Pink Elephant Continues to Multiply with Strategic PartnershipsMay 14, 2013 By: Steve Lewis
Nightclubs come and go and on that rare occasion they are able to expand into new and varying markets. My favorite name of any place ever is Pink Elephant - a happy vision of insane bliss that always puts a smile on my face. David Sarner is the CEO and Founder of the Pink Elephant an international hospitality group with projects in South America, Asia, Miami, New York and soon the Hamptons. Although his brand is hitting these markets it has so far decided to passed on Vegas.
David is always moving forward and his analytical approach to customer service helped turn bottle service from an occasional thing to a requirement. He doesn't rest on his laurels, so expect the unexpected as well as the expected great service and beautiful, sharp crowd. His good guy approach to the business has taken him far...and wide. The brand will expand once again and it couldn't happen to a nicer guy. We caught up with David to get the inside scoop on the new venue.
Nightclub & Bar (NCB): The Pink Elephant brand is gearing up for the world cup and Olympics in Brazil. Tell me about your South American clientele, how you developed these connections over the years and the similarities between NYC club culture and South American club culture.
David Sarner: I have just returned from Brazil where we opened our fourth Pink Elephant nightclub. Brazil is such an exciting place to do business with the approaching World Cup and Olympics. There is a certain of level of excitement in the air, the economy is growing rapidly and people are going out at a greater level than I've seen since we opened our first Pink Elephant there in 2008.
The Brazilians have always been tremendous partiers, a great zest for life, and this has allowed us to grow at a pretty rapid pace. In fact, we just signed a deal to do five more locations in the North with one group, and a few other locations in the South. We have taken a two pronged approach to expansion there, where we own and operate our own locations in the major cities, and franchise the brand in the smaller cities.
Years ago, I had a nightclub called Chaos in New York and Miami. We used to get a tremendous amount of Brazilian customers. They were always the heartiest partiers and they completely got our focus on House Music. After a number of years, we had built up a great reputation, a large customer base and we decided to expand our brand into Sao Paolo. The single biggest step in that direction was in finding the right local partners. We had developed a tremendous bond and level of respect for a Brazilian businessman named Giuliano de Luca, and he remains our partner to this day. He's just one of those people who completely gets it and sees things that no one else sees – a visionary really. With him we have also launched on a series of large scale outdoor EDM events utilizing the Pink Elephant brand that have been tremendous.
NCB: Tell me about the expansion into Miami and the collaborations planned.
Sarner: As I mentioned, we had a nightclub chain called Chaos, which was one of the hottest clubs in Miami for many years. It was just one of those rooms that worked from day one. I fell in love with Miami; it's such a great melting pot and international cross roads. The cultural diversity is something that translates into the clubs, and that makes for an amazing mix of people and excitement. The city has fantastic weather and because it is a destination location, when people visit, they tend to go out every night and party hard. It's like Vegas in many ways, except for the gambling, although that will change very soon. Therefore, it became especially important to gain a foothold, because when the Casinos open, the town is going to explode.
Anyway, I have wanted to get back to Miami for some time, but as always, it's about finding the right location and the right partners. We finally found an amazing location in the Downtown area right next to Space. What we really like about the location is that it's on a tiny two block stretch that is zoned for 24 hour licensing, so we never have to close. It's the only area in all of Miami that's zoned that way, and there are only a few licenses available, so, when this came up, we jumped on it.
And on the Partnership end, the building was just too big for us alone. Pink Elephant has always been geared towards being VIP style intimate venues that hold anywhere from 300 - 500 people. That's our model and we don't want to shift away from it. You know, as they say, if it ain't broke don't fix it! So, we had all this square footage, about 20,000 sq. ft. and a roof deck, and we started looking for partners that would be a great compliment and have synergies and economies of scale. We really feel that we have that with A Love and Rob T. They have an amazing EDM brand with amazing reach throughout Europe, especially with DJ's, and we both felt it would be a great fit.
