Keo's wealthy Wall Street clientele were no longer spending like they once did. (MORE: The G-string scholarship: College students strip to pay tuition costs) A new hustleĪfter the 2008 financial crisis, banks collapsed and trillions of dollars in wealth were gone. She would soon have another major curveball coming her way. I show up to work every day, miserable, drinking to be here, putting up with nonsense… What did you do? You came in a suit,'" Keo said of having to give up her earnings. "You're like, 'No, I'm doing all the work. Additionally, dancers tipped other employees like bartenders to get sent the right clients. It was $300 to work at a club and then management would claim 40% of the night's earnings, Keo said. Though the cash was rolling in, Keo, like others in the industry, was forced to pay hefty fees to the club's management just to be given a slot on the schedule. "I was making my tuition in one night and I was like, 'Oh my gosh, school can wait,'" she said, laughing. To make that kind of money in one night, she said "it felt great to have that power. On her first night there, she said she made $2,000 to $3,000 in a matter of hours.
Credit-card companies are telephoned in advance for approval on spending limits.Roselyn "Rosie" Keo is seen here during an interview with "20/20."Īfter getting her start at Lace, Keo worked at a number of New York City gentlemen’s clubs, eventually getting a job at Scores in Manhattan’s Chelsea neighborhood. Nothing is left to chance: To avoid day-after disputes with customers who decide they've spent too much, big-spending customers are fingerprinted, and sign separate approval forms for credit charges. The rent at the 10,000-square-foot club is $49,000 a month, he said, and gross profit margin on total revenues is about 35%. "It's all about the numbers," he said, quickly ticking off a few. He got into the business at 20, in Dallas, buying his first club with the proceeds of his rare baseball card collection. "Revenues at Rick's in New York were up 63% in the first quarter," said Langan, 39. The other major revenue items are cover charges, food and alcoholic beverages, which provide the bulk of revenue. Where else could I make $600 a day or more?"
I have a masters in psychology from LIU and I need to pay off my school loans. Jasmine, a lissome blond dancer at Rick's, said, "It works out well. The dancers say the fees, called "house charges," are a small price to pay when they consider their income. He and Troy Lowrie, CEO of VCG Holdings, explained that the practice is accepted nationwide, and that dancers' fees account for about 10% of revenues in their business model. "We provide a safe and secure place for them to earn their money." "They're independent contractors," Langan said.
At Scores, better known and somewhat more luxurious, the dancers pay the club $300 a night to work. The fee at Rick's is $100 a night, and in return, the women keep all the money they receive from customers, including credit-card charges. Quite the opposite, for the dancers pay the clubs for the right to work. One factor boosting the bottom line is that unlike other businesses, there is no cost for the key labor force, the strippers. Those financials provide a unique look at the unusual economics of the modern strip clubs and the millions of dollars they generate. VCG, headquartered in Denver, is up 700% from its low and Rick's, headquartered in Houston, has climbed 100% from its 52-week low.īecause they are publicly traded, unlike Scores and the city's other upscale gentlemen's clubs, Rick's and VCG must disclose detailed balance sheets: profits, losses, costs and investments. The stock price of both - the only two publicly traded companies of their kind - have shot up remarkably over the last year or so. Rick's owns, operates or licenses, 14 adult entertainment clubs around the country, including venues in Houston, Minneapolis and New Orleans.Īnother such company, VCG Holding Corp., publicly traded on the American Stock Exchange, owns eight clubs around the country and manages another five - none in New York. So you can spend $3,000 here and say 'Hey, I had a good time.' "You want to believe this 19-year-old girl really loves you, is listening to you and maybe in another time, she could be your girlfriend. "For guys, it's male bonding, or an escape from reality," Langan said. Rick's is part of a publicly traded corporation, Rick's Cabaret International Inc., with shares traded on the NASDAQ, and accountants, attorneys, Securities and Exchange Commission filings and a business model not very much different than WalMart, except for what's being sold.