Hard Rock hits high note Restaurant's revenue tops $13 million in 1st year at harbor


July 07, 1998|By June Arney | June Arney,SUN STAFF

The Baltimore location of the global Hard Rock Cafe chain has done better than expected in its first year of operation, with revenue exceeding $13 million, according to the property's landlord.

That amounts to $1,300 in sales per square foot at the nearly 10,000-square-foot location, said David Cordish, president and chairman of Cordish Co., which is revitalizing the former Power Plant.

"It's at the top for Hard Rock anywhere in the world," said Cordish. "I'm talking New York. I'm talking Orlando. I'm talking Paris."

"That's a phenomenal number," he said. "There's no one in Harborplace anywhere near that."

Several factors have contributed to the success, Cordish said.

"They have a great product," he said. "They keep it fresh. The location is fabulous, and the building is unusual."

Hard Rock officials declined to verify or provide sales numbers, but they confirmed that they are happy with the Baltimore site's success.

"I can tell you it exceeded our expectations," said Christie Conti, a Hard Rock spokeswoman in Los Angeles. "It's a great location."

The Baltimore restaurant, which opened July 5, 1997, is performing at the level of an "A-tier" city, comparable to others in such places as San Francisco, Miami and Boston, said Jim Berk, chief executive officer and president of Hard Rock Cafe International Inc. in Orlando, Fla.

"We're having a blast there," Berk said. "We're into a full year, and business hasn't changed a bit. It opened like gangbusters. It's been nonstop."

The themed restaurant, founded by two homesick Americans in London in 1971, recently opened its 91st restaurant in Cleveland. The chain has restaurants in 31 countries. Places where it will open soon or opened recently include Salt Lake City; Lake Tahoe, Nev.; Ankara, Turkey; Saipan; Rome; Amsterdam, Netherlands; and Cairo, Egypt, Berk said.

The expansion has come despite what many say is a declining market for themed restaurants in the estimated $2.5 billion-a-year "eatertainment" industry.

Larry Haverty, an entertainment industry analyst with State Street Research and Management Co. in Boston, said restaurants such as Hard Rock and Planet Hollywood -- both of which recently opened at the Inner Harbor -- are past their peak.

"Do you know anyone who doesn't have a Hard Rock T-shirt?" he asked. "When do you over-saturate a brand? I think Planet Hollywood and Hard Rock both did that."

Industry consultant Pat Esgate, president of Esgate and Associates Inc. of Nyack, N.Y., had a more dramatic assessment: "Themed restaurants are falling off the face of the earth."

For instance, despite Planet Hollywood's success and longevity, the company's shares dropped more than 34 percent this year after it announced that fourth-quarter earnings would fall short of expectations. Competition from other themed restaurants was blamed.

Berk, Hard Rock's CEO, acknowledges that these are challenging times for themed restaurants.

"I think that the industry is saturated," he said. "There are no new entries."

During the height of business about three years ago, Hard Rock executives focused on quality and positioning to prepare for tougher days, Berk said.

"This is a year when barely anyone is opening restaurants, and we're opening 19," he said.

Hard Rock has trimmed food prices and offers larger portions, he said. It also reduced merchandise prices and improved quality while maintaining service levels, Berk said.

Despite the industry's potential problems, at least one other themed restaurant chain plans to test the Baltimore-area market.

Rainforest Cafe Inc., a Minnesota-based company with 15 restaurants in the United States and four in other countries, has announced plans for a $7 million restaurant in Towson Town Center early next year.

At the Hard Rock in Baltimore, there are no plans for changes except perhaps to increase the live music performances. The restaurant recently added a pier that offers a seating and waiting area for about 150 people.

"There are times when everything works," Berk said. "Baltimore is one of those locations. We're just going to continue to rock on."

Pub Date: 7/07/98

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