The naked truth about strip clubs $$$!
Ewe
Florida
http://www.nydailynews.com/news/2007/07/…
This club makes alot of money. Anybody know what are the top 30 $$$ clubs in the USA are?
Welcome to Rick's Cabaret in Herald Square, one of Manhattan's elite gentlemen's clubs, upscale from top to bottom; from the Kobe beef burgers to the flat-screen TVs, lobster and bottles of Scotch.
This is the province of high rollers, a place where suits with expense accounts, rap stars and athletes such as Alex Rodriguez throw their money around - sometimes quite literally.
High-end strip clubs offer prewrapped bundles of various denominations of cash, generally in $1,000 packets, for those who want to buy tips for the dancers and others who want to throw cash up in the air on the dance floor for anyone who grabs it.
Rap stars and athletes popularized the custom, called "making rain."
And then there are the women, "the product," as club entrepreneurs call them, the main attraction, often supernaturally attractive, available near-naked for a lap dance or conversation at rates that range from $20 for two minutes to $400 an hour.
"One customer, a widower, spends $50,000 here a month, and no I won't tell you his name," said Eric Langan, the CEO of Rick's. "His wife died, he comes here, he feels he's the king. The loneliness is gone."
"He always takes a VIP room," said Langan, referring to the secluded, curtained-off rooms on the third floor slated for more private entertainment and gatherings, including bachelor parties.
There is no sexual contact with customers, management explains, no prostitution, no seediness like in the old-time strip clubs, and no organized crime hooks.
Today, gentlemen's clubs in the city, and across the nation, are becoming big business and quite conventionally corporate. With profit margins up to 30% they can rake in hundreds of millions of dollars.
Rick's is part of a publicly traded corporation, Rick's Cabaret International Inc., with shares traded on the NASDAQ, and accountants, attorneys, Securities and Exchange Commission filings and a business model not very much different than WalMart, except for what's being sold.
"For guys, it's male bonding, or an escape from reality," Langan said. "You want to believe this 19-year-old girl really loves you, is listening to you and maybe in another time, she could be your girlfriend. So you can spend $3,000 here and say 'Hey, I had a good time.'
"We want you to come back. We want your money every week," he said.
Rick's owns, operates or licenses, 14 adult entertainment clubs around the country, including venues in Houston, Minneapolis and New Orleans.
Another such company, VCG Holding Corp., publicly traded on the American Stock Exchange, owns eight clubs around the country and manages another five - none in New York.
The stock price of both - the only two publicly traded companies of their kind - have shot up remarkably over the last year or so. VCG, headquartered in Denver, is up 700% from its low and Rick's, headquartered in Houston, has climbed 100% from its 52-week low.
Because they are publicly traded, unlike Scores and the city's other upscale gentlemen's clubs, Rick's and VCG must disclose detailed balance sheets: profits, losses, costs and investments.
Those financials provide a unique look at the unusual economics of the modern strip clubs and the millions of dollars they generate.
One factor boosting the bottom line is that unlike other businesses, there is no cost for the key labor force, the strippers. Quite the opposite, for the dancers pay the clubs for the right to work.
The fee at Rick's is $100 a night, and in return, the women keep all the money they receive from customers, including credit-card charges. At Scores, better known and somewhat more luxurious, the dancers pay the club $300 a night to work.
"They're independent contractors," Langan said. "We provide a safe and secure place for them to earn their money."
He and Troy Lowrie, CEO of VCG Holdings, explained that the practice is accepted nationwide, and that dancers' fees account for about 10% of revenues in their business model.
The dancers say the fees, called "house charges," are a small price to pay when they consider their income.
Jasmine, a lissome blond dancer at Rick's, said, "It works out well. I have a masters in psychology from LIU [Long Island University] and I need to pay off my school loans. Where else could I make $600 a day or more?"
The other major revenue items are cover charges, food and alcoholic beverages, which provide the bulk of revenue.
