Press Release: Hard Rock Cafe International
September 10, 2001
ORLANDO, FL -- Hard Rock Cafe International Friday announced its earnings for the first six months of 2001 as part
of a report issued by its parent company, The Rank Group Plc (NASDAQ: RANKY).
Hard Rock Cafe increased operating profit by 10% to $34.1 million for the same period in 2000, despite an extra
trading week in 2000 and a one-off restructuring charge of $2.5 million, which was realized in the first half of
2001.
Same Store Sales
Total revenues were up $4.3 million while same store sales within company owned cafes were down 3.5% versus 2000
(on a comparable 26 week trading period). The improved trend experienced in the first weeks of the year was adversely
affected by the slowdown in the US economy, particularly in cities where there is a greater reliance on tourism,
and by disruption to key cafes caused by renovation projects. European locations continued to perform strongly
with same store revenues up 3.8%.
``We are optimistic about our same store sales and specifically our increased operating profit in what has proven
to be a very difficult first six months of the year for virtually all business segments,'' said Pete Beaudrault,
President and CEO of Hard Rock Cafe International. ``Since June we have seen significant same store sales improvement
by the cafes and have in fact experienced a same store sales increase over last year for the month ending August
31.''
Renovations
A total of $13.4 million was spent in the first half of the year on 13 cafe renovations, with a particular emphasis
on the merchandise offering. Work has now been completed on many of the larger cafes including New York, London,
Las Vegas, Paris and Washington, D.C. The recent results have been encouraging within these cafes since their relaunch.
Plans to continue renovating the cafe portfolio will continue over the next twelve to eighteen months, including
the relocation of a number of units.
Expansion Plans Continue
Plans are also in place for the opening of new company-owned cafes in Munich, Germany; Birmingham, England (to
open later this year); Pittsburgh, Pennsylvania; Austin, Texas and Minneapolis, Minnesota (to open in 2002).
Franchise Cafe Growth Strong
The global attraction of the Hard Rock brand was again reinforced in the first half of the year with a significant
increase in franchise and other income to $12.4 million. This includes franchise territory sales amounting to $4.7
million.
Company officials believe that there are further opportunities to expand the reach of the brand within the core
cafe business, within hotels and casinos and beyond.
Aggressive Hotel and Casino Expansion
The Hard Rock Hotel in Orlando opened in January and continues to exceed our expectations. Further hotel deals
previously announced are well underway, including a location in Pattaya, Thailand scheduled to open in November
of 2001 and the Chicago deal announced last year, slated for a 2003 opening. Within casino gaming, a number of
opportunities are being pursued in the US and, as previously announced, a Hard Rock casino will open in Manchester
in early 2002 and two hotel and casino projects with the Seminole Indian Tribe in Florida recently received tribal
approval to move forward with a projected 2003 opening.
Marketing and Live Music Efforts
There were considerable promotional expenditures within the cafes as we switched efforts from general brand reinforcement
to traffic building and incentives to increase local customer attendance with late night live music offerings resulting
in increased bar revenues.
For more information on Hard Rock Cafe, visit www.hardrock.com. Hard Rock
Cafe, one of the most globally recognized music, entertainment and dining brands, has a network of more then 100
signature Hard Rock Cafes in 40 countries and a music memorabilia collection valued at nearly $32 million. Celebrating
its 30th Anniversary in 2001, Hard Rock Cafe is also known for collectible and fashion merchandise, live concerts,
Hard Rock Live performance venues, the Hard Rock Records music label, hardrock.com and Hard Rock Hotels and Casinos.
Hard Rock Cafe International, Inc. is a wholly owned subsidiary of London-based The Rank Group Plc (NASDAQ: RANKY).
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Contact:
Hard Rock Cafe International
Chris Tomasso, 407/445-7625