One morning in July 2007, a mystery businessman awoke in London with a headline-grabbing 210,000 USD bar bill and a sore head. Beirut’s shrine to wealth and unabashed ostentation, Le Crystal nightclub, had landed in the UK in lavish style. Exporting the tabletop-dancing, Champagne-swigging antics of Beirut’s now-fabled club to London and Dubai may sound like importing dates to Saudi. But Crystal has something new to offer, says Mazen El Zein, ceo of Circle Management Group. “What do we sell?” muses Zein, in his waterfront Beirut office. “Illusions.”
A night out in Crystal illustrates his point. Suddenly, an anthem interrupts the pounding music and a spotlight illuminates two waiters bearing a Methuselah of Champagne, aflame with sparklers, on their shoulders to a big spender’s table. Let your dollars flow like water, and a wall list of the night’s top customers will announce your largesse to all. Harbour delusions of grandeur over the same cocktail all night, and you get to bask in others’ reflected glory. Shrinking violets aside, everyone’s happy and gets to escape reality for a few hours.
“Crystal has always been something of a theatrical mise en scene, where people spend more than they can afford, where rich people mingle with the less rich and you have a very glamorous environment. You feel like you’re in Europe, but you’re still in Beirut,” El Zein says. As part of the opulent experience, you’ll apparently only find cars worth a minimum of 100,000 USD parked in the driveway.
Beirut’s brashest club – and there’s some competition – was how it all started in 2003. Their idea was to offer a “premium clubbing experience”, says El Zein – a prime spot on Beirut’s then up-and-coming Monot Street, plush décor with top sound and light systems and of course, an “exclusive” door policy to keep out the riff-raff.
Financed by eight young investors, including El Zein, Crystal took over the premises of the defunct Circus nightclub. With a relatively meagre initial capital of 550,000 USD, they accrued year-on-year revenues of four million USD and profits in the region of 1.5 million USD a year. These figures, according to Zein, were repeated continually with the exception of summer 2006. Such rampant success led to new projects being handled by two new companies, Circle Management Group and Dream Holding.
Created as a special investment fund, Dream Holding is geared towards the hospitality and tourism sectors of the Middle East in particular. The fund was spearheaded by three financiers, Mazen El Zein, Karim Attieh and Fadi Hallak who managed to raise 10 million USD with the aid of various investors. Following further capital increases the fund is now flush with around 20 million USD, much of which was brought in by Gulf nationals, who number around 30, with average stakes of 500,000 USD. Hallak may be the ceo of Dream Holding, but El Zein is its pivotal player – as ceo of Circle Management Group he is the link between the two companies.
What’s more CMG has the exclusive rights to manage and operate Dream Holding properties. Just to add further confusion to the mix, CMG, which in addition to El Zein comprises of three additional Lebanese partners, Dany Khairallah, Rony Homsi and Jad Matta, is also a shareholder in Dream Holding.
Whatever the case may be, Dream Holding and CMG have accumulated quite a portfolio – with the majority of their business interests being in Lebanon – including beach club La Plage and a handful of restaurants: Métis, Kitchen, Resthouse Saïda. The company’s other Lebanese trademark is Sofil catering. Naturally, they are the exclusive caterers for the Hariri family’s Qoreitem Palace and BIEL’s Pavillion Royal, wedding venue of choice for Beirut’s rich and famous.
But the formula has worked well outside of Lebanon too even, somewhat surprisingly, in one of the world’s most expensive cities. “We didn’t go to London trying to imitate the leader of the moment. We went knowing what we wanted to do and to introduce something we considered was missing in London, i.e., very good service.” Crystal’s unembarrassed exclusivity appealed to London’s Middle Eastern and Russian wealthy. “You know if you’re a customer you’ll be well treated, you won’t spend 10,000 USD one night and the next day they’ll pretend they don’t know you.” Having reportedly bought a 60,000 USD Methuselah of Cristal, 40 ordinary bottles and 28 bottles of Dom Perignon, among much, much else, the anonymous businessman is certainly likely to expect the star treatment if he returns. His service charge alone came to 20,000 USD.
In Lebanese style, Crystal turned its surgically enhanced nose up at London’s love-affair with dark and dingy watering-holes. Its ceiling alone cost 400,000 USD, being studded with 15,000 crystals and lit by a complex LED system. There is no dance floor – forcing the most reserved Brits on to the tables. Crystal London has just celebrated its one-year anniversary, so it may be too early to count profits. But it was crowned Best New Club at the London Club & Bar awards and El Zein says takings have surpassed all expectations, no surprise since an average check totals about 4,000 USD. “Crystal London is doing above any dreams we had, let alone expectations,” affirms Zein, “though it’s a bit too early to disclose any firm figures, I can easily say that our net profitably will be at 35 per cent,” – which rest assured means many million of dollars.
Cracking London was the litmus test for whether the club would work outside Beirut. Crystal will open in Dubai by the end of 2008, to complement the already popular C Bar. Plans to open in Paris and/or Cannes are also in the final stages. “And we hope to be present in the United States or Moscow in the coming few years,” El Zein says.
Expansion is not just with the Crystal brand, as C Bar, a favourite with the Dubai jet-set, is set to take on the region, starting with Egypt and Morocco, though only cosmopolitan Beirut and Dubai will host Crystal itself. Success, though, has not always been a sure-thing. In 2006, Dream bought Idarat in Lebanon whose portfolio included Sofil Catering, Café d’Orient, La Plage, Al-Mijana Restaurant and Resthouse Saida – an investment that has not proved too favourable in light of Lebanon’s precarious situation. Furthermore, Crystal Beach Saint Tropez, open for one month last summer, may not have lost money but it certainly didn’t perform on par with the other investments. Nevertheless, Crystal beaches are to open in Morocco and Spain soon.
Beneath the dreams and the drama, Circle Management chooses its projects after a lot of market research and with the hard-nosed business sense with which El Zein, a former investment banker, entered the entertainment business. “We try to find a window of opportunity, a need in the market, we are selling a glamorous lifestyle, after all,” he explains. Circle Management may not have introduced wealthy Arabs to opulence. But it has pioneered mixing it with cutting-edge hip.
Contacts
Circle Management Group
Beirut, Lebanon
Tel +9611 972 555
HYPERLINK "http://www.circlemg.com/" \o "http://www.circlemg.com/" www.circlemg.com
Dream Holding
XXX. XXX
Tel XXXX
HYPERLINK "http://www.xxxx/" \o "http://www.xxxx/" www.xxxx
