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LB’s Record Bar on Meyers Place has a retro feel, with records lining the walls and bright orange sofas.
It’s 6pm on a Thursday and there’s a DJ playing and a large silver disco ball splintering light around the space.
The bar is busy with an after-work crowd, but most patrons are unaware that it’s the first venue in Melbourne to be opened by Justin Hemmes, the Sydney hospitality king who heads up the $3 billion Merivale empire.
“I just like the vibe,” one woman says to me as she sips on a martini that has been whizzed in a milkshake maker to give it a lighter taste.
“They’ve kept it very quiet that it’s Merivale,” another says.
Keeping things “quiet” is a rare tactical move for a company that built its brand on loud avant-garde spectacle. Merivale was started by Hemmes’ parents, Merivale and John, who brought Swinging ’60s fashion to Australia, with the House of Merivale widely credited with introducing the miniskirt to the country.
Hemmes has grown the business by expanding into hospitality and property. It has more than 80 venues across Sydney.
Now his sights are set on Melbourne, but the city hasn’t opened its arms to the perma-tanned blond billionaire in the same way.
Hemmes has been on a Melbourne spending spree over the past five years, buying Tomasetti House on Flinders Lane for about $40 million in 2021, Kantay House in Meyers Place for about $15 million in 2023 and most recently the City of Melbourne’s Parkade car park in Bourke Street for $55 million in 2025.
His plans for all these sites have been beset by delays and setbacks.
Hemmes declined all requests for an interview and has refused to talk to this masthead after it published investigations revealing claims that Merivale underpaid staff, exploited women, encouraged them to have sex with customers, perpetuated sexual harassment and facilitated frequent drug use.
Merivale denied the allegations and accused The Age and The Sydney Morning Herald of harassment.
One Merivale insider, who did not want to be identified because of the consequences for her career, said Hemmes was somewhat bewildered by the difficulty he is facing opening venues in Melbourne, with LB’s the city’s only operational Merivale venue despite an outlay of $110 million in the city on property alone.
Hemmes’ first move into the Melbourne market came during COVID lockdowns in 2020, when Merivale announced it would bring a takeaway meal service to Melbourne, Merivale at Home.
Refrigerated meal boxes would be prepared in Sydney and delivered to Melbourne for customers to finish off at home.
The backlash from local hospitality operators stuck in lockdown was swift, with one bar manager telling media it was “at best tone-deaf”.
Merivale released a statement saying that “in solidarity” it would hold off entering the Melbourne market until venues were back open and trading.
Tomasetti House: Slow going, big bills
Hemmes bought the heritage-listed Tomasetti House in Melbourne’s most bustling restaurant strip five years ago.
Nepal-born rich lister Shesh Ghale, founder of the Melbourne Institute of Technology, is a previous owner of Tomasetti House, which he bought for $12 million in 2007 and sold for $16 million in 2014 to the Millett family.
Ghale says he regrets ever selling Tomasetti House, as it is a beautiful building with high ceilings and thick bluestone walls, but he believes Hemmes overpaid.
“When it came up on the market, I thought I should buy it again, but the expected price was so high,” he says. “That was in the hype of the market.”
Ghale says Tomasetti House, like many buildings of its era, has timber floors that need to be replaced at considerable cost.
Hemmes initially planned to open a multi-level venue there, featuring a Chinese restaurant similar to his Sydney business Mr Wong, by 2023, but the building is running three years behind schedule and is still a construction site.
Hemmes replaced the builders contracted to the job, with work coming to a standstill until a new crew were brought on.
In October last year, Hemmes posted a “first look” video of himself touring the site, noting “all good things take time”.
Holding a “Slow” sign outside the building, Hemmes tells the camera it “quite appropriately describes the speed we are doing this development at”.
The interior of the historic building, which initially operated as a flour mill and dates back to 1853, has been gutted.
Hemmes’ video shows exposed brick walls and electrical cords dangling from the ceiling.
