Crazy Horse Too in Crazy Transition

[Update 8/29: Crazy Horse Too is closed until further notice.  I’m sorting through the rumors and will report the facts when available.]

Mike Galam, the L.A. entrepreneur who last year bought the legendary Las Vegas topless club, Crazy Horse Too, announced yesterday on Facebook that he is resigning as owner and manager.

In the same message, he says that he’s sold the club to his current Director of Operations, Craig Franze, pending approval by City of Las Vegas Business Licensing. Franze has 20 years experience in the Vegas adult entertainment biz, including nine years at Spearmint Rhino. It’ll be interesting to see what he does with this club.

Time and again, we see successful strip club operators come to Vegas from out-of-town, then find out how difficult it is to do business in the Vegas environment. One club exec explained it to me this way:

“We can’t survive on the locals market. We have to get our share of the tourists, and tourists arrive in taxis. Cabbies charge us $60 a head for dropping off fares. If we don’t pay it, they steer them to a club that will pay.

“So, we pay the cabbie $60 then charge the customer $33 to get in. We’re still down $30, because three bucks of what the customer pays goes directly to the new entertainment tax that was imposed on us last year. The customer’s ticked off because the strip clubs back home don’t cost that much. Then, he finds out how much a beer is and he thinks we’re screwing him.

“So he nurses one beer for forty-five minutes, maybe tips a few bucks at the stage, then leaves, feeling ripped off. He’s already spent more than fifty bucks including the cab fares and all he got was a Bud Light.

“We feel screwed because we paid sixty bucks to get the guy in our door, so we’re out money on the deal too. The only one who made money on the deal was the cabbie. This is why you’re drinking a twelve dollar beer. You’re helping us pay the cabbie.”

Gold Club, another successful national chain that opened a club here in March and closed in June, had the same problem. They spent a lot of money refurbishing a beautiful property inside and out, then couldn’t afford to “buy” customers from the cabbies.

Even the deepest pockets can’t assure a club’s success. Rick’s Cabaret, one of the most successful of the big chains, was often filled with customers but couldn’t make a profit. Rick’s packed up at the height of the taxi wars, when the cabbies were charging a spiff of $100+ per head.

The scary numbers:  According to the Las Vegas Convention and Visitors Authority, the average visitor to Las Vegas  in 2013 spent $58.68 on local transportation (predominantly cab fare) and $38.45 on shows, sightseeing and non-gambling entertainment. That’s down more than 15% from the previous year, and it’s less than half what the average visitor had to spend in 2007.  The economy is still bad for most people.

In order to stretch their vacation dollars, most Vegas visitors are now going to free shows. There are a lot of free lounge acts in casinos, plus bands on Fremont Street. This is what the strip clubs are up against. In some cities, a customer with $100 to spend on an evening in a strip club can have a good time. In Vegas, if you’re taking cabs, don’t expect to get a lot of lap dances.

Take the Free Club Limo and Have More Money in Your Pocket to Have More Fun

The best thing that could happen to strip club aficionados in Las Vegas would be for more visitors who want to enjoy our strip clubs to call the clubs for a free limo pickup. Most of the major strip clubs in this town will pick you up and bring you to their club and allow you free entry (waiving the $33 cover charge) for taking their limo, and return you to your hotel when you want to go back. Some have even better deals, including free drinks.

There are no strings attached to this deal.  The clubs aren’t offering this service because they’re nice guys. It’s cheaper for them to provide you with transportation in their limo and let you in free than it is for them to pay a cabbie $60 a head for dropping you off. They want you to arrive at their club with more money in your pocket (and so do the dancers), so take advantage of it.

I’m pleased that Crazy Horse Too is not closing and that a local insider who knows the business is taking it over. I’ll get in there soon to see if any significant changes are being made from the customers’ perspective.

[Update 8/29: Crazy Horse Too is closed until further notice.]

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