"Revenues at Rick's in New York were up 63% in the first quarter," said Langan, 39. He got into the business at 20, in Dallas, buying his first club with the proceeds of his rare baseball card collection.
"It's all about the numbers," he said, quickly ticking off a few. The rent at the 10,000-square-foot club is $49,000 a month, he said, and gross profit margin on total revenues is about 35%.
Nothing is left to chance: To avoid day-after disputes with customers who decide they've spent too much, big-spending customers are fingerprinted, and sign separate approval forms for credit charges. Credit-card companies are telephoned in advance for approval on spending limits.
And business is booming.
"The top 30 clubs in the country are valued between $700 million and $1 billion," Langan said. "There's a lot of consolidation going on and we are expanding. I'd love to buy another club in New York."
Lowrie has similar ambitions. "Our guidance shows us buying two more clubs this year and five more clubs next year because with our stock price, we can raise money and we have a pipeline full of potential acquisitions."
There are about 3,600 strip clubs nationwide, Lowrie said. "And from a business point of view, it's all like Las Vegas was in the early '70s. Investors and banks are realizing that like gambling and casinos, adult entertainment and gentlemen's clubs are a legitimate business."
"There's nothing we don't take into account," Langan said. "Club location, nearest competition, the legal environment in a city and zoning laws when we invest.
"Ultimately though," he added, "you want to get into a market and dominate, just like any other business."
This club makes alot of money. Anybody know what are the top 30 $$$ clubs in the USA are?
Welcome to Rick's Cabaret in Herald Square, one of Manhattan's elite gentlemen's clubs, upscale from top to bottom; from the Kobe beef burgers to the flat-screen TVs, lobster and bottles of Scotch.
This is the province of high rollers, a place where suits with expense accounts, rap stars and athletes such as Alex Rodriguez throw their money around - sometimes quite literally.
High-end strip clubs offer prewrapped bundles of various denominations of cash, generally in $1,000 packets, for those who want to buy tips for the dancers and others who want to throw cash up in the air on the dance floor for anyone who grabs it.
Rap stars and athletes popularized the custom, called "making rain."
And then there are the women, "the product," as club entrepreneurs call them, the main attraction, often supernaturally attractive, available near-naked for a lap dance or conversation at rates that range from $20 for two minutes to $400 an hour.
"One customer, a widower, spends $50,000 here a month, and no I won't tell you his name," said Eric Langan, the CEO of Rick's. "His wife died, he comes here, he feels he's the king. The loneliness is gone."
"He always takes a VIP room," said Langan, referring to the secluded, curtained-off rooms on the third floor slated for more private entertainment and gatherings, including bachelor parties.
There is no sexual contact with customers, management explains, no prostitution, no seediness like in the old-time strip clubs, and no organized crime hooks.
Today, gentlemen's clubs in the city, and across the nation, are becoming big business and quite conventionally corporate. With profit margins up to 30% they can rake in hundreds of millions of dollars.
Rick's is part of a publicly traded corporation, Rick's Cabaret International Inc., with shares traded on the NASDAQ, and accountants, attorneys, Securities and Exchange Commission filings and a business model not very much different than WalMart, except for what's being sold.
"For guys, it's male bonding, or an escape from reality," Langan said. "You want to believe this 19-year-old girl really loves you, is listening to you and maybe in another time, she could be your girlfriend. So you can spend $3,000 here and say 'Hey, I had a good time.'
"We want you to come back. We want your money every week," he said.
Rick's owns, operates or licenses, 14 adult entertainment clubs around the country, including venues in Houston, Minneapolis and New Orleans.
Another such company, VCG Holding Corp., publicly traded on the American Stock Exchange, owns eight clubs around the country and manages another five - none in New York.
The stock price of both - the only two publicly traded companies of their kind - have shot up remarkably over the last year or so. VCG, headquartered in Denver, is up 700% from its low and Rick's, headquartered in Houston, has climbed 100% from its 52-week low.
