Will Public Hospitality Survive 2024 in One Piece?

As recently as last year, Jon Adgemis’s Sydney-centric Public Hospitality group was consistently described as rapidly growing. Burgeoning. Ever-expanding. Ballooning. However you want to say it, the empire was getting big, fast. But that growth has stalled, and there’s been much speculation over the future of the group. So after an aspirational run of hospitality and hotel acquisitions, what does the rest of 2024 hold?

The group’s portfolio is an eclectic one. There’s the Oxford Street demi-precinct with El Primo Sanchez , Oxford House and Busby’s ; the casual Ricos Tacos and Derrel’s ; classic pubs The Lady Hampshire , The Federal and Camelia Grove ; plus a few boutique stays. In June 2022, Public bought Noah's Backpackers in Bondi for $68 million. Like Justin Hemmes and Merivale, buying properties, rather than leasing them, has been an essential tenet of the Public Hospitality playbook since the the company was formed in 2021.

Many of these venues have big-name talents on board: Toby Wilson at Ricos and Brendy King at Derrel’s, to pick two examples. Automata’s Clayton Wells was the creative culinary director, but quietly exited last week.

The cracks started showing in May last year, when the Australian Financial Review published an explosive article detailing the extent of Public’s debt. It came just a few months after Public acquired the group behind Maybe Sammy , Sydney’s internationally renowned cocktail bar.

But, despite the dark forecast, the group continued to grow and draw high-profile talent. Wells was brought on shortly after. And in August, Adgemis acquired his first Melbourne venue, Puttanesca , in partnership with star chef Guy Grossi.

The same month, al pastor king Wilson announced the relocation of his Chippo taqueria , Ricos Tacos, to Public’s revamped Norfolk Hotel, less than a kilometre up the road. And Annandale’s Federal was due to open last November , with dining rooms for both Maybe Frank and Fabbrica.

Meanwhile, the AFR ’s coverage continued, with reports on a $450 million debt-refinancing mission and plans to carve up the group.

Then came the big crack: Love Tilly Group announced the end of its partnership with Public , walking away from its Catalan-inspired wine bar La Salut – sold to Public in 2022 – at The Norfolk, and closing doors on its Fabbrica pop-up in Public’s Exchange Hotel. Plans for the Annandale Fabbrica were canned. In a statement, Love Tilly Group director Matt Swieboda said, “For the benefit of the staff and the suppliers, we can no longer, in good faith, continue to run our venues together with Public Hospitality.”

But the openings marched on. In the same week, record-spinning wine bar Busby’s took over the ground-floor space at Oxford House, and Anglo-Indian diner Derrel’s set up shop next door to The Lady Hampshire on Parramatta Road.

More celeb chefs joined the fold too, and Adgemis tripped to Victoria. In January 2024, Karen Martini signed on as culinary director of St Kilda’s St George Hotel, and George Calombaris jumped aboard to lead harbourside Greek stalwart Alpha back in Sydney. And in March, drinks captain Matt Whiley announced that his pioneering zero-waste bar Re would move into the old La Salut space.

But, by April, Adgemis’s “high-wire act” was coming unstuck. There had been disputes over his family estate, a failed $500 million refinancing deal with Bain Capital – one of the group’s many financial backers – and staff claiming they weren’t being paid super.

Smaller lenders became uneasy about their returns. Millbrook Group tried to sell Manor House, Public’s Darlinghurst hotel; Australia Pacific Mortgage Fund took control of El Primo Sanchez; and another small fund took control of Erskineville’s Kurrajong Hotel. Larger lenders are working to keep assets within the one pool. In May, Adgemis was allegedly raided by the ATO.

Last week, Deutsche Bank joined the party, striking a $400 million refinancing deal. While the German bank has surely provided a welcome breather to Public Hospitality, it hasn’t covered the full extent of the group’s debt.

Wells’s exit leaves the dining direction without a captain – Broadsheet has reached out for comment. Whiley’s Re was due to open in Redfern on May 14 , but the project’s been stalled, with the team citing construction delays. Noah's Backpackers is also yet to reopen.

Will Public Hospitality survive 2024 in one piece? It’s hard to say, but right now the outlook is far from rosy.

Additional reporting by Dan Cunningham.