Nightclubs vs. Restaurants: Growing a Brand in Philadelphia
When experienced nightlife operators choose the name of a new club, one of the make-or-break factors is whether or not the name can be trademarked. Few are content to have just one successful club. Exporting the brand to other cities and cultures sometimes is the ultimate goal. Increased travel, stress and even business losses can take a toll, but the pot of gold at the end of the rainbow of success is factored in the tens of millions. It takes a cool head, an organized mind and a ton of experience to navigate and manage growth.
Barry Gutin — a partner in Philadelphia’s GuestCounts Hospitality, which owns Cuba Libre Restaurant & Rum Bar, 32˚ Luxe Lounge and Brulee Catering, just to name a few — brings it all. A graduate of Wharton School of Business at the University of Pennsylvania, Gutin brings his vast operator experience as well as his honest nature to the table in every endeavor. Unlike most of his competitors, he understands that the flashy often end up as flashes in the pan. He operates as if every consideration for success can be quantified, purchased or even rented. His track record includes hit after hit. He is a cool operator with an uncanny ability to analyze, adjust and — when necessary — make bold moves. Gutin talked to us about what he is doing and where it all may go.
Nightclub Confidential (NCC): I have always admired your approach to the nightclub business. You have always balanced the numbers game with the romantic side of things. How did a nice guy like you end up in hospitality?
Barry Gutin: My father was a waiter in the Bronx, N.Y., as I was growing up. When I was almost 20, he and my uncle opened a restaurant/nightclub in a brand-new shopping mall in southern New Jersey, just a few minutes from Philadelphia. It was the disco era, and the drinking age was 18 in New Jersey, but 21 in Pennsylvania. It was a great success. I worked in the kitchen during the day, and on the weekend I worked the door, collecting the cover charge. I learned about promotions and marketing from my very creative cousin who had quit his job at a nightclub in Fort Lauderdale to be the nighttime manager at my dad’s spot. While working there, I also commuted to the Wharton School of Business at the University of Pennsylvania. I was not the typical Wharton student. Let’s just say that my disco attire stood out at the Ivy League school. But that’s where I learned the business skills that I have applied to restaurants and nightlife.
NCC: Can you talk about the Philadelphia years? How have you developed your brands and partnerships?
Gutin: After my father retired in 1985, I began managing the largest nightclubs in the Philadelphia area. In the early ‘90s … I started working with my current partner Larry Cohen at Egypt Nightclub. We recognized that there was a new dimension in music and nightlife that was not competitive with Egypt. I was very good at programming and marketing mainstream nightclubs, but didn’t know much about alternative music, the rave and post-rave generation and alternative-lifestyle clubs. That’s about the time that I met (Steve Lewis). The new project became Shampoo … the opening of Shampoo was measurable on the Richter scale. The mega late-night parties we threw changed nightlife in Philadelphia forever.
Since that time, Larry and I made a living out of working with people that know more than us when we go after a niche market. In 2000, we found a spot in a hot neighborhood in Philadelphia and decided upon a Cuban theme. Latin cuisine and pop culture was getting hot, and there was no Cuban restaurant in Philadelphia. We got help from Chef Guillermo Pernot, a James Beard Award winning Latin chef and cookbook author. A year after we opened the first Cuba Libre, we added Latin dancing on Fridays and Saturdays after dinner. Five years later, Guillermo became our partner and has helped us grow Cuba Libre to four locations: Philadelphia, Atlantic City, Orlando and Washington, D.C.
In 2001, we leased a space adjacent to Cuba Libre and created 32° Luxe Lounge, the first bottle-service lounge in Pennsylvania. We had never done bottle service before, so we turned to Freddy Wyatt. Freddy helped us design 32°, and it was a huge success — once again changing nightlife in Philadelphia, popularizing bottle service and small, high-energy lounges. We didn’t create that trend; we just imported it from N.Y. and Miami.
NCC: Restaurants and clubs come with separate sets of problems, rules and opportunities. How do you train your staff to understand the differences between theses two businesses?
Gutin: While Cuba Libre is primarily a restaurant, our two nights of Latin dancing is important to our overall profitability. In each city, we have a nightlife marketing manager who offers unique knowledge of the Latin nightlife scene in their city and acts as the host of the party. While the restaurant and nightlife business are both food and beverage businesses, they couldn’t be more different. Restaurants strive for consistency, while nightclubs die if guests have the same experience over and over. And there is often a significant culture clash at the unit level. Nightlife managers need to be creative to be successful, and creative people often are undisciplined. Over the years, we have learned to manage these creative people, but our restaurant managers often feel that we are being inconsistent in applying our rules. Nightlife guests also present challenges that restaurant managers have not been prepared for in their previous jobs. And not every restaurant manager can handle the very late working hours.
Cuba Libre in Philadelphia.
NCC: Philadelphia is very different club-wise than many major cities. What doesn’t work in Philly, and what works well?
Gutin: Philadelphia is a big city, but a small nightclub market. It seems to only strongly support a few medium-size dance clubs at a time. The few large clubs that are left are mere shadows of their former selves. The economics of the club scene are different. Cover charges, if any, and drink prices are significantly lower than in New York, Miami and even nearby Atlantic City, leading to relatively modest entertainment budgets. And unlike New York and Miami, the power is not vested in independent promoters. The nightclubs are, for the most part, promoting themselves. It is also a relatively early scene with our closing time of 2 a.m. for most clubs; a few after hours-clubs legally stay open until 3 p.m., but don’t get busy until 1 a.m.
NCC: With the Borgata going strong and Revel finally in gear, is Atlantic City poised to be Las Vegas by the ocean?
Gutin: Atlantic City and Las Vegas were at one time, not so long ago, the only two places in the United States with legalized gambling. Atlantic City is now facing gaming competition from all surrounding states. Atlantic City can only survive by enhancing its resort and entertainment offerings. With the multiple casinos and so many entertainment venues, it is a great destination. Revel will add to that significantly. At 5,500 seats, its showroom is the largest concert venue in Atlantic City other than Boardwalk Hall arena. It also has great restaurants and other resort amenities. It has only been open a few weeks, so it is too early to tell if it will be a financial success for its owners, but it will certainly help attract an upscale crowd to Atlantic City.
NCC: Tell me all about the new space. I understand it will be a restaurant but convert into a nightclub late on weekends.
Gutin: Our new restaurant called Square Peg just opened in mid-March. It is a casual American restaurant and bar featuring diner-inspired food and beverage by a chef who is very popular among young foodies. Its fare is kind of “upscale downscale food.” We also have a very inspired beverage program featuring micro-distilled American spirits (lots of bourbons), boutique wines and craft beers. As an extension of our food concept, we have spiked milkshakes. We don’t plan to put in a nightlife program that would include dancing, but to spice thing up at night, we just began our “Bacon and Eggs, Bourbon and Beer” late night happy hour — offering an ever-changing variety of unique bacons and deviled eggs — each for $1. In Pennsylvania, we are limited to 14 hours per week of drink discounting, so we use a total of 12 of those hours during the six nights we feature that program. We do a great deal of promoting for this restaurant, using social media at an advanced level to attract the youngest part of our audience and a publicist to get placements in the traditional media to attract our older demo. We are hitting the streets to develop lasting and fruitful relationships within the neighborhood. It is a little different than promoting a nightclub, but you need the same energy and commitment to be successful.