“We are going to bring this puppy back to life,” he says, noting that the entire building had to be propped up using new concrete-encased steel columns.
Hemmes’ current plan is for a cocktail bar in the basement, a Chinese restaurant on the ground, first and second floors, and “a really cool rooftop bar experience”.
On his carefully curated social media feed, prominent Melburnians jumped on to express their excitement.
Influencer Bec Judd posted “cannot wait”, while chef Shane Delia said: “Looks good mate. Will be good to have you in the neighbourhood.” Catering king Bruce Keebaugh enthused: “Amazing – Melbourne can’t wait to greet you and see the Merivale Magic! If you need anything we are all here to support you.”
Hemmes signed up one of Hong Kong’s top chefs, Jowett Yu, who previously helmed Mr Wong in Sydney, to lead the restaurant.
The chef relocated with his family from Hong Kong but with construction yet to finish on Tomasetti House, he has been spending most of his time refining menus and working on other projects for Hemmes.
“It’s been kind of frustrating at times. I’d like to get in there and cook already,” Yu says. “Now we are starting to see the light at the end of the tunnel.”
Yu says Tomasetti House should open by the end of the year, and he has been creating dishes for the menu and then running them by Hemmes.
“He is pretty hands-on, tinkering with lighting, music volume and tables,” Yu says. “He also knows a lot about buildings in terms of extraction and structural loads.”
That knowledge is coming in handy, with the Herald Sun reporting it will cost Hemmes more than $100 million to complete Tomasetti House once the purchase price, stamp duty, legal fees, architectural design and fitout are factored in.
This week, Tomasetti House remains a construction site with hoardings over the windows and doors and builders at work inside.
A helicopter, a hotel and a 90-minute deal
A month after buying Tomasetti House, Hemmes snapped up Surf Coast pub the Lorne Hotel for $38 million.
Publican Paul Upham and his family owned and operated the pub on the Great Ocean Road for more than a decade until a broker for Hemmes got in touch.
“We weren’t looking to sell, but we said we were happy for him to come and have a look,” says Upham, who has gone on to operate Geelong venues Sawyers Arms Tavern, Two Noble, Eileen’s Charcoal Grill and Gold Diggers Arms.
Hemmes had never been to Lorne before and flew in by helicopter, spending an hour and a half at the pub.
“The next day they put forward an offer,” Upham says. “He likes pubs on the water; that was probably the key thing he was looking at. He loved the location and the town, the feel of it.”
According to local legend, when Hemmes first flew in, he assumed the pub was the Grand Pacific Hotel, a historic three-storey building overlooking the pier – but another rich lister, Josh Rudd, owner of surf brand Ghanda, had already snapped that up.
Hemmes was instead there to buy the more unassuming Lorne Hotel, tucked in behind the town’s surf club and harder to see from the sky.
When told this tale in 2023, Hemmes laughed and said it wasn’t quite what happened but there was a grain of truth to it.
“To be honest, I’d never been there before,” he said.
Upham was surprised by the speed of the transaction but says because of the size of Merivale’s operations, Hemmes was easily able to look at the pub’s alcohol sales and take into account the rebates he gets on wine and beer, ensuring the deal was advantageous for him.
“He’s got an unbelievable eye for looking at the interiors of venues,” Upham says. “I have never seen anyone as good at marketing a venue, and he has that following that people love. You walk into any of his venues and you are just amazed by what he has been able to do. They are all very unique.“
The pub also came with a lucrative licence for 10 poker machines, which Hemmes downplayed when he bought it. “I wouldn’t say [they are] a big money spinner, but they are part of the original pub,” he said.
In reality, the pokie machines provide a steady diversified income stream for Merivale.
Across its pub business, Merivale owns at least 500 poker machine licences, which in 2023 brought in $55 million. In 2025, Merivale made $671,000 from the pokies at Lorne alone.
In NSW, Hemmes is one of the largest individual gambling machine operators in the state.
