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Hard Rock Bringing in Live Music

September 25, 2000

ORLANDO, Fla. (AP) _ The Hard Rock Cafe made its name with music memorabilia, guitars and gold albums safely preserved behind display-case glass.

Now, after a decade of falling merchandise sales and the implosion of the themed restaurant industry, the granddaddy of theme restaurants hopes to bring in new business by taking the music down from the wall and onto the stage.

Approaching its 30th birthday, Hard Rock Cafe International is planning a new emphasis on live music in its 103 restaurants worldwide. Hours will be extended late into the night for performances. The 55 restaurants actually owned by the chain will be redesigned or relocated to create space for live performances; the remaining restaurants are franchises.

The Orlando-based company also is redesigning its Web site with the aim of making it a top music destination on the Web. It also recently joined with eBay to sell rock memorabilia and Hard Rock collectibles over the Internet.

Hard Rock officials hope the new focus on live music further distances the company from its themed restaurant competitors, many of which have disappeared or are struggling in a shakeout that began in the mid-1990s.

``As some of our competition is starting to exit the market or wither on the vine, we really stepped up the pace on creating value for our 27 million guests worldwide,″ said Peter J. Beaudrault, who became Hard Rock’s president and chief operating officer last year after a management reorganization.

The Hard Rock brand is in dire need of revitalization, analysts say, after experiencing a decade of declining merchandise sales, which account for almost half of the company’s revenue.

``What they’re attempting to do at Hard Rock makes a lot of sense,″ said Philip Olesen, an analyst for Warburg Dillon Read in Stamford, Conn. ``It makes it more than a tourist destination, so people come back time and again and it offers more than T-shirts and mediocre food.″

Changes also will be made to Hard Rock’s menu. No longer content with just burgers and chicken wings, Hard Rock chefs are adding 12 new higher-end items such as stuffed veal chops for $26.95 and lobster tails for $19.95.

Hard Rock is owned by London-based Rank Group, which in the past year has sold off large parts of its entertainment empire. As a result, Hard Rock may be able to get more capital and attention than it has in the past, Olesen said.

Unlike other themed restaurant chains, such as Planet Hollywood, Hard Rock has been growing at a steady pace during the past decade and is making money.

In 1988, there were only five restaurants worldwide. Now there are 103 restaurants in 38 nations, four Hard Rock Live concert venues and a weekly cable television program on VH-1. The company also operates two Hard Rock hotels, with plans to open two more in two years. The company plans to open as many as eight new restaurants a year and build as many as eight more hotels in five years.

Hard Rock last year had a profit of $68 million on sales of $388 million. For the first six months of the year, Hard Rock had $34.5 million profit on more than $200 million in sales, according to the company.

In renewing its focus on music, Hard Rock isn’t straying very far from its roots. The first restaurant was opened in London in 1971 by founders Peter Morton and Isaac Tigrett. The restaurant’s first rock memorabilia came from Eric Clapton, a regular customer, who asked if he could hang a guitar on the wall to mark his favorite bar stool. The Who’s Pete Townsend followed suit a week later with a donated guitar.

The company now has a rock memorabilia collection valued at $32 million.

Company officials are looking to their renovated Chicago restaurant as a model for what the future holds. The octagon-shaped, dark-wood bar has been replaced with an open-space bar visible from every area in the restaurant. A 17-foot high tower of video screens, glowing behind liquor bottles, is mounted behind the bar serving as an eye-catching, incandescent icon.

And the cafe is keeping its doors open late for music in a newly-constructed performance area.

``After nine or 10 o’clock, we were typically shutting down,″ said Christopher Tomasso, senior director of marketing and productions. ``Now we’re going to get cranking up.″

___

On the Net:

www.hardrock.com

www.rank.com

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