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Planet Hollywood International, Inc.

 


Address:
Suite 600
7380 Sand Lake Road
Orlando, Florida 32819
U.S.A.

Telephone: (407) 363-7827
Fax: (407) 363-4862


Statistics:
Public Company
Incorporated: 1991
Employees: 6,500
Sales: $270.6 million (1995)
Stock Exchanges: NASDAQ
SICs: 5812 Eating Places; 5399 Miscellaneous Merchandise Stores; 6794 Patent Owners and Lessors


Company History:

Planet Hollywood International, Inc. is the controlling body for a number of different entertainment-based theme restaurants located throughout the world. The company's name reflects its most well-known venture, a chain of approximately 50 "Planet Hollywood" restaurants that offer patrons a chance to dine in the midst of various film and television props and memorabilia. Another restaurant concept controlled by Planet Hollywood International is the more recent "Official All Star Cafe" chain, which centers on professional sports and follows a sports-bar theme. The company also runs the "Marvel Mania" and "Chefs of the World" restaurants. A unique aspect of most Planet Hollywood International ventures is that the investors and owners are typically celebrities, many of whom actually frequent the restaurants and mingle with the customers.

Theme Restaurant Concept Originates in 1972

The first Planet Hollywood restaurant opened in New York City in 1991, but the events leading up to its inception can be traced back almost 20 years earlier. In 1972, a young man by the name of Robert Earl opened a dinner-theater in London called "The Beefeater," which offered customers (mainly tourists) a medieval-themed dining experience. Earl, who had graduated with a degree in hotel and restaurant management from the University of Surrey, possessed a talent for creating entertainment-based restaurant concepts that drew large numbers of customers. He soon developed The Beefeater into a popular local success, which prompted him to open other similar restaurant concepts nearby. In the late-1970s, he created "Talk of London," "Shakespeare's Tavern," and "The Cockney Club," all of which remain operational today.

Although successful in London, Earl saw greater growth potential in the American market, and therefore came to the U.S. in the early-1980s to sell his concepts to the developers of a then-new Disney World attraction called Epcot Center. The deal fell through, but Earl decided to stay in Florida anyway and try his luck in the Orlando restaurant business. He opened a number of theme-restaurants using medieval and Wild West ideas, nurturing his new restaurant group until it was sold to a larger holding company in the mid-1980s.

After changing hands again numerous times, his enterprise landed in the lap of Mecca Leisure, who had just purchased rights to Hard Rock International's eastern region. Hard Rock International was the controlling body for the "Hard Rock Cafe" chain of music-industry-based theme restaurants. In 1989, Mecca appointed Earl as the new chief executive of their portion of the Hard Rock operation, and put him in charge of expanding the chain in the eastern United States.

Within two years, Earl had helped the eastern-region Hard Rock Cafe chain grow from 7 units to 20. It was during that time that Earl met film producer Keith Barish, who would soon become his business partner and the cofounder of Planet Hollywood International, Inc. Earl and Barish shared a belief that music, movies, and sports were capable of transcending all barriers, language and otherwise, between the people of the world. The two men decided to capitalize on the worldwide appeal of the film and television entertainment industry by opening a restaurant based on that theme. Dubbing their creation "Planet Hollywood," Earl and Barish opened the restaurant in New York City in late 1991.

Quick Success in the Early 1990s

Planet Hollywood was immediately successful, drawing crowds that often lined up outside the restaurant for hours in order to get tables. Part of the restaurant's appeal lay in its museum-like quality; a multitude of real film and television costumes, props, and memorabilia made up its decor. The rest of the attraction was attributed to a genius marketing strategy used by the restaurant's founders. They asked celebrities such as Arnold Schwarzenegger, Sylvester Stallone, Bruce Willis, Demi Moore, and Whoopi Goldberg to act as the restaurant's investor/owners. Every once in a while, these celebrities would stop by "their restaurant" to check in and mingle briefly with their fans. Although this was a somewhat rare occurrence, customers still flocked to the restaurant in hopes that they would be one of the lucky few to dine with the stars.

A year after launching Planet Hollywood, Earl left behind his post at Hard Rock and also severed ties to his original theme-restaurant group in Orlando. He and Barish began planning the worldwide introduction of additional Planet Hollywood restaurants, and started by recruiting more celebrity investors for the new locations. Climbing on board were film actors Don Johnson and then-wife Melanie Griffith, director John Hughes, comedienne Roseanne, and actors Tom Arnold, Wesley Snipes, and Danny Glover. By mid-1993, Planet Hollywood International had opened new restaurants in London and southern California, and was completing the construction of a fourth unit in Chicago.

