FREE Sign upLogin
SLS Las Vegas net loss reaches $48.6 million in second quarter

SLS Las Vegas net loss reaches $48.6 million in second quarter

The SLS Las Vegas suffered a net loss of more than $48.6 million in the second quarter and has lost more than $83.9 million in the first six months of the year, according to a recent securities filing.

Stockbridge/SBE Investment Co., which owns the Strip resort, said in the filing with the Securities and Exchange Commission that the SLS has "has incurred net losses and negative operating cash flows for the six months ended June 30."

San Francisco-based Stockbridge Capital Partners, the private equity firm that owns 90 percent of the company, said it has funded capital contributions to the hotel-casino totaling more than $28.1 million through June 30.

According to the SEC filing, after the quarter ended, Stockbridge made three additional capital contributions to the SLS Las Vegas to fund operations between July 9 and Aug. 6, totaling $13 million.

Stockbridge said in the SEC filing it intends to provide SLS Las Vegas with "sufficient funds" through Dec. 31 to meet the property's obligations.

"(Stockbridge/SBE Investment) has initiated certain actions to increase revenues and reduce expenses in order to improve the results of operations, and the company intends to initiate further actions in 2015 to improve profitability of (SLS Las Vegas)," Stockbridge said in the SEC filing. "However, there can be no assurance that such actions will be effective."

SLS Las Vegas opened a year ago as a $415 million renovation of the former Rat Pack-era Sahara, which closed in 2011.

SLS President Scott Kreeger said Stockbridge was committed to the "long haul" future of the resort.

He said the biggest challenge still facing the resort is its isolated the north Strip location. Kreeger said construction of the Luck Dragon Casino on Sahara Boulevard will help drive additional customer traffic to the area.

"There are some fundamental business model changes we need to make on the property," Kreeger said. "We have plans in place and we're moving forward."

He said the SLS managers plan to turn the Life nightclub into a live music venue and are bringing in a third-party operator to manage the facility. Also, the he said the second floor buffet area, which closed last year, is being looked at for additional meeting space.

Property operators hoped May's Rock in Rio music festival — held on grounds across the Strip from the resort — would have provided a boost in quarterly results. However, net revenue declined slightly between the second and first quarter while the net loss grew from $35.3 million in the first quarter.

"We think it brought people through and introduced them to the property," Kreeger said.

In the SEC quarterly filing, Stockbridge/SBE said total revenue between April and June was $36.9 million, which included $9.5 million in casino revenue, $13.1 million in hotel revenue, and $16 million in food and beverage revenue.

"We continue to focus our efforts on increasing the level of table game play at the property and increasing the volume of slot play through leveraging The Code (player rewards) program and building our database of table game and slot customers during the initial ramp up period for the property," the company said in the SEC filing.

The SLS Las Vegas has publicly traded debt, which requires quarterly SEC filings.

Stockbridge/SBE said hotel revenue benefited from the property's listing within the Hilton Worldwide Holdings as part of the Curio Collection. Kreeger said the property is looking at other hotel partners to help drive increased room reservations.

Los Angeles-based nightclub operator SBE Entertainment owns the other 10 percent of the SLS.


http://www.reviewjournal.com/business/casinos-gaming/sls-las-vegas-net-loss-reaches-486-million-second-quarter

Mentions

States

  • Nevada

Subscribe for News

Site Digest

Categories


Securities Disclaimer

This website is for informational purposes only and does not constitute an offer or solicitation to sell shares or securities. Any such offer or solicitation will be made only by means of an investment's confidential Offering Memorandum and in accordance with the terms of all applicable securities and other laws. This website does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or any invitation to offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in any connection with, any contract or commitment whatsoever. EB5Projects.com LLC and its affiliates expressly disclaim any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any information contained in the website, (ii) any error, omission or inaccuracy in any such information or (iii) any action resulting therefrom.