After buying the pub, Hemmes told this masthead he planned to work level by level through the building renovating it.
“It’s a big job, a beautiful, grand old dame, and we want to bring her back to her former glory,” he said.
However, Hemmes has not progressed beyond turning what was an outpost of MoVida on the ground floor into Totti’s, Merivale’s Italian restaurant brand.
The restaurant has a 1970s ski chalet vibe with cork floors, orange booth seating and macramé wall hangings.
Age restaurant critic Besha Rodell says Totti’s is typical of a Merivale venue in its combination of being “bombastic but also quite safe” with its menu of wood-fired bread served inflated and charred straight from the oven and creamy vodka pasta.
Rodell says the dishes at Merivale restaurants these days don’t often stand out but what stays with you is the scene and the feeling of “seeing and being seen”.
“The food is engineered to appeal to as many people as possible,” she says. “It’s pretty impressive in terms of the size of those venues and the consistency of the product, that’s not an easy thing to do.”
Hemmes did a deal with Rudd for the Grand Pacific Hotel to serve as accommodation for Merivale’s employees in Lorne, and five years on, the rest of the Lorne Hotel remains largely unchanged.
High steaks in laneway
Hemmes’ next major Melbourne purchase was Kantay House in Meyers Place, one of the city’s best known laneways, which housed cocktail bar Lily Black’s, Italian restaurant Pizza Pizza and Argentinian steak restaurant San Telmo.
Hemmes converted Lily Black’s into LB Records, which he opened in November last year, but is hamstrung when it comes to further developments at Kantay House because the venues are in long-term leases.
Jason and Renee McConnell, the owners of San Telmo, say they have no plans to leave before their lease expires in six years.
In its 15 years of operation, the restaurant has become a city stalwart with tall studded leather booths, walls hung with cow hides and an open kitchen where chefs cook over a flaming parilla.
“I’ve spoken to Justin a couple of times – he wanted us to leave, obviously – and I said, ‘I’m not going anywhere,’” McConnell says. “We said it would be a large sum for him to pay us out and move us.”
McConnell says LB’s opening has brought some welcome additional life to Meyers Place and San Telmo is still doing well, but the uncertainty around Kantay House’s future is frustrating.
Renee McConnell says there is clearly some anti-Sydney sentiment at work.
“There is a feeling of takeover that Melburnians don’t like,” she says. “He wants to do the Establishment-style block, where he takes out a city block, and Melbourne is the more intimate, hard-to-find like San Telmo.”
However, the pair say LB’s has shown that Melburnians will go to a Merivale venue and note it was clever of Hemmes to team up with local bar veterans Michael and Zara Madrusan to give the venue “a little bit of Melbourne cred”.
It’s a method Hemmes has used successfully in the past, teaming up with talented chefs like Dan Hong and Danielle Alvarez in Sydney to give Merivale street cred.
The partnership is mutually beneficial, with Merivale giving the Madrusans a much-needed cash injection after the couple’s award-winning Everleigh cocktail bar on Gertrude Street in Fitzroy and sibling venue Bar Margaux in a basement in the CBD went into liquidation last year.
The Madrusans declined to comment.
McConnell says LB’s is drawing a new demographic to the laneway, but some Melbourne hospitality staff may be concerned about working for Hemmes.
“There is a feeling of mistrust that comes to mind, the mistrust of what is alleged to have been going on in these private rooms at the Establishment,” she says. “In hospitality, the younger crew are concerned about workplace safety.“
Fighting the Melbourne Club
Hemmes’ biggest investment in Melbourne is the eight-storey Parkade car park at 34-60 Little Collins Street, which he controversially bought from the City of Melbourne to build a precinct with restaurants, cafes, bars, a hotel, retail and a “sky garden”.
Some councillors complained Hemmes had got the car park “for a song”. Councillors Owen Guest, Gladys Liu and Philip Le Liu voted against the sale.
