Sheri’s Cabaret goes t*ts up
Topless club files for Chapter 11 amid mounting financial woes
Wed, Jan 6, 2010 (2:58 p.m.)
Blame the economy, heightened competition and slackening tourist traffic. It seems even a pair of bare breasts can’t pay the bills these days.
Last month Las Vegas topless club Sheri’s Cabaret filed for Chapter 11 reorganization and has proposed to reorganize by temporarily lowering its mortgage payments to two banks. Owner Sutter Street Investments LLC filed for reorganization Dec. 21. A sister company that owns the Sheri's building, Highland Street Group LLC, had filed for bankruptcy Sept. 22.
Located on Highland Drive just south of West Sahara Avenue, Sheri’s is comprised of a large room with a semi-circular stage that holds dancers who swing around a pair of stripper poles. Rooms for private dances are also available, and according to a court filing by David Frank, manager of Resort Entertainment Companies LLC, a Las Vegas company that manages Sutter Street, the club employs 17 people — not counting exotic dancers who are independent contractors.
Frank said in his court filing that Sheri's has been operating since 2003 and in 2005 agreed to pay rent to Highland of $30,000 per month. Those payments were manageable until recently, when the club’s traffic sank and, along with it, its profits. Now, even the partially clad dancers can’t bring in enough clients to stay in the black.
"The debtor’s operation of the cabaret business was successful for the first four years of its operation. However, as a result of the current economic downturn and increasingly aggressive competition in the cabaret industry, business during the past two years has been slow and revenues have been reduced. This has resulted in reduced customer traffic and the debtor’s profitability has decreased," Frank said in his filing. "However, the debtor’s obligations have remained the same or have increased. With its current revenues the debtor is still able to meet most its financial obligations, with the exception of its monthly rent to Highland and certain other large non-recurring obligations.
His filing also noted that Sheri's generates $20,000 to $26,000 per week in gross income.
Creditors of Sheri's and Highland Street have not yet filed their responses to the reorganization plan, which was proposed Dec. 21.