He calls them "gentlemen's clubs" so people will think "it's a cut above" the old-time "titty bars," says Alan Markovitz, managing partner of the Penthouse Club on Castor Ave. near Allegheny, which opened late this summer. The name "soft-pedals what you do" with city officials and solid citizens. "If you don't put it in their face - 'Strippers! Topless Dancers!' they don't bother you. We try to keep it more upscale."
Markovitz says he grew up a "Jewish greaseball at Oak Park High" in 1970s suburban Detroit, got into the business as a bartender, lost his virginity to a dancer, decided "This is for me," and parlayed investments from his employer and his Holocaust-survivor TV-repairman father (plus "wealthy individuals and private equity investors") into a collection that currently numbers seven topless clubs in Michigan, Florida, and now Pennsylvania.
Markovitz tells his story in his new self-published book, Topless Prophet. In town checking on the club, he stopped by the Inquirer office and told me something I don't always hear from entrepreneurs: Philadelphia is an easy place to do business, and cheap. Though, he adds, his partners' local ties might have a lot to do with that:
After he bought rights to use the Penthouse name on clubs from the bankrupt magazine publisher, a Penthouse employee introduced Markovitz to two would-be Philadelphia club owners: construction contractor Mike Rose and boxer-turned-towing and salvage operator Anthony ("TKO") Boyle, who'd been looking at the vacant 30,000 square foot property on Castor for a big topless bar. "It's doing pretty well," Boyle told me. "It's extravagant, compared to the other Philly clubs. I didn't want to show my wife the bathrooms, she might get ideas... Alan designed everything."
"I go, 'Guys, this is way too big. We're not in Vegas,'" Markovitz told me. They cut it almost in half, and for $5 million - "too much, but it's spectacular" - installed adornments like motorcycles and "a big martini glass that comes out on stage - it's very theatrical, like a rock show. The idea is to make the place feel alive."
No Licensing and Inspections horror stories from Boyle. "I found this city to be the best I've dealt with. They weren't out to give us a hard time. I find the business climate here to be really good."
Cover charge is $10, and beer costs $6.50, which is $2 cheaper than he gets away with charging in rececession-plastered Detroit. "The price points are too low here," he complains, about competition like Delilah's Den.
In Detroit, Big 3 auto parts salesmen entertaining clients were a big part of his customer base. But in Philadelphia, "there is no day business here," he comlpianed. "Businessmen don't understand you can get a great meal. A burger. Suff and turf. You pay the same prices as at Capital Grill or McCormick & Schmidt's." But with breasts!
Markovitz warns it's easy to lose money in what he does. He claims credit for innovations that have become widespread in the business:
He modeled his clubs' appearance initially on TGI Friday's, he said, with a moderate dress code for patrons and a more "wholesome" atmosphere than the old biker bar vibe.
Instead of paying "girls" an hourly wage, he charges them a "tip fee" of $30 to $80 a shift (the going rate in Philly is less than Detroit), lets them keep whatever else their special dance clients pay them, and treats them as independent contractors: "Most of the girls are pretty independent anyway." But he gets them workers' compensation insurance: "Once in awhile a girl falls off a stage."
Dancers perform, not just on stage before a crowd, but on mini-stages for individual customers or small groups. That includes lap dances and other physical contact. Though "no sexual solicitation or drugs," Markovitz insists. "We fire you." And "You have to have zero tolerance." Markowitz says he employs 700 bouncers, waitresses, kitchen people, and dancers (the dancers last two years, on avererage), and fires 20 percent of his staff a year.