LAS VEGAS — The parent company of Rick’s Cabaret furloughed more than 1,900 employees once the COVID-19 pandemic forced stay-at-home directives last month in every state of the union.
RCI Hospitality Holdings Inc., in a filing with the Securities and Exchange Commission, also said that it reduced pay of about 100 remaining employees to 75 percent of previous levels with plans to drop to 50 percent should closings last through the end of May.
RCI Hospitality operates more than 40 adult entertainment clubs in New York, Miami, Charlotte, Dallas, Chicago, Pittsburgh, Houston, Minneapolis, St. Louis and other markets under brand names such as Rick's Cabaret, XTC, Club Onyx, Vivid Cabaret, Jaguars, Tootsie's Cabaret and Scarlett's Cabaret. It also operates sports bars and restaurants under the brand name Bombshells Restaurant & Bar.
The announcement on furloughs at its clubs that feature topless entertainment and dining will offer “significant cost-savings,” according to Eric Langan, who leads the company as president and CEO.
Langan noted that as a result of the pandemic’s disruption, the company obtained three-month payment deferrals from both of its major lenders and deferral agreements with others and some of the landlords in the small number of locations where the company pays rent.
He said that the adult nightclub company also is filing business interruption insurance claims.
“Following state and local mandates regarding bars and restaurants, our subsidiaries closed all locations in the third week of March to protect guests, staff, entertainers and our communities,” Langan said.
Because of “strong sales during the first 10 weeks of the second quarter of 2020 and our subsidiaries’ ability to begin reducing costs, we believe we ended March with sufficient working capital on hand to fund operations into July without additional borrowings."
“We plan to be ready to reopen all locations as soon as possible when allowed to do so,” said Langan, who noted that the second quarter yielded a 5.6 percent increase in year-ago same-club sales.
