US-themed restaurant chain Hard Rock Café is predicting a 15% decline in full-year operating profits, as tourists decide to stay at home after the 11 September attacks, but has described its overall performance through September to the end of October as “satisfactory” as several cost cutting measures offset the lost revenue.
The chain, which recently watched its closest competitor Planet Hollywood make a second trip to the bankruptcy court, saw its shares increase 7.75p to 213.25p.
Cost-cutting measures included job losses, the number of which has not been revealed, and lower merchandise orders.
The chain, owned by London-based gambling and resort conglomerate Rank Group, recently stressed that ambitious expansion is still going ahead, and reiterated plans to open up to 15 more Hard Rock Cafés over the next two years, mainly in the UK and continental Europe. It already controls 111 cafes in 41 countries around the world.
Pete Beaudrault, president and CEO of the firm, told the Orlando Sentinel that there is no reason why this pace cannot be maintained, not least because “our competition’s virtually gone”.
Beaudrault added, “we are still all about cafés, because it’s the engine that drives our ability to diversify,” saying that gambling would form a large part of Hard Rock’s global portfolio in future years: “If you fast-forward five years, hotels and casinos will represent about 50% of our sales and profit, and we will be a US$1bn-a-year company. We have six to eight casino negotiations going on right now, worldwide.”