SVL cuts food service from business model
Sabrina Gordon, Business Reporter
Supreme Ventures Limited (SVL) has exited the hospitality side of its operation, having closed the restaurants at all its Acropolis and Coral Cliff gaming lounges.
"We have tried several things with the restaurant business, but the challenges remained, operating under a corporate-owned model," said Brian George, president and chief executive officer of SVL.
"There are still a lot of people who still don't know that Acropolis had a restaurant, and also, not everyone is comfortable walking into a gaming lounge to a restaurant. So we have decided to get out of the things that are creating a financial drain on the company," he said.
The restaurant at Acropolis was known as Ambrosia.
SVL's newest gaming room at Market Place, however, will have food service available, but indirectly via partnership with adjoining business Usain Bolt Tracks & Records, operated by KLE Group.
Latest cost-cutting strategy
SVL's divorce from direct involvement in food service is the latest cost-cutting strategy executed by the group to improve the profitability of its gaming/hospitality operations, whose earnings have been waning since 2008.
In its latest nine-month results up to September 2012, the segment recorded revenues of J$71 million, down from the J$90.7 million the previous period.
At the end of the financial year 2011, SVL reported total restaurant and bar sales at J$108.16 million, which represents a 9.09 per cent decline from J$118.98 million in 2010.
The restaurants at Acropolis Barbican and Coral Cliff were closed last Friday.
"The restaurant is a volatile business, especially in the current environment, and it's not unique to us; it's just that we have managed to sustain the losses longer," said George.
With the closure of the business segment, approximately 60 persons have been laid off, costing the company some J$27 million.
SVL operates four branches of the Acropolis gaming lounge from Cross Roads, Portmore, May Pen and Barbican as well as Coral Cliff in Montego Bay.
Its newest investment, The Secret Room, is better situated with entertainment and popular food courts in the same area.
"The partnership with the KLE Group provides major synergies, managing the two opportunities of providing entertainment and allowing people to buy food," he said.
Going forward, George said the company will now focus on its core competence of gaming and is in the process of reconfiguring its lounges to deliver world-class games.
"The board of directors has charged the management team with focusing on our core competence of gaming and realigning operations for optimal efficiency in 2013. The group will, therefore, consolidate its offering to lottery, sports betting and gaming lounges," George said in a stock market filing last week.
Previously in November 2011, SVL also sold its MoneyGram remittance business to Lasco Financial Services Limited, and voluntarily surrendered its cambio licences to the Bank of Jamaica.
"We are stepping back to deepen involvement and focus on gaming and discontinue areas that represent a distraction of resources in segments that are not giving the returns," George said.
The flagship Acropolis gaming lounge was first opened in Barbican back in 2005. Coral Cliff Entertainment Limited was also acquired in December of that year.