Proposal

Overview

This proposal is designed to provide an overview and details pertaining

to the Chinawhite brand and nightclub, with a view to partnering with an

appropriate organisation to create a Chinawhite branded nightclub in one

or more properties. This proposal refers specifically to the opportunity

of creating Chinawhite in one country but also considers the roll out of

the concept to any other suitable locations outside of Europe.

Chinawhite: A Brief History

Chinawhite London is located beneath The Café Royal in Piccadilly,

central London. The location has long been a centre of entertainment

for London and the Café Royal in particular has had an interesting

history, having served as a favourite backdrop for many famous people

and events over the past 130 years.

Chinawhite launched in November 1998 after a ten-week fit out.

The entire interior of the club, including floors and walls, was sourced

or created and then imported from Bali and Java. The look of the club

was in complete contrast to existing venues in London and the underlying

ethos of service and added value, unique. For the first time in a long

time a nightclub presented a completely different and exotic

environment - a theatrical backdrop for its clients that was designed to

incorporate an emotional journey through the various spaces it offered.

Chinawhite was very confident of its position within the London

market, deliberately targeting various social groups and individuals

for inclusion or exclusion. The overriding mantra was of privacy for

those included, and a policy of discouraging the paparazzi or press was

rigorously enforced. As a result the club built a very strong celebrity

reputation and presence and very positive word of mouth within their

circles. The mix of people encouraged to join was deliberately wider

than was traditional in West End nightclubs and as a result the club

became, and continues to be, a subject of great interest to the public

and press in the uk and indeed around the world.

Chinawhite has a policy of associating itself with other upmarket or

exciting brands. For example, its involvement with Cartier at the annual

Cartier International Polo has become an iconic day in the English social

calendar, where Royalty meet celebrities and the party set publicly.

These types of activities have helped to maintain the club’s profile

with clients, public and press.

Requirements and Location

In order to reproduce the elements of the London club elsewhere,

including private rooms, VIP areas and a restaurant, approximately

7,500 sq ft / 750 sq metres is required. This is subject to various

factors including the provision of a kitchen and adequate storage

space. Traditionally nightclubs in the UK occupy basement space and

have to provide a substantial food element. We are not limited by these

requirements in rolling out the nightclub. Nevertheless the provision

of light food would be extremely beneficial to the operation.

Typically, we favour locations in the heart of an entertainment area,

where high footfall late night operations are already in existence and

operating well. Locations within (city) hotels should be able to provide

a separate entrance from the street. Exceptions to this would include

landmark sites and beachside operations where the concept could

be expanded and enhanced to include daytime operations, which will

significantly increase revenue potential.

We will consider any location that we feel would seriously enhance

the clients’ experience by adding drama to the mix - particularly beach

front locations and beach bars.

Capacities

Due to the exclusivity of the Chinawhite brand, the optimum capacity

for the club is 400 – 500.

Operating days and hours

Chinawhite London operates six nights a week. It is only limited to

a six-night operation due to the building’s licence stipulations. It is

anticipated that a seven-night-a-week operation is absolutely achievable,

given sufficient market and dependent upon the chosen location.

Chinawhite London’s operating hours are 20.00 hours to 03.30

hours and optimum trading hours are midnight to 02.00 hours.

Drinks

Chinawhite is predominantly a vodka and champagne club, with

50% - 60% of sales generated through bottle rather than single sales.

It is one of the highest end bottle sales clubs, though this will be

dependent upon the clientele profile in other locations. Chinawhite

also serves a wide range of cocktails, including a unique Chinawhite

cocktail, the ingredients of which are a closely guarded secret. Any new

Chinawhite establishment will include the unique signature cocktail,

prepared only by the head barman.

Food

The addition of a restaurant facility within the nightclub is beneficial

in terms of the revenue potential of the club. Whilst the food revenues

themselves will not necessarily significantly increase profitability, the

inclusion of food will extend the revenue generating hours of the club

and is extremely important for one off events.

Clientele

Chinawhite London’s social mix is key to the success of the club.

Predominantly, the club is frequented by women in their twenties

and men in their thirties to fifties. We try to retain a 60 / 40 ratio

mix in favour of women.

The guest profile is a fine balance of ‘the beautiful’ and ‘the cool’

and those who want to mix with them and pay for the party. The secret

to creating the best balance is by building a ‘hip’ clientele on a

regular basis that their followers just cannot ignore.

Chinawhite has a long history of attracting celebrities because of

its discreet environment where they feel safe and able to enjoy

themselves without the intrusions of the press or inappropriate guests.

Style

The fitout of the club is Balinese in style and all fixtures and

fittings are personally and individually selected by the licensor.

