The rapid evolution of home
entertainment in recent years, culminating in home theatre technologies like
soon-to-be-released Ultra HD Blu-ray players, massive 102-inch 4K TVs and
hi-res audio, as well as the proliferation of diverse interactive games
delivered by next-gen consoles and powerful computer display hardware like
NVIDIA (NASDAQ: NVDA) graphics cards, has put considerable competitive pressure
on movie theatres, FECs (family entertainment centers), and other entertainment
venues like bars, nightclubs, and restaurants. Today’s savvy consumers want more
bang for their entertainment buck and, in a move telegraphed by the shift from
brick and mortar retail to shopping online via etailers like Amazon (NASDAQ:
AMZN), more and more consumers are staying home more often, opting to enjoy
their advanced home entertainment suites with a movie off Netflix (NASDAQ:
NFLX) or Amazon Prime. Even with big-budget blockbuster attractions like Viacom
(NASDAQ: VIAB) subsidiary Paramount’s Mission: Impossible – Rogue Nation
currently playing on the big screen nationwide across sold-out theatres, a film
which grossed $56 million in its opening weekend, National Association of
Theater Owners data indicates relatively slow growth for the North America
movie theatre sector.
With ticket sales off by five
percent last year from 2013’s figures, driving just $10.36 billion in revenues,
a sum lower than in 2009, the roughly $16 billion movie theatre sector is
currently projected as growing only 1.9 percent in 2015, and has been exposed
to disruptive reinvention of the underlying business model by innovators.
Indeed, movie-goers are now flocking to venues that offer a more comfortable
and engaging experience, with operations like AMC (NYSE:AMC) Dine-in Theatres
and private company Alamo Drafthouse Cinema stealing the show, as they offer
patrons the thrill and image quality of the big screen, combined with
casual/fast casual menu options, vastly improved seating, or even a large
selections of alcoholic beverages.
This trend has led to innovative
fusions of multiple entertainment options into single venues by companies like
the Dallas-based subsidiary of Australian company, Ardent Leisure Group (OTC:
ANRRF) (ASX: AAD), the highly-successful Main Event Entertainment . Main Event
employs an Eat/Bowl/Play model at its nearly 20 FECs, bringing together a
variety of interactive games, such as technologically advanced bowling lanes,
billiards and multi-level laser tag, with virtual and regular arcade video
games, and topping the entire package off with a sizeable menu, ranging from
fast-casual to chef-inspired casual, as well as a full bar offering beers,
wine, and creative cocktails. This one-stop-shop model has become the
cutting-edge of the industry and is garnering increasing traction as the
destination of choice for small groups of friends, corporate events, and family
parties.
It is along these same lines that
up-and-coming sector player Latitude 360, Inc. (OTCQB: LATX) has structured its
ultimate entertainment eatery business. Latitude 360 is capitalizing on the
proven success of companies like Ardent Leisure Group and actively expanding
its operation to an ever larger nationwide presence via its own already
well-established brand. With three locations currently based in large shopping
centers that have been selected for their choice regional demographics, and
three more locations in the hopper set debut in the near future, Latitude 360
is intent on taking the FEC fusion concept to the next level. By putting
together under one roof a wide, synergistic array of options, Latitude 360 is
focused on winning the hearts and minds of consumers who are looking for the
complete afternoon meeting, night out, or party experience.
A key element of the company’s
approach is its emphasis on capturing the shift towards dine-in movies via its
Cinegrille® luxury dine-in cinema, by fully exploiting the potential of the
roughly $160 billion casual dining market, occupied by brands like Darden
Restaurants’ (NYSE: DRI) Olive Garden and LongHorn Steakhouse, or Cracker
Barrel (NASDAQ: CBRL), as well as the burgeoning $35 billion fast casual
market, superbly characterized by newer players such as Chipotle (NYSE: CMG)
and Panera (NASDAQ: PNRA). Elegantly styled home theater-quality seating with
dining trays for convenience, combined with 25 foot by 11 foot HD screens and
10,000 watts of DTS™ digital surround sound, are a big part what makes Latitude
360’s Cinegrille® dining experience something to come back for again and again.
The dining formula is quite impressive in its own right too, with full food and
beverage service offered in the main dining area, as well as throughout the
establishment.
