Rick's Cabaret International Inc. said today it has shut down its Las Vegas topless dancing club in order to eliminate losses as it seeks a buyer for the property.
The last day of regularly-scheduled business for Rick's Cabaret in Las Vegas was Monday, though the property at Desert Inn Road and Valley View Boulevard may reopen from time to time for special occasions, a spokesman said.
“We have done everything possible to make this location viable since its acquisition in 2008 and we now believe it is in our shareholders’ best interests not to continue these efforts,” Eric Langan, president and CEO of Rick’s Cabaret, said in a statement. “We do not believe the Las Vegas market itself will return to its former strength in the near future, and thus it is more logical for us to use our financial and management resources to focus on viable acquisitions and grow our other properties. While the curtailment of operations in Las Vegas will result in a top-line revenue decline for the company, the bottom line benefit will be immediate, and we will make use of potential future tax benefits.”
Allan Priaulx, a spokesman for Houston-based Rick's, said the club struggled to make money given the high marketing costs needed to attract customers. He didn't want to elaborate, but it's well known that marketing costs for the industry have soared in Las Vegas in the form of cash paid to taxi drivers as an incentive to steer business to the clubs.
Priaulx also noted a decline in business from high-spending male travelers to Las Vegas and from locals.
He didn't know how many employees were affected by the closure, but said hundreds of dancers -- independent contractors -- were affected by the shutdown.
Rick’s Las Vegas lost approximately $370,000 in the 2010 fourth quarter on revenue of $1.1 million vs. a year-earlier loss of $500,000 on revenue of $3.1 million, the company said in a regulatory filing.
In responding to a 2010 lawsuit, Rick's charged it had purchased the club based on misleading financial information.