Because they are publicly traded, unlike Scores and the city's other upscale gentlemen's clubs, Rick's and VCG must disclose detailed balance sheets: profits, losses, costs and investments.
Those financials provide a unique look at the unusual economics of the modern strip clubs and the millions of dollars they generate.
One factor boosting the bottom line is that unlike other businesses, there is no cost for the key labor force, the strippers. Quite the opposite, for the dancers pay the clubs for the right to work.
The fee at Rick's is $100 a night, and in return, the women keep all the money they receive from customers, including credit-card charges. At Scores, better known and somewhat more luxurious, the dancers pay the club $300 a night to work.
"They're independent contractors," Langan said. "We provide a safe and secure place for them to earn their money."
He and Troy Lowrie, CEO of VCG Holdings, explained that the practice is accepted nationwide, and that dancers' fees account for about 10% of revenues in their business model.
The dancers say the fees, called "house charges," are a small price to pay when they consider their income.
Jasmine, a lissome blond dancer at Rick's, said, "It works out well. I have a masters in psychology from LIU [Long Island University] and I need to pay off my school loans. Where else could I make $600 a day or more?"
The other major revenue items are cover charges, food and alcoholic beverages, which provide the bulk of revenue.
"Revenues at Rick's in New York were up 63% in the first quarter," said Langan, 39. He got into the business at 20, in Dallas, buying his first club with the proceeds of his rare baseball card collection.
"It's all about the numbers," he said, quickly ticking off a few. The rent at the 10,000-square-foot club is $49,000 a month, he said, and gross profit margin on total revenues is about 35%.
Nothing is left to chance: To avoid day-after disputes with customers who decide they've spent too much, big-spending customers are fingerprinted, and sign separate approval forms for credit charges. Credit-card companies are telephoned in advance for approval on spending limits.
And business is booming.
"The top 30 clubs in the country are valued between $700 million and $1 billion," Langan said. "There's a lot of consolidation going on and we are expanding. I'd love to buy another club in New York."
Lowrie has similar ambitions. "Our guidance shows us buying two more clubs this year and five more clubs next year because with our stock price, we can raise money and we have a pipeline full of potential acquisitions."
There are about 3,600 strip clubs nationwide, Lowrie said. "And from a business point of view, it's all like Las Vegas was in the early '70s. Investors and banks are realizing that like gambling and casinos, adult entertainment and gentlemen's clubs are a legitimate business."
"There's nothing we don't take into account," Langan said. "Club location, nearest competition, the legal environment in a city and zoning laws when we invest.
"Ultimately though," he added, "you want to get into a market and dominate, just like any other business."
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22 comments
$50,000 a month would probably be enough to make many dancers want to get married where I live at.
I think I can find pretty girls without the extreme price. As an example I was watching a Hooters swimsuit challenge competition for 2005 tonight (I hadn't seen it before) and noticed the winner was a very pretty and charming girl from a little town within 30 miles of where I used to live at. She worked at a Hooters store that I probably drove past hundreds of times.
Well I got curious, shadowcat's city was number 8 in 2005 but did not make the top 10 in 2006.
Some of my relatives live in the 5th best city for the 2006 survey. They really have it rough though. I mean I think they spent over 30K to 50K to add on to their back porch because I heard the government would have just taken it away in taxes if they didn't spend it. Rough. Those are my relatives whose only money troubles involve finding the best places to invest. Of course you can spend a lot of time comparing investments and doing research. I'm a bit surprised. I remember they used to work at one of the best companies to work for. Now their company is only number 48. I think traffic has been getting worse and worse over the years in the Triangle area in NC since I moved away from there.
Luck beats skill. He was probably sweating out the situation at Delta.