New York City architect David Rockwell was hired by Earl and Barish to design the new units, each of which typically seated over 200 people and contained film props and floor layouts that were unique to their locations. Different items on display throughout the chain included Dorothy's dress from "The Wizard of Oz," the pottery wheel used by Demi Moore and Patrick Swayze in "Ghost," a replica of the castle from "Dracula," the Batmobile, the Flintstone buggy, and a plastic model of the meat slab that was pulverized by Stallone in the film "Rocky." Customers were also treated to celebrity hand print walls and big-screen televisions which played promotional clips for upcoming movies.

Meanwhile, a Hard Rock International executive by the name of Peter Morton filed suit against Earl and Planet Hollywood, alleging that Earl had engaged in the appropriation of trade secrets. Morton, a cofounder of Hard Rock International and the CEO of its western region, believed that Earl's Planet Hollywood chain was a ripoff of the Hard Rock concept. Earl nonchalantly dismissed the charges, however, and the case against Planet Hollywood never amounted to much in court. Furthermore, Morton's complaint did little to deter Planet Hollywood from expanding further, nor did it curb the public's desire to patronize the new and rapidly blossoming chain. Soon Planet Hollywood was known as a worldwide leader in the theme restaurant business.

By the end of 1993, Planet Hollywood had not only opened two new restaurants in Washington, D.C., and Cancun, Mexico, but it had also signed leases for 5 new units in Phoenix, New Orleans, Aspen, Maui, and Minneapolis's "Mall of America" (the largest shopping mall in the United States). Each opening was a gala event, drawing enormous crowds of people to catch a glimpse of the many media personalities who made appearances and celebrated the new successes. But the true test of a new location occurred the day after the "official" opening, at which time a restaurant actually opened its doors to the general public. Without fail, each new Planet Hollywood passed these "tests" with ease, and in the first year of operation most were generating revenues of almost $15 million per unit.

A strong asset of the Planet Hollywood concept was that each unit sold licensed Planet Hollywood merchandise in addition to serving food and drinks. Items of all kinds were sold, from key rings and T-shirts, to sweatshirts, watches, and leather coats. Sales of this merchandise helped boost Planet Hollywood's profit margins considerably above those achieved at other restaurants that relied solely on food items to bring in profits. Merchandise became so popular that within a few years, the company began to open separate retail stores called "Planet Hollywood Superstores," a move which even further increased yearly profits.

The End of the Century and Beyond

In 1994, Planet Hollywood continued its aggressive expansion program, and units continued to open worldwide. The company also began developing additional theme-restaurant ideas, including the concept for the Official All Star Cafe. Acknowledging the success that Planet Hollywood had achieved from drawing upon the public's interest in celebrity life, Earl and Barish decided that the Official All Star Cafe would be the perfect sports-based equivalent. They began recruiting professional sports figures to invest in the concept, drawing in people such as hockey great Wayne Gretzky, football icon Joe Montana, and basketball superstar Shaquille O'Neal. Plans for the new restaurants included a menu of "stadium cuisine" supplemented by home cooking, and sales of professional sports merchandise and souvenirs.

Also in 1994, the company opened what would soon become its highest-grossing Planet Hollywood unit, in Las Vegas. Unlike most previous units, which seated approximately 250 people, the Las Vegas restaurant was designed to seat 500 and was planned by Rockwell so that there would be no "bad" seats. The unit's opening rivaled a sporting event or the Academy Awards in magnitude, in that it drew a crowd of over ten thousand people who packed themselves into stadium-like bleachers nearby to witness the stars' arrivals at the event. Even former President and First Lady George and Barbara Bush were on hand to celebrate. Later that year another 500-seater was opened in Orlando's Disney World, which gave Earl and Barish ownership of the two highest-grossing restaurants in the United States.

At that point, Planet Hollywood was composed of 18 units around the world, and the company was projecting the addition of 17 more during 1995. The Planet Hollywood chain was expanding almost on its own, so Earl decided to begin focusing his attention and energy on other avenues of growth while the chain took care of itself. In August 1995, ground was broken in New York City nearby the original Planet Hollywood, and construction of the first Official All Star Cafe began. Meanwhile, plans were in the works to develop a theme-restaurant chain based on characters from the Marvel Comics series. Also, television game-show producer King World began working with Roseanne Barr's production company on a "Planet Hollywood Squares" television game show, which was to be a revival of the original "Hollywood Squares" from decades past with a new Planet Hollywood twist.

