UPDATE: As stated in this comment, Shanghaiist was contacted via email by the Director of Sales & Marketing of Shanghai Golden Sands F&B Management Ltd., the company running the two establishments mentioned in this report. He requested that we take the story down and issue a retraction. He also threatened legal action. The author of the post stands by his story, and says his sources included current employees of Trader Vic’s. In his comment below, the Shanghai Golden Sands F&B Management Ltd. spokesman said: “It is absolutely not true the [sic] any of our restaurants are going to close in the future.” We have asked Shanghai Golden Sands F&B Management Ltd. for more to their side of the story, asking which specific statements in the story they would like to refute on record. We will happily add their comments or any official company statement to this post. Stay tuned. Ed.
Trader Vic’s Shanghai is very likely to close down on January 31st, barely 13 months after opening its doors. Poor market research, choice of a very questionable location of extravagant size and arrogant attitude of the Abu Dhabi-based franchise operators are the main reasons why this USD5 million investment will go down the proverbial drain. Frankies, in the same building and opened by the same franchisees, will apparently also go the way of the dodo, but its death knell will occur on 31st December.
The restaurant and bar followed the Trader Vic’s tradition of being lavishly decorated with Polynesian and Pacific island arts and artifacts, and fitted out with the highest quality furniture and cutlery, as well as their unique range of glassware and other unusual drink receptacles- including barrels, bowls, skull mugs and glasses with plastic parrots perched on the rim. The exotic cocktail menu, together with the Trader Vic’s story printed on the back, were something that regular customers, including this scribe, could enjoy reading upon every visit, making us momentarily picture ourselves sipping our cocktails in 1930s Havana or Nassau, complete with Panama hat.
The franchise operators of Trader Vic’s Shanghai is the Al Fahim Group, an Abu Dhabi-based, billion dollar conglomerate with main business lines in hotels, oil engineering and travel. As the group had successfully run two Trader Vic’s restaurants based in 5-star hotels in Dubai, where alcohol consumers have no option but to visit a 5-star hotel, they thought that Shanghai’s expats and local fat cats would swarm through the doors from Day One without the need and without a budget for any advertising. Of course, they were wrong. They had grandiose plans for China: first, a Trader Vic’s in Shanghai, followed by a Tiki Bar on the Bund, then they would open Trader Vic’s in Beijing. Here in Shanghai, one of their senior managers even boasted to other restaurant managers that all Shanghai taxi drivers would quickly learn “Trader Vic’s” name in English and whisk any foreigner there at the mere mention of the name. Not unsurprisingly, that did not happen. After opening in December, and then continuing for most of January and February, there were just a handful of regulars sitting at the bar or in the main dining room, usually outnumbered by the staff, surrounded by dozens of empty chairs in several beautifully decorated empty rooms. Even the 5-girl Cuban band, especially brought all the way to China, were not allowed to perform for the first few months while their work permits were bogged down in red tape, further evidence that not enough preparatory work was done or that not enough ‘baksheesh’ was handed over to the powers that be.
Some changes were made in an effort to bring in the crowds after it was evident that the original plans to cater primarily for business tycoons and diplomatic dignitaries would not bring in the bucks. Drink and food prices were reduced, and a daily happy hour and Thursday specials were introduced. Reluctantly, the Abu Dhabi despots allowed the restaurant to advertise in magazines. Mostly favourable media reports followed, leading to an increasing number of group functions, much to the relief of management. Meanwhile, the cheerful and competent Filipino waitresses continued to endear themselves to the diners and drinkers, while the local staff moped around with their eyes turned to the ceiling. Unfortunately, the improvements that were occurring were happening too little, too late. This was not enough to appease the impatient investors in the UAE.
One of the first lessons foreign trade offices and know-it-all, beard-stroking authors preach to investors at home who are champing at the bit to pour money into China is that getting a return on one’s China investment takes time. These sages also preach that it often takes large amounts of capital just to establish the venture and to make it operational. Although the Abu Dhabi franchisees had no problem with the former, they obviously did not heed the latter. Although on Shanghai’s club scene there have been establishments that have not lasted twelve months, most large-scale foreign F&B venues have persevered beyond the first 12 months, which by the market’s and industry’s nature, is the hardest survival period just in successfully broadcasting one’s existence to the media and monied middle class.
It is therefore a great shame that the ‘black gold backers’ have not been more patient with Trader Vic’s in Shanghai, especially as the same investors have recently opened Trader Vic’s in a busy district of Beijing. Trader Vic’s offers a luxurious, comfortable environment with almost impeccable service, in which even consumers of the most modest means can enjoy a top quality happy hour cocktail or a delicious curry. Once discovered most customers do return. Let’s hope that Trader Vic’s can make a return to Shanghai too, but with more astute advisers and investors than the current myopic capitalists.
And for those of you that want to check out the bar before the shutters come down, you have one month left!
Trader Vic’s – 598 Feng Yang Lu, near Datian Lu and Nanjing Lu
Photo from lubolee
Winopete is Shanghaiist’s resident drunkard. Email tips, recommendations, news and gossip about Shanghai’s bar scene to drink at shanghaiist dot com.