Ultra-modern bowling lanes,
equipped with the very latest in interactive scoring features, a giant video
wall, a mega sound system and luxury leather seating, constitutes a total
reimagining of the bowling alley experience for the modern age. This winning
realization of the modern bowling alley includes a state-of-the-art game room
as well, with professional billiards tables, and over 70 various interactive
and redemption center-based games. Paired up with the luxury bowling and
casual, fast casual, or upscale dining choices is a complete selection of HD Sports
Theater viewing options, offering patrons the chance to catch the latest fight
or other sporting event on multiple screens inside with a cold pint, or at the
outdoor patio where they can lounge with a cocktail, or even on the huge indoor
jumbo-tron. All the screens are wired for multi-media presentations and
microphones, making them great for product launches and corporate lunch/dinner
meetings. Because Latitude 360 as a concept was designed from the outset as a
full-spectrum event center for birthdays, corporate events or social events of
all kinds, the company’s trained event planning specialists can also help
customers arrange a whole host of different kinds of events, accommodating just
a few guests, or as many as 2,000 people at most locations. Guests can even
hook up a Sony (NYSE: SNE) Playstation® 3 or any other gaming system to the
projection screen for the ultimate gaming party.
Add to these sports bar and gaming
options the presence of Latitude Live, a Vegas-style live performance theater,
complete with event-style seating capacity that is able to accommodate several
hundred guests, as well as a sophisticated AV stage setup with a giant LED wall
backdrop, and you have the makings of the ideal micro-event center for private
functions. Latitude Live hosts live comedy on weekends and puts LATX in the
$350 million comedy club circuit loop as a growing, increasingly prominent
nationwide spot for comedy enthusiasts to catch today’s top performers.
Moreover, the Axis Live nightclub, bar and live music venue, complete with a
high-energy dance floor, makes Latitude 360 the perfect place for a night out
with friends, where everyone can enjoy dancing, great food, and a full
selection of beverages.
With three locations currently
open in Jacksonville, Florida (50,000 square feet), Pittsburgh, Pennsylvania
(65,000 square feet) and Indianapolis, Indiana (75,000 square feet), as well as
locations slated to open this year in upscale areas like a location in Albany,
New York (53,000 square feet), as well as one in Kingston, Massachusetts
(37,000 square feet), are also proceeding apace. The company has done
considerable due diligence on both of these areas and identified an organic
receptivity towards, as well as lack of, live and multidimensional
entertainment. These upcoming locations are just the leading edge of LATX’s
aggressive, strategic expansion vision.
A fact attested to by recent
developments such as a multi-year, on-premise brand integration agreement
executed with Monster Beverage (NASDAQ: MNST), the producer of the wildly
successful Monster Energy® drinks. Monster has soared to a 14 percent market
share of the energy drink space in recent years (right behind Red Bull) and the
company posted a 4.7 percent rise in gross margins for Q2 2015 to 56.9 percent,
clearly indicating to investors how valuable such a deal is to the Latitude 360
brand. This key brand integration is perfect for the high energy identity of
Latitude 360, and the even more recent announcement by LATX, that the company
has partnered with and pending acquisition of one of the leading fantasy sports
providers, Major League Fantasy, making Latitude 360 the first to offer a chain
of live, in-venue fantasy sports books, further separates the company from
competitors.
Projected as growing to around $10
billion in revenues by next year alone, fantasy sports have become incredibly
popular. With major players like Yahoo (NASDAQ: YHOO) recently throwing their
hat into the fantasy sports ring, following after the successes of operators
like DraftKings and FanDuel, the Latitude 360 experience’s outcrop into “360
Fantasy Live,” complete with high-stakes fantasy games backed up by amenities
like the comedy club, bowling lanes and entertainment theatre, as well as a
cigar lounge, should really help to further establish LATX’s overall brand
presence. This is a shrewd move for the company that appeals directly to one of
its core target demographics, upper-class males from 18 to 49, and by
cultivating affluent professionals across choice regional markets in this
manner, Latitude 360 should be able to maintain serious momentum as the company
continues to expand its logistical footprint. Especially considering customer
loyalty membership programs like the Latitude 360 Rewards and Membership Club
Card, which rewards frequent patrons with free bowling, comedy shows and other
perks/rewards, allowing them to rack up double (Blue class membership) and even
triple (Black class membership) points with every purchase.
Clearly, LATX’s vision of going
above and beyond the Eat/Bowl/Play model offered by sector players like Ardent
Leisure Group’s Main Event Entertainment, expanding into lucrative segments
such as live music and events, as well as fantasy sports, will help the company
to identify itself as the ultimate in upscale multi-dimensional entertainment
eateries. This move by LATX to completely redefine the FEC space and dovetail
in additional, complementary elements will no doubt provide the fuel needed to
achieve the company’s goal of expansionistic escape velocity, and become a
national contender for the top sector slot.
Investors can take a closer look
by visiting http://latitude360.com
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