Similarly in China we bought the aquarium in Shanghai and we already had a Madame Tussauds business in Shanghai so again that brought an immediate cluster.”

At Merlin’s 2013 conference in March, Bridgford gave presentations on “The Competitive Landscape” and “Our Readiness for Battle”.  So where does he see future growth for Merlin?  

“We sit in a very strong sector and the long term trends in people’s leisure time and consumer spend continue to see more out-of-home leisure.  We’re gradually expanding into Asia, where there are enormous opportunities, and we’re only just starting in North America.  There’s a long way to go!”

clutch powers lego 4d movie

Too corporate?

Merlin has had a meteoric expansion worldwide but maintains a relatively small head office with low central costs alongside semi-autonomous attractions.  Mark Fisher, Merlin’s Chief Development Officer has said that his, “biggest fear for Merlin is that we become too ‘corporate’”.  Can the current structure continue if it continues to grow at the same pace?  

Bridgford says, “One of Merlin’s great strengths is a great spirit of entrepreneurial dynamism.  Because we focus on developing our brands as individual consumer brands, we want to have as many decisions as possible taken as close to the customer as possible; the people who are at Alton Towers understand best what visitors to Alton Towers want and deserve for example.  So we do try to manage the business as autonomously as possible within a very clear overall strategy and culture. We also try to make sure that where there are clear synergistic benefits that we take full advantage of those.  

“We’re certainly not looking to change the culture of the organisation.  I think one of the things that we’ll have to work quite hard on is the issue of as you get bigger how you retain dynamism and flair?  

“We don’t really have a big company mentality so I don’t think you’ll ever be seeing big head offices, or a huge central team.  We will always need to be out there in front of our 54 million visitors because that’s where our business is done.”

stealth rollercoaster thorpe park

A dream job?

It is difficult to name another company with Merlin’s rate of growth and acquisitive nature in today’s economic climate.  For someone from a corporate finance background, working for Merlin must offer unique and exciting challenges on a daily basis.  

Bridgford agrees, “Well it is absolutely a dream job.  It’s very interesting – and I work with a fantastic team of colleagues.  There are an enormous number of potential opportunities out there and we’ve really only just started to scratch the surface.  It’s very nice to get the chance to go and visit amazing cities like Sydney and Melbourne and Shanghai, and when we get the chance to buy businesses we get very excited about the prospect of bringing more businesses and people into the Merlin family.”  

All images kind courtesy Merlin Entertainments

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