business

Could Bowling Strike Big in Times Square?

 
By Lauren Coleman-Lochner and Jason Kelly
     Nov. 18 (Bloomberg BusinessWeek) -- In 1997, Tom Shannon
dropped $3,000 of his own money and $2 million cobbled together
from business loans to buy a 60-year-old Greenwich Village
bowling alley. A little more than a decade later, he's standing
in what was once The New York Times newsroom, contemplating a far
bigger bet: a $23 million, 50-lane bowling alley where he hopes
corporate partygoers, tourists, and locals will spend loads of
time and money.
     As he gears up for a mid-November opening, the balding,
gregarious Shannon leads a tour of what is still very much a
construction site. He points out a sign featuring the alley's new
25-foot-tall neon mascot, "Bowlmor Bob," who will hang above 44th
Street swinging a three-foot bowling ball back and forth. Once
inside, customers will traverse a staircase built to resemble the
Brooklyn Bridge to reach seven distinct areas representing
various New York neighborhoods or themes. There's Central Park,
with stone arches and trellises; a series of seedy storefronts
that evoke the old Times Square; and a handful of black-floored
lanes in the "Warhol" zone. There's plenty of detail, from the
giant gong for Chinatown to the fake rats in the subway section.
     A native of the Washington (D.C.) area, Shannon veered away
from a planned career as an academic or diplomat to earn an MBA
and nurture his entrepreneurial streak. Arriving in New York in
1993, he muddled through by selling gym memberships and doing odd
jobs. "I moved to the city as a single guy with no job," he says.
"I didn't really have much downside risk to failure because I was
already broke."
     In the mid-1990s, Shannon discovered the original Bowlmor, a
family-owned alley in New York's Greenwich Village. When he got
word that the family wanted to sell the unprofitable operation,
Shannon pounced. Once in charge, he raised prices on shoes and
games and began an overhaul that quadrupled in cost, to $2
million, leaving the company with little working capital. "We
renovated during the day, we cleaned up, and we opened for
business at 5 o'clock the first 18 months," he says.
     The lanes quickly became profitable, drawing locals along
with law firms, investment banks, and other companies that used
it for parties. Today, half the revenues from the Greenwich
Village lanes come from corporate events. Shannon opened five
more branches in California and elsewhere, but he always had his
eye on a bigger Manhattan location. In 2008 he sold a minority
interest in Bowlmor to private equity firm Goode Partners for $15
million. Shannon used the cash in part to fund his long-planned
incursion into Times Square, which he expects will push the
company's revenues north of $60 million in 2011, from about $40
million this year. The new location "is going to take the bowling
experience to a whole different level," says Goode co-founder
David Oddi.
     Shannon has thrown his share of gutter balls. A business
school colleague hired as Bowlmor's first chief financial officer
chafed at the startup's restricted resources and left after about
six months of what Shannon calls "pervasive friction." And
Shannon took on debt for a Bowlmor that was too upscale for its
Long Island location, requiring a refinancing that ultimately
cost the company about $20 million.
     He expects no such mismatch in Times Square. The complex is
sort of an Epcot of tenpins whose sections mimic the bustle of
New York in a neighborhood that some say shed its own
authenticity with its transformation into a mecca for tourists.
"Before I embarked on this project, I hated Times Square," he
says, recalling the sight of police officers with guns drawn when
he first ventured there in the early 1990s. His disdain grew when
Times Square went to the opposite extreme, becoming home to the
likes of M&M's, Disney, and Olive Garden (DRI). He sees Bowlmor
as a return to the neighborhood's heyday of vaudeville, cabaret,
and burlesque. "We're taking our place," he says, "in the history
of that spectacle."
      The bottom line: Entrepreneur Tom Shannon is betting a $23
million bowling alley in Times Square will become a hot location
for corporate events.
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