Hard truths: Planet Hollywood stock, which sat at $24 shortly after going public in 1997, is now at 19 cents (yes, cents). Founding partners Arnold, Bruce, Demi, Sly and Whoopi aren’t exactly the hip-kid draws they were at the turn of the decade. And almost any operation that in seven years opens more than 80 restaurants (including ones in Bangkok and Dubai) is bound to have growing pains; PH’s latest was a $228 million loss for the quarter that ended in December 1998. Despite Earl’s rote assertion that "Today is the first step in our plan... for a return to long-term profitability and healthy growth," this planet’s orbit is looking mighty wobbly. Once a fresh update of the Hard Rock Café model, the tourist-trap turf has been invaded by everyone from sports figures (All-Star Café) to bikers (Harley Davidson Café) and wrestlers (the WWF restaurant, coming soon to New York’s legendary Paramount Theater). Does PH’s retreat signal the start of the great eater-tainment shakeout? One can only hope.
Citing suffocating competition in the "eater-tainment" business and its own overaggressive expansion, Planet Hollywood is closing nine U.S. locations ahead of a planned filing for Chapter 11 bankruptcy. Gone are its glittering towers of sterno in Chicago, Houston, Miami, Phoenix, Fort Lauderdale, Indianapolis, Maui, Gurnee, Ill., and Costa Mesa, Calif.; the chain will also upgrade several of its 70-plus remaining restaurants worldwide and revamp its menus, according to CEO Robert Earl. (No more Ramburgers?) The chain is digging deep for the extra cash — its two largest shareholders and a trust for Earl's own children have agreed to pony up $30 million to help keep the company going. Right now, that’s looking like about as good an investment as a big-budget Kevin Costner directorial effort.