The long battle for control of the grand, august and very British Savoy hotel ended yesterday in a truce with the Forte Group led by the heirs of an Italian immigrant.
Built with the profits from Gilbert and Sullivan operettas, The Savoy is a luxury hotel of Edwardian elegance at the turn of the wrong century. In an age of cost-conscious accountants, The Savoy provides services as if their guests were landed gentry, royalty, or perhaps their mistresses.
But The Savoy never worried much about costs or profits. And in the past few years it has wobbled between small profits and big losses.
Led by Rocco Forte, chief executive officer of the Forte Group, the Savoy board met yesterday to try to bring the hotel into the 20th century before it's over.
Mr. Forte and his father, Lord Charles Forte (ennobled during the Thatcher years), have sought control of The Savoy since 1981. They own about 68 percent of the stock, but only 42 percent of the voting rights in a complicated two-tier stock structure. They put something like $60 million into Savoy stock and, analysts say, they've been getting a return of less than 2 percent.
The Fortes are said to have had an obsessive and perhaps sentimental interest in owning The Savoy. Grandpapa Rocco Forte, who emigrated from Italy, started out with a coffee shop called the Savoy Cafe. And Lord Forte proposed to his wife Irene, Rocco's mother, in the Savoy Restaurant. They spent part of their honeymoon there.
The Forte Group, which produces around $300 million in profits bbTC year now, grew out of a milk bar Lord Forte started on Regent Street. The group now owns about 2,000 restaurants and some 860 hotels, including Travelodge in the United States and such splendidly posh hostelries as the Hyde Park in London, the Plaza Athenee in New York and the George V in Paris. But the group is still considered declasse, an upscale word that means downmarket, because it runs highway stops called Little Chef and Welcome Break.
There's been more than a hint of snobbery, elitism and British chauvinism in the long battle for control of The Savoy.
The Fortes recently drove a wedge between board members who represent educational and charitable trusts and forced Giles Shepard, the impeccably tailored manager of the hotel and their most ardent adversary, to resign on the eve of the board meeting.
On Tuesday, the board picked a new chairman, Sir Ewen Fergusson, who has been Britain's ambassador in Paris. He is now chairman of Coutts & Co., bankers to the very rich and the very discreet, and is also a director of British Telecom.
Rocco Forte, a member of the Savoy board since an earlier peace treaty, will be part of a new Chairman's Committee that "will work closely with the new managing director."
In exchange, the Fortes renounced any further interest in the shares held by the Savoy trusts.
Mr. Shepard's departure was not universally applauded. He's said to have the "magic cocktail of unction and disdain" needed to maintain the majestic and slightly mystic quality of a hotel like the Savoy.
At The Savoy he ran, the doorman greets you in gray livery, silk topper and white gloves. Six hundred "servants" attend 250 rooms. More than $435,000 worth of wine was once sold off because Mr. Shepard felt it didn't quite meet the standards of his guests.
The Savoy retains the aura of the place where Winston Churchill used to like to eat and drink with his buddies, where Edward VII gave private dinners, where the forecourt was once transformed into a water-filled replica of Venice and Enrico Caruso sang gondolier songs.
The Queen Mother loves The Savoy. Prince Edward opened the Fitness Gallery last June. The suites overlooking the Thames River have attracted movie stars from Clark Gable to Meryl Streep.
But the customer has changed over the last 25 years, said one candidate for Mr. Shepard's job.
"We assist our guests with meaningful services," Ramon Parajes, general manager of the Four Seasons hotel in London, told the Evening Standard, "rather than indulging them with wasteful and meaningless luxuries."