Restructuring / Turnaround Strategies Case Study

Hard Rock Café On Sale: Rank To Gamble With Its Future?

Abstract:
In 2006, The Rank Group Plc (Rank) was an international gaming and leisure company, consisting of two major divisions, namely ‘Gaming’ and ‘Hard Rock’. Rank had one of the UK’s leading gaming businesses, and one of the most globally recognised music, entertainment and dining brands, Hard Rock.

Hard Rock Café (HRC) was a chain of casual dining restaurants. It embodied the spirit of rock music through its signature cafes, hotels and casinos; collectible and fashion merchandise; live concerts and performance venues; and the Hard Rock Records music label. In 2005, Hard Rock generated the strongest performance when operating profit increased by 24.7%. In contrast, though the company’s Gaming division represented over 50% of the Group’s operating profit, the division’s operating profit decreased significantly due to various reasons in that year. Despite this, on July 4th, 2006, Rank announced that it would sell its iconic Hard Rock Café chain to concentrate on the gaming business as the British government was expected to relax the strict gambling laws. But analysts felt that the company was gambling with its own future by selling out Hard Rock.

Pedagogical Objectives:

• To understand the different gaming divisions of Rank and strategies adopted by the company.

Keywords : Rank Group PLC.; Gaming and leisure; company; Mecca bingo; Hard Rock Café; Growth Strategies Case Study; UK Gaming industry; Music Memorabilia; Grosvnor; casinos; Blue Square; Rank organisation; Joseph Arthur Rank; Bingo club; casino; relaxation of Gaming laws; Hard Rock merchandise; Jimmy Hendrick's flying V guitar