The New York Post is reporting that the founder of Modern Luxury Media, Michael Kong, has been pushed out of his role with the company. The Post says Kong was “an apparent victim of a superheated expansion that could not be sustained in the recession.” What this means for Modern Luxury Dallas is anybody’s guess, so here’s mine: operations at the Dallas outpost will come under intense cost-cutting pressure from the banks that funded Modern Luxury Media’s expansion. Dallas is not a top performer in the the company’s chain (which includes pubs in Chicago, Los Angeles, Miami, Manhattan, and Houston, among other cities). The Post says the company is carrying $120 million in debt, with annual payments running around $15 million. The debt holders–Credit Suisse and New Star Financial–are now calling the shots.
(A personal note: Modern Luxury competes for advertising dollars with us. In that respect, I’d be happy to see it wither. But I know people who work there. I’m intimately familiar with the pain that can come from keeping your finances in line. I empathize with those who will suffer from Michael Kong’s ambitions. No cheering and clapping here.)
