Tag Archives: business

Death by Chocolate in Las Vegas

Willy Wonka has nothing over Max Brenner, or should we say Oded Brenner, right, the real Max Brenner.

Brenner, the epitome of the consummate professional sweet tooth, whips up a cavity-inducing array of pure chocolate decadence including such entrees as chocolate pizza, chocolate quesadillas, chocolate s’mores and, if that is not enough to smash competition, their utterly chocolate extravagance called The Sticky Caramel Chocolate Concoction. 

The Israeli-based premiere chocolate-to-die-for chain of Max Brenner stores, owned by the Strauss Group, now has worldwide domination squarely in their sights, planning to open this summer an enormous branch store in the Forum Shops in the Caesars Palace mall in Las Vegas, facing the H&M flagship store. 

The chocolate bar alone will spread over two floors and 9,310 square feet including more than 200 seats and a bar with 12 stools and bar tables. The Las Vegas branch will also offer a chocolate shop and a room for private parties of events of up to 45 people. 

Another Max Brenner branch is also expected to open soon in Boston, in the Restaurant Row area. It will spread over one floor measuring 5,844 square feet in size and will include about 150 seats as well as a full-service bar with stools, a chocolate shop and, yes, even a chocolate restaurant. 

According to Giora Bar-Dea, CEO of Strauss-North America:  “This year we began implementing our strategy to build Max Brenner as an international brand.  The opening of new branches in central Las Vegas and in Boston is aimed at introducing the brand in the West Coast of the United States and strengthening our international exposure, with the goal of opening additional branches in the continent.” 

About $5.35 million was invested to open both branch stores. 

The new branches will join the chain’s 30 branches worldwide: two in Manhattan, 18 in Australia, two in the Philippines, two in Singapore, and six in Isreael, the company’s headquarters, which houses 15 staff people, led by founder Oded Brenner. 

The Max Brenner chain was established in 1995 by Oded Brenner and Max Fichtman, and is now owned by the Strauss Group after it was acquired by Elite in 2001. The chain’s global sales turnover is $32 million annually.

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Harrah’s Entertainment in Las Vegas Going… Retail

Harrah’s Entertainment is reportedly seeking a building permit for a three-story, 72,000-square-foot Strip-front build-out on the southwest corner of Paris Las Vegas. That space, which now has a fountain and an outdoor dining area, would get a retail store, new restaurants and a nightclub.

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Tropicana in Las Vegas Taps New Marketing Vice President

The Tropicana hotel on the Las Vegas Strip has a new marketing vice president.

Tropicana Las Vegas President Thomas McCartney announced  that Cynthia Mun has been hired to head marketing of the property’s $125 million restoration and rebranding. 

McCartney says the effort will focus on the Tropicana casino, pool, restaurants and bars, guest rooms and conference center. 

McCartney says Mun has 20 years of marketing experience, most recently as executive director of business insights and strategy at casino giant MGM Mirage. 

Mun previously was a new product development executive at Dun & Bradstreet, and co-founded a wireless technology company based in San Francisco. 

She studied biophysics, biochemistry and sculpting at Yale University, completed Harvard Business School’s leadership and strategy programs, and attended Le Cordon Bleu’s California Culinary Academy.

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Wall Street Bets on Isle of Capri Casinos

Comprehensive cost-cutting measures and being located outside the troubled Las Vegas and Atlantic City markets is making Isle of Capri a safer bet among investors despite continued revenue loss at its casinos. The regional gambling operator, based in St. Louis, Mo., is sporting the best returns among its casino peers, with its share price more than tripling since the beginning of the year.

“Although there is broad pressure on consumer spending, smaller regional markets have held up better than Las Vegas and Atlantic City during the recession,” said Michael Paladino, senior director of gaming at Fitch Ratings. 

Missouri recently eased gaming regulations, which helped Isle’s relative property performance compared with some of the larger gaming companies with greater exposure to Las Vegas and Atlantic City, Paladino said. In general, regional casinos in America’s heartland have stabilized because they aren’t as vulnerable to weakness in nongaming areas such as lodging, fine dining and air travel. 

MGM Mirage and the Las Vegas Sands Corp. had been dogged by concerns surrounding liquidity as well as a brutal business environment in Sin City which is battling rising unemployment and home foreclosures. Amid signs of industry stabilization and the removal of bankruptcy fears, MGM Mirage is up 260% from its 52-week low of $1.81. However, the company’s share price is still down about 52% from the beginning of the year.  Meanwhile, Las Vegas Sands is up roughly 36% on the year to about $8. 

Keith Foley, a gaming analyst at Moody’s Investors Service, said while investors are getting more bullish because the pace of declines has slowed, Isle of Capri is still grappling with “declines on a revenue basis with few exceptions across the board,” at the casino properties. 

“The top line is still struggling,” he said. Foley noted, however, that the management team has made extensive strides at controlling costs. “It’s still hard to say that (demand) trends have stabilized across the U.S.” 

Isle of Capri, which owns 17 properties, announced last week that it swung to a fiscal fourth-quarter profit on a $57.7 million gain from the early extinguishment of debt. It was the company’s second straight quarter of profit after more than two years of losses – a $95.2 million Hurricane Katrina insurance claim inflated its fiscal third-quarter results. 

The debt-laden casino operator has been cutting costs and consolidating its portfolio into two brands as it concentrates on the U.S. The company has left the U.K. market and plans to stop operating its property in the Bahamas, where a sharp decline in tourism in late May shuttered a Four Seasons Hotels and Resorts BV property. 

