Remember back in late 2004 when plans for a Playboy “lifestyle club” in Shanghai were announced and then halted over the span of a couple days? Well, a look at the minutes from a recent Playboy conference call with investors shows there is still hope for the Bunnies to hop over the Huangpu:
Melissa Otto (Analyst)
I would like to get a little bit more color on the clubs they are rolling out for next year. You talked about The Palms. What is going on with the club in Shanghai?
Linda Harvard (Executive Vice President, Finance and Operations and Chief Financial Officer)
At this time, we are working through the permitting process so I don’t know what the date will be. But you will remember that the estimate we gave of $5 million annual incremental royalty benefit to the company from the two projects was 80% from Las Vegas so that is obviously the larger of the opportunities and that will be open this year.
Shanghai also came up in a conference call last May:
Now, Shanghai we all understand does not allow gaming, but the extraordinary significance of the Chinese market. …explosive growth there in our branded consumer products, the club market as it exists in Shanghai, and the availability of really strong participators with the financing and operating capability convinced me that I would make an exception for Shanghai.
The fact that Shanghai does not allow gaming might come as a surprise to analyst David Bank, who had this to say in a recent CNNMoney.com story:
For example, Bank estimates that in its first full year of operation the Playboy casino at the Palms could bring in about $5 million in sales to Playboy and that the company should generate about $4 million in gross profit from the casino.
“This is a fantastic deal. There are virtually no operating expenses for Playboy. They are just giving out their name,” said Bank, adding that if the casino at the Palms is a success, he would not be surprised to see Playboy do similar deals in London as well with casino operators in Macau and Shanghai, China.
Shanghaiist, personally, would prefer a casino to a Playboy club any day.