The sale also drew the ire of the Melbourne Club. Hemmes’ proposed development is set to overlook the exclusive private garden of Melbourne’s oldest men-only club.
Members of the club are forbidden from talking to the media, including for this story. One property insider with knowledge of the sale process says Hemmes met the club before the sale.
Hemmes allegedly told the Melbourne Club his plans for the car park were not concrete, and he said he would meet members and the club and walk them through any plans as a first step.
“He thought I’ll just schmooze these blokes over,” the property insider says. “I don’t think he knew how the Melbourne Club operates. It’s silly to come to Melbourne without understanding the native flora and fauna.”
Club members were shocked to find designs for Hemmes’ sky garden precinct splashed across Melbourne’s papers.
In response, the Melbourne Club deployed a long-held option – a legally enforceable right – to acquire a 50 per cent stake in an existing lease of the car park from property giant Dexus. The lease has another 12 years to run, at a cost of $5.5 million, slamming the brakes on Hemmes’ plans.
Until the lease is up, the car park will remain largely a car park and Hemmes’ only immediate plans appear to be for a “semi-permanent pop-up” restaurant in the small space previously occupied by cult Thai restaurant Soi 38.
Yu says the restaurant will serve Asian-style food and hopefully open this year.
One prominent Melburnian Hemmes has in his corner is Lord Mayor Nick Reece, who led the Parkade sale.
“I’ve found him absolutely excellent to deal with. He’s very creative, he’s an incredible entrepreneur,” Reece says. “I think he’s done amazing things in Sydney, a city that was decades behind Melbourne in terms of its food hospitality scene.”
Reece says he welcomes Hemmes’ investment in Melbourne and expects he will add to the diversity of venues and experiences in the city, bringing in some of Merivale’s successful brands from Sydney, along with “new styles of dining” in Melbourne.
Reece flew to Sydney in June 2025 and posed for a photo with Hemmes despite the allegations against Merivale.
When asked whether those allegations are cause for concern, Reece defends the billionaire.
“If there is a case to answer then of course, he should, but he strenuously denies the allegations,” Reece says. “He’s spoken to that matter many times.”
Reece says he has received a backlash from business owners in the city for backing Hemmes, but he is undeterred.
“Ultimately, I will always do what I think is in the best interest of the city,” he says. “No amount of lobbying from whatever quarters will steer me away from doing what I think is right.”
Heirs and disgraces
Hemmes’ parents started the Merivale empire with three clothing stores called The House of Merivale, including a store in Collins Street just around the corner from Tomasetti House.
“There is a lot of nostalgia here for us,” Hemmes says in his video tour of the building.
Hemmes grew up in his family’s harbourside mansion, the Hermitage in Sydney, with his sister Bettina. It is estimated to be worth $200 million, making it Australia’s most expensive private home.
Hemmes’ parents bought the Hermitage in 1974 and gradually changed their business strategy, moving away from fashion to hospitality, opening Merivale restaurant in Potts Point in the early ’90s and closing their last fashion outlet by 1996.
Initially dismissed as a party boy, Hemmes failed the first semester of his university business degree and dropped out.
In 1998, he was arrested for drink-driving in his 1972 Ferrari and later that year he flipped a speedboat in Sydney Harbour, leaving his nine passengers hospitalised.
However, he found his feet in hospitality, taking over the family business and transforming it into a powerhouse focused on creating multi-level high-end hospitality experiences.
Hemmes has two young daughters with his former partner Kate Fowler, Alexa and Saachi, and last year had a son, Jaeger, with his 29-year-old model girlfriend Madeline Holtznagel.
Under Hemmes’ leadership, Merivale acquired venues like the Slip Inn and Establishment in Sydney and opened venues including Mr Wong’s, Totti’s and Mimi’s.
Over recent years, Merivale has also attracted controversy, agreeing last November to pay $19.25 million to more than 2800 current and former staff who alleged they were underpaid under an invalid employee enterprise agreement between December 2013 and December 2019.
