Planet Hollywood still seeking a casino stake in Las Vegas

Three months after it filed for bankruptcy, Planet Hollywood International Inc. emerged from bankruptcy protection Friday -- and its founder said the Orlando company still has big plans for Las Vegas.

"We continue to be committed to the area, and we're still evaluating using our trademark for gaming," said Planet Hollywood Chairman and Chief Executive Robert Earl, whose company has made two unsuccessful attempts at developing themed hotel-casinos on the Strip. "We don't have a specific site at the moment, but it will happen. My focus right now is really heads down, getting back to our former strength."

The company's All-Star Cafe on the Las Vegas Strip did not survive the reorganization, and was one of nine properties closed by Planet Hollywood during the three-month period. About 100 people lost their jobs in the Las Vegas closure.

Showcase Mall cancelled the lease, and is now marketing the 36,000 square feet of space, spread across three levels of the mall. Barry Fieldman, a general partner in the joint venture that owns the mall, said the mall is close to signing a new tenant for the space.

But Planet Hollywood's flagship restaurant on the Strip, in the Forum Shops at Caesars, still has 300 employees, and is in the top five of Planet Hollywood's 30 outlets in terms of performance.

"(Las Vegas) is not up to its all-time best performance, but we see no reason it can't get back to that," Earl said in a telephone interview. "It's coming back there quite well.

"We did a survey a year ago in Las Vegas. Consumers told us, 'We had a great experience, we'll be back again.' But they visit Vegas three times a year, so they visit other restaurants."

To boost business at the site, Planet Hollywood is trying to coordinate its efforts with tour companies in an attempt to steer traffic to its restaurant. It also plans a Las Vegas media campaign, including billboards, taxi cabs, in-room television advertising.

"The crowd is still there at the Forum Shops," Earl said. "It's one of our most successful stores, and we will continue to put events into it."

Planet Hollywood still hasn't given up on its ambitious plans, first announced more than three years ago, to develop a Planet Hollywood-themed hotel-casino on the Strip. Earl said the company will attempt to find a casino operator on the Strip interested in licensing the brand from Planet Hollywood in exchange for an equity stake. That would keep the company from having to invest capital while it attempts to regain its financial footing.

Planet Hollywood first announced plans to build a themed hotel-casino in 1996, when it contemplated an $830 million, 3,300-room hotel-casino located on Desert Inn's property. At the time, it was a joint venture between Planet Hollywood and ITT Corp., then owner of the Desert Inn.

But ITT was targeted by Hilton Hotels Corp. for a 1997 hostile takeover attempt, and the hotel-casino plans were scrapped.

Just months later, Planet Hollywood tried again, announcing a joint venture with Aladdin Gaming to develop a $250 million, 1,000-room themed hotel-casino adjacent to the new Aladdin hotel-casino, now under construction on the Strip. But Aladdin pulled out of the joint venture in late 1998, as concerns arose that Planet Hollywood would be unable to provide the $41 million investment it had promised.

Despite two previous failed attempts, Earl remains optimistic that Planet Hollywood will try a third time -- and will succeed.

"I feel very comfortable with (gaming)," Earl said. "But the first phase, after exiting bankruptcy, is to just get back to our former success in all the units we have kept open."

The company -- facing the problem of too-few repeat diners at its themed restaurants -- has previously said it does not expect to return to profitability until 2004.

Details were not available Friday on the specifics of the reorganization plan, but the Orlando Sentinel reported that Earl and other investors put an additional $30 million in capital into the company. Holders of $250 million in debt exchanged their debt for new bonds and a minority equity stake.

One major shareholder, Saudi Prince Alwaleed Bin Talal, sliced his stake dramatically, unloading 8.5 million shares for $893,000 over the last few weeks. Alwaleed now holds a 1.7 percent stake, down from 10.1 percent.

Earl retained a majority stake in the company.

The company's bankruptcy filing sent its shares tumbling from the New York Stock Exchange to over-the-counter trading in privately negotiated transactions. The company is now attempting to gain a listing on the Nasdaq exchange, something Earl hopes will occur within a month.

"We have dealt with all of our creditors and we are back in the game," Earl said.