The provision of differently paced areas and atmospheres is fundamental

to the experience of Chinawhite, with discreet VIP rooms and separate

sound systems playing contrasting styles of music essential.

Music

Chinawhite is not about big named DJs. A successful nightclub is not

about music or musical trends. It is essential to retain smart DJs playing

music around six months behind the leading edge who understand how to

create the right atmosphere and react to the rhythm of the night. Only

by sensitivity to a crowd’s mood can a nightclub maintain longevity. Any

new licensee will receive advice and training of DJs and will have the

option of using existing Chinawhite London DJs on a regular basis.

In summary, the secret of success is to create an exclusive and

comfortable location, build a ‘hip family’ who believe it’s the centre of

the world, and be very careful who else is let in. When that is achieved

then stars like Prince and Status Quo will play a set for fun, Madonna

will hold her birthday party there and the Hollywood in-crowd will be

constantly on the phone trying to get tables.

Membership

Chinawhite London has a membership of under 4,500. This is by design

and the membership list has been ‘closed’ since the day we launched

it. This approach has maintained the exclusivity of the club with every

member feeling they were slipped in because of their connections. The

membership list could have reached unmanageable proportions, but has

been held back ever since opening to try and ensure longevity.

Guest List and Door Policy

The Chinawhite guest list is carefully managed personally by the

founders and this has been instrumental in the club’s success, again

ensuring exclusivity and providing a level of assurance that means

that celebrities and regulars keep returning. Guests can be added to

the list based on personal request and recommendation, but only men

accompanied by women are allowed, thus ensuring the ‘stag’ type

groups are omitted.

The Chinawhite guest list is separated into thee sections:

members and their guests, table reservations and non-members.

At any venue, the establishment of a very clear door policy is

essential to maintain the popularity and therefore profitability

of the nightclub. Whilst it is often tempting to open the club to

a wider clientele to increase short-term revenue, it has been proven

time and again that this leads to the very speedy degeneration of

the profile of the club, leading to medium-term damage to profitability

and ultimately an early death for the concept.

Estimated Costs

Chinawhite London cost approximately £500,000 to fit out in 1998.

Any other location’s fit out costs will be dependent on a number of

factors, including:

- existing/proposed facility and extent of planning already

undertaken at time of licence agreement

- content and layout of the proposed facility

- labour costs in the region (this is a major element of the

fitout costs – up to 60%)

- Size of the facility

By taking a licence for Chinawhite at an early stage of the

venue planning process, significant costs can be minimised by our

consulting and providing guidance on infrastructure planning

and specification, venue space modelling and planning and ongoing

basic fitout planning. For example, the planning of effective air

conditioning in a new venue will be significantly less expensive

than modifying or adding facilities.

Licence Inclusions

In signature of a licence for the nightclub, the Chinawhite team

will provide the following:

- Venue planning input and consultancy on an ongoing basis

- Assistance with the creation of concept drawings and GA’s

- Health and Safety planning

- Ongoing Creative Direction

- Equipment specification – from bar accoutrements to PA system, EPOS

systems and kitchen requirements, in conjunction with local suppliers if

and where required

- Internal fitout planning and physical procurement

- Risk Assessment input

- Overseeing of local staff recruitment

- Staff training – from management, office staff, door and security

personnel to bar and restaurant staff on an ongoing basis

- Establishment of written membership, guest list and door policies

- Advice on mechanics of managing the club membership

- Food menu planning input

- Drinks menu design and planning, including specific drinks brand stocks

- Design of operations documentation

- Managing the appointment of contracted DJs

- Planning and contracting of guest DJs on an occasional basis

- Input into guest profile in specific location

- Significant input in to the club’s opening event, including

celebrity invitations

- Input into drinks promotions policy

- Pricing policy recommendations

- Ongoing quality control

Licence Costs

The costs to a partner for each licence comprise the following:

- Licence fee

- An agreed percentage of annual gross revenues, net of all

taxes for the duration of the licence

This is for a ten year licence. Should a five year licence be

preferred, the initial fee will be slightly higher and repayable

again on re-signature.

The licensor will retain an ongoing input throughout the period

of the licence, taking an active interest to ensure the operation

is a success and retaining the Chinawhite values.

Revenues

Chinawhite London’s revenues are approximately £7million a year,

which is seen as an achievable revenue level in other chosen

locations. However, with the addition of a dedicated food offering,

the highest grossing operational period can be extended and it is

anticipated that a correctly operated beach club / nightclub operation

in the right location could increase revenues by more than 50% by

extending trading hours.

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Assumptions

The following elements are assumed as being the responsibility

of the licensee:

- Venue licence

- All venue costs, including fit out costs

- Adherence to agreed membership and door/guest list policies

- All staffing costs

- All taxes (local and otherwise)

- All operating costs

- Guest DJ appointments