The payment settled a five-year class action lawsuit launched by Adero Law in 2019 which alleged Merivale underpaid as many as 14,000 staff up to $129 million over six years. The hospitality group did not admit any wrongdoing.
Merivale continues to be under investigation by Fair Work following claims by eight former Merivale chefs recruited from Mexico, including Rodrigo Zavaleta and Rodrigo Santos, who say they were overworked, underpaid and racially discriminated against while working for the hospitality group.
Last year, a series of investigations by this masthead, Good Food and 60 Minutes detailed claims Merivale exploited workers, prioritised VIP treatment over staff safety and ignored claims of sexual harassment.
In October, the Good Food Guide owned by Nine, owner of this masthead, excluded Merivale, removing the hospitality group’s hats.
“For a business and its owner to be awarded a Good Food Guide hat and score, that discretion has broadened to exclude restaurants where there are serious and credible allegations that management is not providing a workspace – for all staff – free from harm and sexual harassment,” Sarah Norris, head of Good Food, said at the time.
Despite this controversy, Pat Nourse, creative director of the Melbourne Food & Wine Festival, says he welcomes Hemmes’ entry to the Melbourne market.
“I think people investing in Melbourne is a good thing,” he says. “They have employed really fantastic Victorian talent for some of their venues like Matt Germanchis in Lorne, and Zara and Mike Madrusan at LB’s make some of the best cocktails in town.”
When asked whether he was concerned about Merivale’s record on underpayments and allegations of harassment, Nourse said: “That’s a matter for the courts.” However, he dismissed concerns that Hemmes’ venues would result in the “Sydney-fying” of Melbourne.
“I have a lot more confidence in the power of Melbourne culture than to think that a few Sydney operatives coming in is going to Sydney-fy anything,” he says.
Hospitality consultant Holly Formosa says she hopes Hemmes is successful in Melbourne, but there are some operators who would like to see him fail.
“People love to hate on big groups,” she says. “Especially in Melbourne, where our whole hospitality culture was built on small independent operators.”
Formosa says that providing staff are looked after and paid correctly, it will be good for Melbourne to have an operator of Hemmes’ calibre in the city.
Whether Melbourne diners will flock to Merivale venues in the same way that Sydneysiders do is another question.
Roshell says Melbourne restaurants are different to Sydney as they have a real sense of place about them.
“Most of the restaurants that are thought of as these Sydney institutions could be almost anywhere in the world,” she says. “They’re big, brash, fancy restaurants which make sense for Sydney, but Melbourne is not so much into that.“
The property pay-off
Even so, Hemmes still ends up on top.
While one small bar and a pop-up in a car park is a far cry from the anticipated Merivale onslaught on Melbourne’s dining scene, Hemmes’ purchases do offer him a foothold and have expanded Merivale’s property portfolio.
Industry sources say the Hemmes family’s approach to real estate has always been to buy premium, spend big capitalising on it, and leverage off the result to finance the next project, with Merivale’s property holdings estimated to be worth more than $3 billion.
“His entire business is 100 per cent property,” says one property professional and experienced developer. “His model is simple: he acquires a property, puts his own venue in, and then he revalues it.”
Merivale owns the freehold asset for almost every venue the group owns, except for Felix in Sydney.
The property professional says even if Hemmes paid $55 million for the Parkade car park, if he can turn it into a multi-faceted entertainment venue in the CBD, it could be worth up to $600 million, a much better margin than the 20 per cent a good developer might make.
“He can use hospitality to get much better leverage off the asset,” he says.
Meanwhile, Hemmes’ pace in Sydney continues to be relentless. Last December, he opened the vibey Club Rose Bay – transforming the former RSL club – and this week new outposts of Jimmy’s Falafel and Jimmy’s House in Paddington.
Hemmes may not have cracked the Melbourne hospitality market yet, but his property investments here could still pay dividends.
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