If you read one thing: You may not recognize the name RCI Hospitality, which offices in a nondescript building northwest of Houston, but if you've been in the area long enough, you likely will recognize one of its clubs — Club Onyx near the Galleria. The company, which Forbes has described as the only publicly traded strip club owner in the U.S., has been steadily acquiring more and more clubs across Texas and the U.S., quietly backed by the biggest investors on Wall Street.
The beginning:
When RCI went public in 1995, its portfolio consisted of just one club — Club Onyx. But under CEO Eric Langan, the company, which reported just over $46 million in profits last fiscal year, has grown to own more than 60 locations from Arizona to Maine.
RCI's business strategy also has attracted a who's who of blue chip institutional investors, including Blackrock, Vanguard and the California State Teachers' Retirement System, with each owning a portion of the company's stock.
Facing obstacles:
In 2009, RCI dancers in New York filed a class action lawsuit alleging RCI docked tips and failed to pay employees minimum wage, on top of charging them fees for dancing in the club and imposing fines for misconduct or being late. RCI and the other defendants denied the allegations and claimed the dancers were independent contractors not employees. The court disagreed.
Then, in 2020, on top of financial losses due to the pandemic, RCI was actively under investigation by the U.S. Securities and Exchange Commission. The government alleged RCI made several unreported payments to company leaders and employees.
Looking ahead:
Despite pandemic-era lockdowns, lawsuits and investigations, RCI has shown no signs of slowing down.
"My goal is world domination," CEO Eric Langan said in a December call with investors.
Read Megan Fan Munce's full story here.
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