Can a seafood chain become the eatertainment leader? Landry's Restaurants (NYSE:LNY) was a surprise choice when it gobbled up Rainforest Cafe in a $125 million deal six years ago. Apparently it's hungry for more: The company is buying an 80% stake in T-Rex.
The first T-Rex will open in Kansas City in a few weeks, with a second location slated to open at the Downtown Disney resort in Orlando by early 2008. The concept finds guests dining alongside life-sized audioanimatronic critters and cascading waterfalls in various themed sections. A large gift shop will also make sure kids have all the prehistoric toys and souvenirs that willing parents can buy.
If this sounds a lot like Rainforest Cafe, it should. It's the handiwork of Rainforest Cafe founder Steven Schussler. For those who don't know the restaurant's story, Schussler etched a chapter in themed eatery lore in trying to get his first concept off the ground. Schussler tricked out his home -- complete with birds and a live monkey -- until he found someone willing to bankroll his vision for Rainforest Cafe.
It was a gamble, and he found himself the right gambler when Grand Casino chief Lyle Berman was ultimately won over. After the first unit was a smash hit in Minneapolis, and the company's IPO hit the ground running, Disney (NYSE:DIS) took an interest and contracted the concept to a pair of restaurants for its massive Florida theme park property.
Disney ultimately added a third location, this time at its Disneyland resort in California. The three Disney locations are huge, generating a total $80 million a year in sales. That's a figure, per restaurant, that is roughly three times greater than even the high volume chains like Cheesecake Factory (NASDAQ:CAKE) and P.F. Chang's (NASDAQ:PFCB) are generating.
I spent some time with Schussler when the company opened its first Disney location 10 years ago. He was everything you would expect from someone willing to remodel their home to prove that an outlandish concept can fly. He had a knack for the finer details. He was passionate about making sure that the food quality was there to win back the repeat visitor after the first curious experience.
Schussler has become an unofficial imagineer, it seems. It's not just T-Rex going into the Disney entertainment district. Schussler's other new concept, Asia, is a full-service eatery that will be going up adjacent to the new Expedition Everest roller coaster next year. Landry's is buying a majority stake in that project too.
Themed concepts are clearly not dead. Planet Hollywood's failure feeds that notion and it's not necessarily fair. Rank Group's (NASDAQ:RANKF) Hard Rock Cafe concept now has 120 restaurants and 13 hotel-casinos worldwide. Landry's is obviously fond enough of Rainforest Cafe to dig deeper into Schussler's bag of tricked-up eateries.
That's it. I'm going to have to talk to David and Tom about opening up that Fool Cafe once and for all!
Longtime Fool contributor Rick Munarriz has eaten at all of the existing themed chains mentioned in this story. He owns shares in Disney and Cheesecake Factory. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
