Reputation is everything when it comes to running a successful business, according to Sacha Lord-Marchionne and Sam Kandel, founders of the Warehouse Project (WHP), a series of club nights featuring DJs from all over the world, which was launched back in 2006.
The pair have a number of business interests, but they will always be most well known for the WHP, which over the years has seen more than half a million pass through its doors.
They decided to launch the WHP after working together at Manchester club Sankeys, which was at the time part-owned by Lord-Marchionne.
Lord-Marchionne, who originally got involved in the nightclub business after holding an event in the legendary Hacienda for a "bit of pocket money", says they were able to launch the WHP easily enough because they used the same suppliers they used while at Sankeys. He adds that they had a good reputation because they always pay suppliers straight away.
“We don’t borrow any money; we don’t owe anyone anything and the second we get an invoice we pay it immediately, which suppliers love.”
Lord -Marchionne believes that one of the main reasons for their success is because of the unique partnership they have. He looks after the logistics and production side of things, while Kandel is responsible for booking the artists.
He says he’s not clued up musically and admits he “doesn’t know his house from his techno”.
However, Kandel is passionate about music and the artists and he says a big part of their success is down to the fact that they both have different skill sets.
“I totally trust Sacha and I know that he knows what he is doing when it comes to licensing and logistics and he totally trusts me to book the artists,” he adds.
The first WHP took place in 2006 and cost £27,000. Although they would not reveal how much they turned over on their first night, they say that they made a profit. Around 100,000 people walked through the doors during the 12-week period. The average ticket cost around £15, so this gives us an indicator of the sums involved.
The WHP is a nomadic, temporary concept that is a result of Lord-Marchionne’s experience in running Sankeys. He says that it was really busy during term time when students descended on the city, but was really quiet when they all went home during the summer months.
So when he sold Sankeys, he teamed up with Kandel and they decided to launch the WHP and run it from the end of September through to New Year's Day, or the golden period as they like to call it.
The first WHP took place at Boddington’s Brewery and had a capacity of 1,800. The WHP then moved to an underground car park beneath Piccadilly train station, otherwise known as Store Street. This was its home for five years and sticking with the theme of “keeping things fresh”, the WHP now has a new home.
Thousands of clubbing fans will head to the WHP’s new location over the next three months, Trafford’s Victoria Park warehouse.
The builders have been preparing the site, which will have three main rooms, for the last 18 months.
Kandel has booked a range of artists for the 12-week residency including The Chemical Brothers, Fatboy Slim, Annie Mac and Carl Cox.
The capacity for the venue is 5,000 and, with most events looking almost certain to sell out, this means around 120,000 people will pass through the doors during the three-month period and each will pay an average of £25. So ticket revenues alone will be about £3 million and then of course there is the revenue from drinks.
The WHP does not sell its bars to a third party and Kandel says that this helps them to keep costs down, which they then pass on to the customer.
Kandel and Lord-Marchionne explain that value for money is an important part of their ethos and this is one of the reasons why they ended up with their own security company.
"One of the benefits of having our own security is it then costs us less to provide security at our events and we do all our own bars, so every festival or event we do we run the bars; we don’t sell the bars on to a third party. By keeping all that money in the event we can create better value for money for the customer,” Kandel adds.
The security firm, known as Primary Security, wasn't just born out of a desire to save cash though, as Lord-Marchionne says that they were never really happy with the quality and consistency of the security being supplied and so decided to go in-house in 2009.
"We never intended to start a door firm, we just intended to employ our own 25 guys but from that other operators saw how we were operating and it sort of organically escalated from there," he says.
So how much is the WHP worth?
Lord-Marchionne and Kandel refused to talk balance sheets, but they did say that people don’t realise how many outgoings they actually have.
Since the WHP originally launched back in 2006, approximately half a million have attended, paying an average of £20 a ticket.
"This, combined with the drinks, makes people think we are raking in it, but if they knew how much it actually costs, every single night, the line-up in itself runs into tens of thousands of pounds,” Lord-Marchionne adds.
He also says that they have put loss leaders on in the past in order to build hype and get people talking about the WHP.
"The average cost of putting on a night varies massively. Our profit is probably the final ten per cent," the entrepreneur says.
Lord-Marchionne and Kandel have diversified over the years and following on from the WHP and Primary Security, they also run or have interests in a number of festivals.
The entrepreneurs run Parklife, a Manchester-based festival that they started three years ago with a capacity of 15,000. This year it had a capacity of 35,000 per day, or 70,000 across the weekend, and they want to extend this to 40,000 next year.
Lord-Marchionne says that they also own part of Kendal Calling, a family-friendly festival that takes place in the Lake District and they have a new one called Festival Number 6, which is a three-day event in Wales.
The pair have also expanded overseas. They now have a festival called Hideout in Croatia, which was only established in 2011 with a capacity of 3,800. However, this year 10,000 people attended, so it almost tripled its capacity within the space of 12 months.
Kandel explains, "Croatia is emerging as a big new destination. We've had numerous offers for us to go and do something in Ibiza but it's never felt right. Croatia feels new and exciting and hopefully we will be doing more over there."
Lord-Marchionne and Kendal also have involvement with shows at Jodrell Bank, which this year featured Elbow.
Paul Weller was meant to perform too but the concert had to be cancelled due to adverse weather conditions, something which reiterated the importance of insurance for anyone holding an event.
So what’s next?
Lord-Marchionne and Kandel could soon have a presence in the US, as they are currently in talks about a few projects.
They are also in the process of buying into a ticketing company.
"Ticket companies have done quite well out of us over the last few years so it makes sense for us to own or have an interest in a ticketing company, so that’s going through at the moment.
“We are buying a stake in a pre-existing company. We’ve never bought into a company before, so this is new for us,” Lord-Marchionne states.
By Kirsty Hewitt