Yes, the race troubles (economic and social, both) still continue. New Orleans is quite similar. A lot of my friends who had to leave after Katrina ended up in Memphis and are saying things are unsettlingly familiar -- impoverished blacks, small enclaves of obscenely wealthy white professionals, liberal vice scene, city foundation on the notion of historical strength in music and "culture" and food, horrifically corrupt police and school board, la la life goes on.
What Memphis has that New Orleans never did, is room to grow. NOLa has swamp on four sides, so (aside from Jefferson Parish, a rather small suburb by national standards) there are no bedroom communities, hence very little opportunity for "normal" safe home-owning for lower-to-middle-tier incomes, hence less "American dream," less material investment in any long term prospects (education, business investment). This means NOLa was able to withstand the onslaught of "generic-ification" when suburbs destroyed many cities' "character" (though we're losing now -- Wal-Mart and Home Depot are winning after Katrina, because national organizations have the deep pockets to weather that sort of storm). But it also means NOLa had nothing to offer but "itself" economically.
In that "room to grow" category goes one great big important development in Memphis, the shipping hub at the airport. I'll bet the land it occupies is about the same as all of NOLa's suburbs combined! Fed Ex is the thing which differentiates Memphis from any other city in the South, as far as I'm concerned.
I'd move to Memphis if I could get a decent job there, though the driving would wrankle the heck out of me. One dude told me that there are more square feet of roadway (thus measuring length and width!) per capita in Memphis' suburbs and "greater metro area" than any other city in the US. I can believe it.
Bones, is your "risk of arson" (no doubt mildly satirical) mentioned because you live in Memphis proper? I'm sure many suburbs offer a different perspective, but are still within easy drive of The Pony and Christie's (and, some day, Tunica "Caberet" [sic] if it ever reopens?).
I'd definitely be interested in buying. Probably can't afford it even if it was dirt cheap, but I've NO problem with crack heads, hookers, drug lords, trash, etc. My background is extreme poverty so it doesn't shock or upset me.
A wealthy buddy came to my neighborhood many years ago and just getting out his car made him very unconfortable. I wanted to take him to some of the "ghetto" clubs and he took one look and said you've got to be insane! I'd rather pay a few hundred per lap than risk my life in this neighborhood. (A really great guy, who believed in hard work and fair trade.) He came from wealth and just couldn't see living the way I do. For example, I have NO air conditioning in the heat of South Florida. I'd much rather spend it on $5 laps. For years and years I had NO refrigerator--well actually I had a refrigerator, but it wasn't plugged in because it never worked. The TV sets, I had like 5 or 6, but none worked--I didn't buy them, btw. Couldn't bare to throw 'em out cause of waste not want not ethos. I had cars, but getting them to run was tricky and labor intensive.
Of course, he had a solution: Employment. Yeah, you get desperate enough that's probably a good idea. I'd rather forget the modern conveniences--except for lap dances of course--and eat and drink a lot less. :)
I remember fondly the rougher days of Miami. Now, wealth is moving in and the poor are leaving. That probably includes me although technically I'm not extremely poor anymore. If I had money, then maybe I'd feel differently. But, being lower income I don't get too upset about things middle class people would flee from. Actually, I think even if I won the lottery I would have the same tastes. I wouldn't want or know how to live middle class or upper class. Lower class is just fine as long as there is spending money. :)
Downside in living in Memphis city limits.... you pay city property taxes and county (Shelby) property taxes. MLG@W (Memphis Light, Gas & Water) is corrupt, along with CITY law enforcement, and King Willie's (Mayor) office.
I hope Tunica Caberet doesn't open again when I have to settle back in Memhis. I'd be tempted to get a Home Equity loan for SC funds!!! Yeah, those idiots that made up there sign, didn't even realize they spelled Cabaret wrong.
Actually, living in NE Memphis wasn't bad and I had a good paying easy job of dealing at a Tunica casino. After reading jablake's comments, I would feel like King of the Hill again back in Memphis. Besides, I need to get back to work & get my life back together. Maybe a year or so more.