Fitch’s Paladino said the company has made strong efforts to improve their financial position, which has improved sentiment on the company. They have “one of the top cost-focused management teams in the industry,” he said. “Their overall credit profile is pretty attractive.”  Paladino also said Isle has no debt maturities until 2012 and very minimal capital spending plans beyond maintenance.

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Las Vegas Dummies Provide Recession Relief

So, what else is new for “anything goes” La Vegas?   For Alison Wainwright, founder and president of Las Vegas Mannequins, being creepy is just the solution she needed to not just defy and insulate her from the ravages of the recession, but experience rapid growth as well. 

Although mannequins make the flesh crawl for many people, she has the distinction of having Las Vegas’ only full-service source for the purchase, rental and repair of mannequins, torsos, lower bodies, heads, glossies, poseables, plastic, fiberglass, faceless ciphers, and full-featured dummies.    Made in men, women, teens and children models, she even takes it one step further, offering “sexy mannequins,” which are “bigger.”  

Some of her sales – full-size mannequins sell for between $150 and $330, with rentals for a only a little less – go to adult entertainment businesses and burlesque dancers who arrange their costumes on them. 

Las Vegas police officers buy mannequins for use in car crash demonstrations, faux planted officers in cars to slow down drivers on freeways, and provide lifelike shooting targets. 

Others use the creepy bits and pieces for Halloween displays and haunted houses.  Students like them for art projects and movies.  But far and away, the bulk of Wainwright’s business comes from conventions, especially clothing expos. 

The convention business is where Wainwright started out in 2004.  Since then she has rented a storage unit, and then moved into a warehouse just west of the Wynn Las Vegas. 

Sales have been up 100 percent, just as they have been every year since she opened.  And in the last two years her mannequins have made it possible to buy her a new house.

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Onex to take Control of Tropicana in Las Vegas

Onex Corporation has acquired some of Tropicana Entertainment LLC’s debt at a discounted rate, which will give the private equity firm control of the company’s prized Las Vegas Strip property after it emerges from bankruptcy. Tropicana

Tropicana’s reorganization plan, which was approved by a Delaware bankruptcy court earlier this month, eliminates more than $2.4 billion in debt and more than $125 million in annual interest payments from the books. 

Onex leveraged Tropicana’s depressed economic condition and bought more than $200 million of the privately held company’s $440 million term loan, which is secured by the 51-year-old Tropicana Resort & Casino. Toronto-based Onex will pay for the debt with a credit agreement specifically set up for the purchases, according to a recent securities filing.

Onex partner and former MGM Mirage President Alex Yemenidjian will become chief executive of the Las Vegas casino under terms of Tropicana’s restructuring plan. 

Tropicana Resort & Casino rests on 34 acres in Las Vegas and includes more than 1,850 hotel rooms, a casino of about 61,000 square feet, five restaurants and an 850-seat showroom. 

Tropicana Entertainment’s reorganization also includes an exit financing commitment from Icahn Capital, a company owned by billionaire investor Carl Icahn.  Icahn has been interested in the company’s Atlantic City, N.J., casino, which will be sold in a bankruptcy court auction.

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Las Vegas Room Occupancy Rates Bounce Back

roomsLas Vegas is not going back to their heyday of charging $500 per night room rates.   With ever increasing competition and the growing room inventory, those days are probably gone forever.  

But visitors are now at least starting to return to the bright neon of Las Vegas, lured by the lower relative room rates and successful direct marketing drives by Las Vegas hotels that are filling the weekday void left by conventiongoers whose budgets have dwindled. 

Las Vegas vigorous room marketing efforts are at last starting to pay off.  

With Las Vegas hotel demand and occupancy rates inching upwards, Las Vegas resort executives are rethinking their room strategies and are considering increasing room rates, a move that could contribute to improving their sagging profit margins and contribute to the start of a healthy Las Vegas business rebound in 2010. 

“The weekends are consistently solid now,” MGM Mirage CEO Jim Murren said during a conference call last week to discuss first-quarter earnings.  “Even when we don’t have a major event we are able to occupy rooms at a solid level.” 

In January, MGM Mirage’s hotels had an occupancy rate in the 70s- a respectable statistic for many major cities but ranked poor for Las Vegas, where hotels have historically operated at higher than 90 percent occupancy.  That figures has risen each month this year, reaching 95 percent in March and 97 percent in April, in line with a year ago before business worsened. 

Las Vegas room rates although increasing, are still depressed, according to official figures from earnings reports and tourism officials.  MGM Mirage’s revenue per available room was $102, or 34 percent lower in the first quarter than the year-earlier period. 

Undaunted, Phil Ruffin, who bought Treasure Island from MGM Mirage in March, plans to raise their room rates.  “I’m not going to give rooms away.  That’s a heads-in-beds philosophy,” Ruffin said.  “I don’t want the $50 customer.” 

You can still make money – more money, in fact – by running at 70 to 90 percent occupancy and charging more for rooms, according to Ruffin.

Whether this strategy and others like it continues to work depends on the ongoing reaction of recession-battered tourists that have now tasted sweet vintage hotel price deals in Las Vegas.  

Las Vegas tourism growth, analysts say, will only continue if tourists believe they’re getting a bargain and a good combination deal- not just a good room rate, but meals, shows and drinks as well.

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