NCB: All this and Asia too! What are you doing there and what are the differences and similarities to the US markets?
Sarner: Asia is the future. Actually, it's the present and the future. The entire world’s economic center of gravity is shifting from the Atlantic Ocean to the Pacific and especially the Indian Ocean. This area has seen tremendous growth over the past 20 years and the levels of infrastructure and hospitality are growing in leaps and bounds. Since the economic crisis in 2008, I have been spending more and more time over there doing market research, understanding the enormous variety of cultures and making connections. You really have to have the right partnerships in business, and in life, and that takes time. Even though a lot of our locations outside of the US are Franchises, you still need to insure that your Franchisee's understand the business, have the connections, resources, staying power and the vision to ensure that each location is a success and follows in your footsteps.
Asia has this great mystique, it now had tremendous wealth, and with that disposable income to spend on luxury goods and entertainment, and it has something else that I really like, and that's a diversity that I enjoying being in. It so important that you actually enjoy being where your businesses are located. I mean, work should be enjoyable right? So much of one’s life is spent working, so if it's in a place that you don't like, you will never want to be there. I can't tell you how many people we turn down to be Franchisees because they are located in cities and countries I don't want to spend time in. For me, I want to support all my locations and be there multiple times per year, doing events, reviewing operations, helping our local partners and I won't do that in a place I don't want to spend time in.
That said, not all Asian markets are the same. In fact, they are highly different, but there are cities that have a great club scene. Typically they are the financial capitals that not unsurprisingly have great ex-pat communities. I think in part that it's these ex-pats that bring the EDM culture with them from Europe and US to places like Hong Kong, Shanghai, Bangkok, Jakarta, Singapore, and Tokyo. So to some degree, it's the Europeans that are the catalyst, but the local populations pick up and take over pretty quickly.
It's funny, one of the reasons I have always focused on European House Music is due to a philosophy that a great mentor of mine instilled in me years ago. His name was Howard Stein and he had a chain of clubs called Au Bar. Au Bar used to slam every night of the week, it was incredible. There was a great mix of wealthy people from all over the world. When I asked him about the clientele and how they came every night, he told me that he targeted crowds that are largely ex-pat, because when you visit a country, or work in a country for a year, as many of these European finance guys do, you go out every night. Pretty smart. He was also one of the first people I ever saw to allow someone to have a bottle on their table, although in a limited manner, usually a bottle of expensive whiskey that would be returned and held by the house until the next time. So my take away from him was to find financial markets in greatly diverse towns with large ex-pat communities, and that fits Asia to a tee.
NCB: All this and no Vegas... why?
Sarner: I love Vegas for its scale, level of overindulgence and the machine that it has become. It's truly impressive to see. I have been going to Vegas since 2000, and have looked at numerous properties for a Pink Elephant over the years. However, like everything in life, it has to be the right fit, or at least seem to be the right fit going in. I have actually had a number of leases in a number of hotels, but each time, there was some element or elements that were not right. And as they say, the deal you never did never killed you.
The thing that I like about Vegas nightlife and that at present keeps me out of Vegas is the scale of venue and the enormity of financial undertaking that is underway. Vegas has these mega machines that destroy competitors, mainly through the monopolization of DJ talent. It's a game of one upsmanship funded by big players with deep pockets. When you have hotels or operators willing to pay DJ's millions of dollars per year for exclusives, well, it just boxes out competition. Who would want to try to compete with any number of groups willing to spend 100,000 or 200,000 a night on headliner entertainment?
So at this juncture it's a waiting game until this current cycle ends. In Vegas the paradigm shifts about every 24 - 36 months. At some point, the shift will be back to smaller more intimate venues with a higher quality of clientele. When the polish is off the apple, and a top DJ's monthly residency becomes common place, people will look for new experiences. That's one reason I'm looking forward to seeing the new Light with the Cirque de Soleil partnership. Nightlife needs to evolve and become more immersive. That's why places like The Act are so interesting to me, because there is spectacle and customer engagement.
