Baby boomers, quality spirits and performances by veteran musicians provide the winning formula for City Winery.
City Winery CEO Michael Dorf hopes to expand his music-and-Malbecs concept to 30 outlets in the U.S. and abroad.
Photo: Buck Ennis
Glenn Tilbrook knew what his audience of some 300 baby boomers wanted as he scanned the candlelit room at City Winery.
When the former frontman for the late, great U.K. pop band Squeeze finally delivered his hits “Pulling Mussels (From the Shell)” and “Tempted” at the end of his 90-minute set, the crowd erupted. This is what they came to hear on a September evening while they sipped expensive wine and swayed in their seats—though Mr. Tilbrook hoped they would also groove to songs from his new solo release, Happy Ending, which he is promoting now.
The confluence of new and nostalgic, pricey yet casual, is the gold mine that six-year-old City Winery has tapped into in Hudson Square. Now City Winery is becoming an international brand, like many of the musical acts it books on a nightly basis. It is on track to double its revenue next year, to $50 million, according to its founder and CEO, Michael Dorf. It expanded to Chicago in 2012, and opened clubs in Napa, Calif., and Nashville, Tenn., this year. Mr. Dorf wants to build an empire of 30 venues in the U.S. and abroad that his wealthy backers liken to the Hard Rock Café and House of Blues—both of which are savvy marketers of merchandise as well.
“The stars have come together very nicely for us,” Mr. Dorf said. “We have gotten the big names that used to fill concert halls and an audience that is looking for culture and a sophisticated environment.”
It is also the only winery and concert venue in the city, and Mr. Dorf wants to grow fast before any competitors “wake up” and copy his business model.
City Winery launched in 2008 as the economy crumbled. Mr. Dorf managed not only to survive, but also to create a new concept around winemaking in New York.
“Michael was almost a one-man show, but he has built an organization of people underneath him, and we have just taken in some new investors to grow this thing,” said Ilan Kaufthal, one of City Winery’s original investors and a former vice chairman of investment banking at Bear Stearns & Co. Mr. Kaufthal is currently chairman of East Wind, a boutique investment bank.
Mr. Dorf, 51, is hardly a novice club owner. In 1986, he founded the original Knitting Factory, a club on East Houston Street, featuring jazz and experimental music that has since moved to Williamsburg, Brooklyn, and opened in several other cities. He’s no longer affiliated with the venue, but it gave him the experience he needed.
At City Winery, he is targeting older and wealthier customers.
“They still like to go to a concert like they used to, but they want to have civilized conversation, and don’t want to get completely wasted and get home at 3 a.m.,” said Steven van der Zwan, a real estate developer who owns residential properties as well as Williamsburg Cinemas, and who was an early investor in City Winery. “These fans still have to get up in the morning and go to work.”
Providing a high level of service is crucial, Mr. Dorf said. As customers arrive for either drinks and dinner or just the music portion of the evening, they are greeted by a delegation of hosts and servers who keep close tabs on their needs.
A huge fan of restaurateur Danny Meyer , Mr. Dorf requires his staff to read Mr. Meyer’s landmark book about the art of hospitality in business, Setting the Table. He also takes his 70-person management team every year to a resort in the Caribbean or elsewhere to develop the corporate culture and share ideas.
“I hate the phrase ‘corporate retreat,’ ” he said. “I call it ‘base camp,’ because when you are mountain-climbing, you create a base camp, where you survey the area you want to climb and conquer.”
One of the summits he’s focused on is the goal of opening up to 20 City Winery outposts in the U.S. within the next five years.
Not just another bar
His move to Napa in April was a key component to the growth. Because 70% of the wine sold at City Winery venues is made on the premises, it needs huge volumes of grapes and a good relationship with the vineyards that supply it. It has 36 contracts with vineyards—25 in Napa and Sonoma, Calif.—that process more than 100 tons of grapes for City Winery.
“We felt it was a strategic move to have a location in the heart of wine country so we could further our relationships there and get new ones,” Mr. Dorf said.
Without the music, however, City Winery would be just another bar. Access to such performers as Mr. Tilbrook and Steve Forbert, who plays there on Nov. 2, is made easier in large part to the declining fortunes of many musicians who are not making as much income from royalties on their past hits because most consumers are not buying CDs.
Concerts are seen as a steady source of revenue for musicians. Because the vast majority of City Winery’s revenue is derived from selling drinks and food, artists keep about 80% of the money from ticket sales, Mr. Dorf said.
“Our focus is on the culinary side, so we are happy to let the artist fill up the room and make the money,” he added.
For Marc Cohn, who is best known for his Grammy-winning ballad, “Walking in Memphis,” performing at City Winery throughout the year is a no-brainer, as he lives in Manhattan and would rather be close to home with his two children than being on the road.
Still, he concedes that performing live is much more important to an artist than ever before.
“It was hard to sustain a career in the past if you couldn’t deliver live, but that is magnified 100-fold today because no one is really selling any records,” he said, adding, “I’ve played more shows in the last five years than in all of the past 15.”
City Winery represents a new chapter in the music scene as landmark clubs, like the Bottom Line, which attracted such legends as Eric Clapton, Linda Ronstadt and the Police, shutter.
“When the Bottom Line closed, it was a great loss,” Mr. Cohn said. Still, he pointed out, “City Winery is the only venue in the city where I don’t want to go home after sound check or performing because I want to stay and eat.”
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