Tamara Gordon, Business Reporter
KLE Group is hoping a shift in its marketing strategy to reflect tailored products and events will bring a turnaround in the group's loss-making run.
Chief Executive Officer Gary Matalon said Wednesday that a "renewed brand" and cost-cutting measures in the current financial year should result in better returns for 2014.
"What we have done, and especially since the establishment of Famous, is we now have these venues that are ideal for events that are really attracting a lot of people, so we are doing a lot of live events to cater to specific demands," Matalon told Sunday Business following the company's annual general meeting.
He said the retooled marketing strategy is informed by "on the ground research" to yield consumer needs in order to better suit the now scarce customers KLE continues to fight for.
Revenue continues to climb at the entertainment company, but expenses are climbing faster, leading to a loss of J$36 million at half-year (HY) June 2013. Last year, the company lost J$13 million for the full annual period.
KLE's turnover amounted to J$147 million at half year, or J$14 million better than the intake at HY2012.
"Things that have impacted us, in particular in the nightclub business, as well as in the casual dining business, is that there has been an influx of competitors, specifically over the course of the last eight to 10 months," Matalon said.
"We have seen double-digit entrants into the market, we have seen this happen in the business before but never quite to this extent."
Many of the new entrants don't have cover charges and are discounting heavily, he said.
The competition for customers has also affected the group's ability to raise sponsorship dollars, which Matalon said is a significant revenue stream for the group.
To that end, "We are doing a lot of work with the customer insight (obtained) and really trying to tailor our offerings to respond directly to the consumer demands," he said.
The upcoming Heroes of Dancehall event, set for the weekend preceding National Heroes Day at the newly opened Famous nightclub, was inspired by market research.
The company also offers weekly karaoke sessions at Usain Bolt's Tracks & Records (UBTR) as well as promotions to "bring in the crowd" in the lull periods "between lunch and dinner times" to ramp up revenue.
UBTR continues to be one of the strongest revenue earners for the group; Famous which opened in May, has "great potential", Matalon said.
"We have had great success in very recent times with customer-appreciation events staged at Fiction, he said. There is no entrance for Freedom Fridays, for example.
"We are looking to shape the offerings to be more competitive" in the face of "the difficulty faced competing with the new entrants and their discounted offerings," Matalon said.
"The market is just a finite market, and with the overall challenges and the diminished spending power of individuals, we have to really segment our communications and our executions to be able to generate the most activity that we can."
The group has also renegotiated some of its lease agreements and reduced its workforce to cut operational costs.
"As part of the overall cost-cutting exercise, we've had to go to our landlords whom we have worked with very well over the years and try and see if we can get more favourable terms with them. We have been successful in a couple of instances and that has worked very well for us," Matalon said.
KLE operates UBTR, Fiction and Famous nightclubs as well as the Odyssey gaming lounges in partnership with Supreme Ventures Limited.