NCB: How do you control quality of the brand over such great distances and in so many locations?
Sarner: We try to ensure that there is cohesiveness to our locations worldwide. Our Pink Elephant DNA has very specific elements to it that we both instill and enforce with our Franchisee partners. We first develop relationships, perform due diligence, and make sure that there is a meeting of the minds with potential groups. In most cases we look for seasoned nightlife or hospitality operators that have a great track record. Then we are engaged throughout the entire process of concept, design development, construction, sound and light installation and programming and staff training. Then we make periodic visits to locations, usually 3-4 times per year to evaluate and make suggestions, as well as to produce events. There is a constant weekly dialogue and we offer back of house support and analysis to tweak operations and marketing.
NCB: You were there at the beginning of the bottle culture. What is different about it today than back in the day and where is the table culture going?
Sarner: I think that as long as it remains legal to provide bottle service, it will stick around. It's evolved to a point where it's an industry standard, and given the economics of real estate, namely the high price for rent, it's a very effective means to generating higher revenues in a smaller amount of space. I think from the customer side, people are always willing to pay more to be in a better location with better views and proximity to the action. Think of sports, concerts, and theater, people will pay more to be closer, plain and simple. What's surprising to me is not that we were the first to make it mandatory, back at Chaos in 1996, but that nobody had done it sooner. Of course, we never imagined that it would grow into the ostentatious display of extravagance that it is today.
NCB: Pink Elephant is my favorite name ever. How did the name come about?
Sarner: Thank you. Well, I have always been focused on branding, and the amounts of money that corporations expend to burn their logos into people's subconscious. Images like Nike, Coke Cola and Shell. They spend billions and billions of dollars in advertising. I wanted to have that kind of iconic imagery, where the mind sees it and automatically translates it’s on the subconscious level. I also loved the Apple logo because of its simplicity and because it is what the name says. So it's hard to find things that stick out and resonate. I have always loved the Black Dog in Nantucket. Even if you have never been, and it's really not much of a place, you know what it is when you see it, so, I started thinking about colors and animals, and Pink Elephant popped into my mind because it's such a unique name, it stands out and it is what people see, a Pink Elephant. And amazingly, it has this wonderful drinking reference too. It's a euphemism for when someone starts hallucinating and seeing pink elephants dancing in their brain. So it fit on so many levels and became this carefree creature that was whimsical and happy, and that's what we want to convey to our customers and to the world, this happy carefree exuberance for life and celebration.
NCB: We hear you are going back to the Hampton's? Tell us about this endeavor.
Sarner: The Hamptons for us was one of our first exotic pop up locations, before St. Barth, Cannes and Punta del Este. It was essentially Pink Elephant at the beach. My partner Robert Montwaid and I decided to take the show on the road and export Pink Elephant from the cities to beachside resort communities. Actually, it was our customer base that wanted to bring it with them when they travelled. So we had a permanent summer location in Southampton for about five years that was amazing. It was a pared down version of our New York location, but it had a certain relaxed level of fun and sophistication that embodied the brand and our clientele. So this year marks the return of Pink Elephant to the Hamptons, this time to East Hampton to the venue that formally housed Beau Marche. We're super excited.
NCB: Other than Asia and South America, are there other locations you would like to see Pink Elephant in?
Sarner: Absolutely, we are currently searching for the right partner in the Middle East, and there are certain cities in Europe that we would love to be in. Again, it's all about the partners and franchisees, that's the critical component for us.
NCB: Sounds like you're time is completely taken up with Pink Elephant is there time for anything else?
Sarner: Actually, one of the fun things I am doing right now is to locate opportunities for other western brands to partner them up with groups overseas, and not just in nightlife, but in restaurants and other forms of hospitality as well. The network that I've been developing has a great need for numerous concepts for different niches, so I've been working to position various brands within specific markets, especially in Asia. It’s a win-win-win 'cause I'm out in the field, so to speak, and am connecting people who have limited access otherwise.