According to a Feb. 26 story in MarketWatch, strip club stocks are rising on Wall Street.
With upscale gentlemen's club chains such as Rick's Cabaret raking in millions, financial analysts are viewing the strip-club business as a highly profitable, recession-proof investment. In one year, Rick's stock has jumped from a little over $4 to $11.10 as of last week.
In the first quarter of 2007, Rick's reported a 63 percent increase in revenue. The Houston-based chain expects to generate $50 million in revenues this year.
"We have always been in expansion mode, but rather than buy a bunch of other locations we focused our efforts on New York," Eric Langan, chief executive of Rick's Cabaret, told MarketWatch. "The New York club has really helped build our brand name."
The MarketWatch report sees Rick's success as a possible symbol that the "gentlemen's club" business is becoming more mainstream.
"We view [Rick's] as an under-followed, undervalued growth play on the gentleman's club industry," Steven Gart, an analyst with Nickel Investment Capital, told MarketWatch. "With the impressive 2006 performance of Rick's in New York, the company has made a strong, 'can deliver growth' statement to the investment community."
For the full MarketWatch report, click here.
