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Non-Tech : RAINFOREST CAFE -- Ignore unavailable to you. Want to Upgrade?

To: Czechsinthemail who wrote (3975)	2/5/1998 2:50:00 AM
From: Dennis Vail	Respond to of 4704

Baird, I'll start trying to answer the easier questions but the total picture will have to wait for tomorrow as I can feel a case of brain fugue coming on. Yes they still have 1.4 million - 545,000 put sold with strikes between $10 and $15 in the first two quarters of 1997 that expire from Feb to Aug of 1998. That's as close as I can pin it for you. Some of the $80-90 million in projected 1998 cap expenditures will be towards 1999 units. They do have earnings accruing also but yes I agree they don't look like they will make it out of 1999 with the current finances. Regarding sales momentum: A big part of the conference was dedicated to RAIN at least articulating that they felt they had problems or ' had room for improvement' in those areas. And talking in general terms of how they would deal with these problems. Although they did say they weren't using the perceived improvements as part of their earnings model. They are doing a new exit poll to gather better data. Good because they definitely need it. And I still didn't hear the River North factor addressed. Of course that could be one of the items for the lets do lunch conferences. Tomorrow I'll deal with the five areas for improvement they stressed. 1) Marketing - Supposedly the number one emphasis in 1998. 2) Better stocking of retail to meet the demographics of the particular mall/tourist trap 3) Lowering construction costs 4) Real estate 5) Operations (eg Enhance retail managemnt) . Well all fine and good but as Woyanne pointed out to me last night nowhere in the conference did anyone mention firing Ucan. So how serious can they be? And of course no new COO/President. Regards, Dennis

To: Czechsinthemail who wrote (3975)	2/8/1998 10:07:00 PM
From: Dennis Vail	Read Replies (1) \| Respond to of 4704

Baird, you wrote: >>Thanks for the recap. Did the conference call address the slow growth of revenues? I have some concern that the company isn't doing a very good job of maintaining sales momentum, which may be a key part of dropping same store sales: people may come back to the restaurant but not buy any retail items.<< Brimmer admitted that marketing wise heretofore RAIN has just placed the Units in high traffic malls and trusted to word of mouth and lots of passersby to generate business. He stressed the #1 initiative this year would be marketing. He feel that there were lots of ways to attract first time customers and to induce them to return. Besides the current kids meal deal he mentioned such things as booking private parties at Animal Kingdom after it closes at 9 PM. They are testing breakfast food now at MGM so its ready for the AK opening but it may stay at MGM as well. They are doing another exit survey on their customers. And they are changing the retail mix at each unit to match its perceived demographics. Thus they've found that at traditional malls the adult attire items do go very well but that toddler clothes and gift items do. At the Mills outlet malls the customers are more price conscious so they plan on cutting back the price and quality of the merchandize. (In other words they spoke of things that should have been apparent a year ago) On another front Brimmer talked about doing a couple MOA sized units this year hoping to get cost of opening a unit down to $4 million and thought that might be the best size in terms of return on investment. Thats one experiment thats going on. He also thought they could cut costs on construction and save 10-15%. (I know why didn't they do this before....Duh...) Brimmer also admitted there were a lot of inefficiencies (overtime, purchasing etc) in putting up all those units in the last quarter. Finally they did hire Steven Cohen (a real estate lawyer) to find the best sites for future units. Again I think they are moving in the right direction. (Of course it would be better to get to the storm cellar before the tornado hit but hey...) Regards, Dennis