MONEY FALLING INTO THEIR LAPS
Edward Heathcoat Amory asks why the
City has become so keen to help London's strip clubs
IT SHOULD come as no surprise that the City of London is helping to sell sex. The Square Mile is a morally neutral market place which will deal in any commodity for which enough buyers and sellers can agree a price. So the speed with which the bean- counters have rushed to help lap-dancing clubs raise money by selling shares is merely the latest example of the efficient working of Adam Smith's invisible hand. What is more difficult to understand is the enthusiasm with which the sex industry, admittedly at its more respectable end, has turned to the stock market for money, and why investors are prepared to meet its needs so readily.
'Lap-dancing', or 'table-dancing' as some of its purveyors prefer to call it, is the lat- est fashion in the oldest game. Men go to a club where scantily clad ladies gyrate on a catwalk. For a payment of £10, in cash, stuffed into the girl's garter, they will per- form a three-minute private dance for the punter, not far from his lap. In Britain, according to one estimate, there are now 42 of these clubs, of which the best known is Stringfellows in London's West End. Depending on which council has issued the licence, the girls will either be clad in wispy clothing, topless or completely naked. They all, theoretically, adhere to a 'I'm going out now, I may be some time.' strict no-touching rule. Lap-dancing was imported to Britain from the United States in 1987, by the nightclub owner Peter Stringfellow. He saw its phenomenal success on the other side of the Atlantic. In Atlanta alone there are 37 clubs serving a city of three million people, and it has become respectable cor- porate entertainment. One high-flying woman friend explained to me that on a business visit to America she was taken to one of these clubs as a matter of course, and 'although none of the girls danced for me, it was fascinating looking at the men, who were trying so hard to pretend noth- ing special was happening that sweat broke out on their foreheads'. It may seem sur- prising that men want to watch women they can't touch, but Aids has changed the sex industry's rules. In Britain lap-dancing clubs have shown unusual financial, as well as physical, dex- terity. Two floated on the Ofex market (8 largely unregulated, junior stock exchange). One, the Berkeley Playhouse, is now in receivership. The other, Cherokee Leisure, has enjoyed mixed fortunes. It b85 four clubs, and last week reported pre-taX profits of £174,000 on a turnover of million. In the same week, it was fine' £45,000 by City magistrates for displaying naked breasts without the appropriate 'sexual encounters' licence. Its managing director, David Peters, explained to 111.8 that he had chosen to raise money by sett' ing shares, rather than from a bank, because of 'my views on the future course of the economy'. In other words, wbe.° there is a recession, a bank might want n.5 money back. Shareholders have no suco option. Despite his concerns about the econ0: my, Mr Peters is negotiating with the 1:, vency accountants to buy Berkeiel Playhouse. He thinks that their stratee was wrong. 'It's aimed at the high roller!, the guys who spend L5,000 a night. TOP" isn't enough of that end of the market. Vie, 100. need blokes who are only spending the Alan Whitehead, a former singer with ed Seventies pop group Marmalade, vvorichis with the Playhouse before setting UP own club, Secrets, in Hammersmith. P says, 'I knew it was going to go wrong when they asked me to find 200 girls, between 5 ft 6 and 5 ft 8, no platinum blondes, no silicon boobs, and it would be helpful if they had a title. I've seen more organised things running round the farm- yard with their heads cut off.'
Mr Whitehead went on to explain that the girls were the key, and that the Berke- ley Playhouse had made the mistake of hir- ing Jilly Johnson, a former page three girl, as the 'club mother' to keep them in order. 'She was a superbitch,' he says. 'Club mothers must be firm but fair, to provide a buffer between the men who own the club, and the girls who work there.'
A roll-call of respectable City figures put their money behind this enterprise, includ- ing James Barbour, a former director of De Beers, Peter Burnell, formerly a direc- tor of Johnson Matthey, Leigh Collins, Who runs stockbrokers Collins Stewart, and Peter Beckwith, the property magnate Whose daughter, Tamara, has found fame as an 'It girl'. Three things may have attracted these and other investors. Putting money into small businesses of this kind attracts tax breaks through the Enterprise Investment Scheme, and appeals to those Who have made a profit elsewhere and want to postpone paying capital gains tax. They may also have expected to make money; in America, the business is so suc- cessful that they had an annual convention in Las Vegas for club owners. Last, but possibly not least, some may have been lured by the offer of free membership rewards for shareholders.
For those intrepid investors not deterred by the failure of the Berkeley Playhouse and the poor performance of shares in Cherokee Leisure, another lap-dancing club wrote to investors this week urging them to part with their money. Garden Inns plc is hoping to raise £1.5 million, and has produced a prospectus, headed by three key points: 'Men admire beauty', 'Men can't take their eyes off beautiful women', and 'Table-dancing clubs take phenomenal money'. The four directors, none of whom seems to be in charge, have never run a table-dancing club before, and include a writer of children's books and a former actor in the Royal Shakespeare Company. The motley collection does not inspire confidence. Investors — even those hoping for free membership — should keep their hands in their pockets.
If this strange opportunity does not attract you, however, others may be on the way. Surrey Free Inns, the pub operator quoted on the London Stock Exchange, now has two clubs under the 'For Your Eyes Only' brand, one in London and the other in Bournemouth. Barry Hocken, who as marketing director of brokers J.P. Jenkins is responsible for the marketing of the Ofex market, admitted that he had encouraged Surrey Free Inns to float Tor Your Eyes Only' on Ofex, apparently undeterred by his exchange's poor experi- ence with other companies of this type. Tony Hill, managing director of Surrey Free Inns, told me that he would consider floating 'For Your Eyes Only' as a sepa- rate concern 'if it needed a European or a national roll-out, in which case it would need to raise capital separately. But we'd like to have some solid indication that it'll last as an independent business in its own right.'
The enthusiasm with which this growing sector has embraced the market may turn out to be its undoing. It has focused the full glare of publicity on a branch of the leisure industry which has traditionally thrived in the shadows. Some investors may also fear, understandably if not justifi- ably, that criminals may be involved in some parts of the business. Stock markets turn on sentiment, and Tony Hill admits that if the industry gets a reputation for 'sleaze and porn', instead of 'a glorified boys' night out', then it is finished. David Peters of Cherokee agrees, and says that the Garden Inns prospectus is a 'danger- ous document' because its naive and ama- teurish presentation brings the industry into disrepute. Alan Whitehead takes a dim view of the future of his industry. 'Everyone I meet in this business is an expert — expert in screwing it up and los- ing some money. I wouldn't invest a penny of my own cash in all these hare-brained ideas.'
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