With Planet Hollywood quickly becoming a household name, the company decided to go public in 1996. Not only was stock offered to the public, but the company also convinced MBNA to issue Planet Hollywood VISA credit cards, which gave cardholders priority seating at the restaurants. A joint venture with ITT Corporation was also formed to develop Planet Hollywood casinos in Las Vegas and Atlantic City in the future. Furthermore, Marvel Entertainment Group, Inc. and Planet Hollywood International decided to move ahead with the comic book character-based restaurant concept, calling it "Marvel Mania." Ideas for a new concept called "Chefs of the World," which was to feature a "star-studded" culinary staff, also began to arise.

Some began to wonder whether Planet Hollywood was spreading its resources too thin, and speculations surfaced as to whether the company would be able to continue the growth trend that it had been experiencing for the past five years. Earl maintained ambitious goals to keep the company expanding by 30 to 40 percent each year, in both the number of restaurant locations and in annual revenues. Criticisms of that plan, however, centered on the idea that the more units that were opened, the less unique a customer's experience in patronizing the restaurant chain, which could lead to a drop in sales. Furthermore, theme restaurants were popping up all over the country, providing Earl and Barish with intense competition. The Harley-Davidson Cafe was gaining popularity, as were other concepts such as Robert DeNiro's Tribeca Grill, the Country Star chain (backed by Wynonna Judd, Vince Gill, and Reba McEntire), and the Thunder Roadhouse (backed by Dennis Hopper, Dwight Yoakam, and Peter Fonda).

But Planet Hollywood and the Official All Star Cafe did possess one major advantage over their competition, which was the celebrity endorsement received through stars' ownership and investment in the chains. Many customers thus viewed these restaurants as the "originals." As for continued growth potential, Earl dismissed skepticism with easy confidence. Given that in only 5 years the company had grown from one $3.5 million restaurant in New York to an almost $300 million operation with approximately 50 units spread throughout the world, it seemed to be a safe bet that Planet Hollywood possessed the ability to continue the trend of success into the coming century.





Further Reading:


Ball, Aimee Lee, "Mr. Universe," New York, July 15, 1991, p. 38.
Greenberg, Herb, "Earth to Planet Hollywood," Fortune, December 23, 1996.
Guttman, Monika, "Why the Stars Orbit Planet Hollywood: With Meteoric Growth, the Eateries May Go Public," U.S. News & World Report, November 27, 1995, p. 60.
Hayes, Jack, "Robert Earl: The King of Planet Hollywood Promises the Stars--and He Delivers," Nation's Restaurant News, October 9, 1995, p. 164.
Kapner, Suzanne, "'Starry' Vegas Night Shines on New Planet," Nation's Restaurant News, August 8, 1994, p. 7.
Levine, Joshua, "Hamburgers and Tennis Socks," Forbes, November 20, 1995, p. 184.
Martin, Richard, "Hard Rock Hits Planet Hollywood with Copycat Suit," Nation's Restaurant News, March 16, 1992, p. 3.
McClellan, Steve, "King World Developing 'Planet Hollywood Squares,"' Broadcasting & Cable, September 25, 1995, p. 11.
Miracle, Barbara, "Beyond Planet Hollywood," Florida Trend, December 1993, p. 10.
Papiernik, Richard L., "All Quiet on the Hollywood Front After 'Picture Perfect' IPO," Nation's Restaurant News, May 13, 1996, p. 11.
"Planet Hollywood, Marvel Comics Team for Themer," Nation's Restaurant News, June 6, 1994, p. 2.
Prewitt, Milford, "Robert Earl: CEO Planet Hollywood Inc., Orlando, Florida," Nation's Restaurant News, January 1995, p. 54.
Selinger, Iris Cohen, "Lights! Camera! But Can We Get a Table?" Advertising Age, April 17, 1995, p. 48.
Walkup, Carolyn, "Planet Hollywood Gears to Launch Unit in Chicago," Nation's Restaurant News, July 15, 1993, p. 94.

Source: International Directory of Company Histories, Vol. 18. St. James Press, 1997.




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