New mall isn't helping Primadonna Resorts

Noting Primadonna stock has fallen about 40 percent in the past several weeks, Turner said the disappointing results reveal a "fundamental flaw" in the theory that the mall would help boost volume at Primadonna's three casinos at I-15 and the Nevada-California border.

"Our concern has always been that providing a core customer whose length of stay is already measured in hours (rather than days) with a large shopping experience had a reasonable chance of siphoning customer time and money from the assets owned by the company," Turner said in a recent research report. "Under our scenario, it is the casino which we thought would feed the mall, rather than the inverse."

The fashion outlet mall, which isn't owned by Primadonna, has drawn far fewer customers than originally anticipated. And company executives acknowledged that the mall "does not appear to be generating the stimulative impact to the Primadonna casino complex that they had hoped for," Turner said.

He estimates Primadonna's earnings per share will fall to 69 cents in 1998 and 50 cents in 1999, compared with $1.13 in 1997. Company executives were unavailable for comment this morning.

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