Rick's Cabaret To Bring Mega Adult Club To Chicago Market With Acquisition Of Cl

15 comments

• Dougster

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  10 years ago

  I'm actually thinking of shorting the stock now - would likely be a three-six month trade. Main reason - overall market is starting to look weak and this is a high beta name. I also think rising rates hurts them given their debt load. What do you think RickyBoy? (I would get back in long later this year.)
• Papi_Chulo

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  10 years ago

  Build it and they will come.
  
  Tootsies is in Miami Gardens which is not the best area (76% black; 22% Latino) and it does well. The Tootsies area is also kinda in a warehouse area and Tootsies itself used to be a warehouse club (BJ’s – similar to a Sam’s Club or a Costco).
  
  Plus – a club in a “bad area” may mean a club with higher mileage unencumbered by tight local regulations.
  
• rickdugan

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  10 years ago

  I don't blame you.
  
  You know, this is starting to smell a lot like the same tactics that Donald Trump used, over and over, to build his wealth.
  
  http://www.forbes.com/sites/clareoconnor…
  
  Smart investors have known for forever and a day that his companies are notorious for being deadbeats and tend to stay away from anything with his name on it, but even leading up to 2009 he could always manage to find people willing to lend him money, simply because they wanted to be part of the grandiose things that he was doing with it.
• Papi_Chulo

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  10 years ago

  If they can offer good mileage in a pretty upscale club near low-mileage Chicago – they may do very well IMO.
• rickdugan

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  10 years ago

  Papi, I'm guessing that you've never been clubbing in Harvey. They are insane. Club O has been there forever and if the demand for them to expand was that great, they already would have done so. I have my suspicions as to why RICK would really do this, and it truly sucks if I am right, but caveat emptor if you choose to get into bed with RICK by extending them credit and accepting their shares as payment.
• tumblingdice

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  10 years ago

  There is one born every minute,my fucking meal tickets. Next.
• Dougster

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  10 years ago

  I still think they are planning a secondary some day and want glitzy clubs under their belt at any price. CNBC loves to run stories about the business side of porn, so they would certainly gobble this one up. I think that's as deep as the planing goes. If the market is about to correct they may have to put off that offering for a bit, however, and it could backfire. If I'm wrong though they will look like geniuses.
• rickdugan

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  10 years ago

  LOL, sure, a secondary. More likely a new IPO after their restructuring plan is complete. ;)
• Dougster

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  10 years ago

  That's actually a good idea if IPOs can remain hot. An IPO for the REIT at least. Most people love the notion of real estate and renting it even more than high beta stocks.
• rockstar666

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  10 years ago

  Harvey is one of most crime ridden, corrupt communities in the country. The clubs are mostly black, with high mileage from average to below average looking dancers on the cheap for working class people. Frankly I can't see how an upscale club can survive there. It's probably going to be a money laundering front for the mafia.
• dallas702

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  10 years ago

  I visited "O" several times in the past (between '98 and 2007) and was underimpressed each time. First the location. Difficult to get to, even though it is very near I295 and I90. The parking lot is behind a run down (and when I was there last time - closed) motel. Access was poor. Rick's may be willing to spend the money to improve visibility and access, but it will cost!
  
  The club also suffered from "local law disease." The Chicago area is a wasteland for strip clubs because local laws are heavily enforced for months before every election and whenever a politician needs a distraction. Harvey, IL (very close to Chicago's Southside) is subject to that kind of enforcement. Other clubs in the area also suffer the same legal constraints (Skybox and King of Diamonds). The unique exception to this limitation is Arnie's Idle Hour and the reason is that Arnie's is a black club and the politicians will not risk losing votes for raiding a black club.
  
  And finally, other posters are very right, Harvey is a crime ridden cesspool. The community is little better than the nearby, battle torn Chicago Southside neighborhoods where 600 to 1,000 gang shootouts a year are the norm. The area looks trashed, because it is. Businesses leave Harvey as fast as they can pack. Ricks may not have bought into a winner.
  
  That said, I hope that Rick's CAN make a success out of the run down "O". Considering that "O" was one of the brighter stars among businesses in Harvey, anything Ricks can do would likely improve the neighborhood. Hell, a landfill with attached radioactive waste dump would be an improvement for Harvey!
• ATACdawg

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  10 years ago

  I have seen everything! RickDugan & Dougster having a civil discussion about the issue. Hallelujah! The end times are upon us!
  
  Seriously guys, doesn't it feel kind of good?
• rickdugan

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  10 years ago

  ATAC, that's only because I chose not to respond to his last post. :)
  
  Dougster, keep maybe you are right. Maybe that that magic REIT, with buyers overpaying for RICK's real estate assets and then leasing them back at below market rates, all so that RICK can unlever its balance sheet at their expense, may be JUST around the corner. ;) [I can just copy and paste this stuff now - lol].
• sinclair

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  10 years ago

  Good luck bringing in a steady flow of customers with money into Harvey. This is like what Rick's did in Indy: put up an upscal club in a black neighborhood and expect guys to drive over there to pay high prices for low mileage. With the exception of Tootsies, I never liked Ricks clubs.
• Dougster

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  10 years ago

  KING IPO did not get off to a good start. If RICK's plan was to restructure and IPO might have to wait (at least) a few months now. Stock is looking weak, but no huge volume (yet).