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A 'Kingpin' of Reinvention

Tom Shannon's chain of bowling alleys breaks the suburb stereotype.
A 'Kingpin' of Reinvention
Image credit: Photo Courtesy of Bowlmor Lanes
Tom Shannon owns a chain of bowling alleys that stretches from New York to California.

Tom Shannon is the kingpin of a chain of bowling alleys that stretches from the Big Apple to the hometown of tech giant Apple Inc. in Cupertino, Calif. Where other people saw a dying industry that catered to suburban dads in bowling leagues, Shannon saw an opportunity to reinvent the bowling business by creating high-end entertainment destinations for corporate parties and fun-loving couples.

His light-bulb moment came after attending a birthday party at the original Bowlmor Lanes just off New York's Union Square in 1994.

"It was being run like a business from the 1950s," Shannon says.

A keen student of process re-engineering dating back to his days at University of Virginia's Darden School of Business, he crunched the numbers and realized he could overhaul the business, raise prices and market to upscale clientele willing to pay a little more for a night on the town.

Shannon bought the crumbling bowling alley in 1997 for $2 million, financed with a Small Business Investment Company [SBIC] loan and a note held by the seller, and quickly got to work on the overhaul. He added new features like automatic scoring, started serving tap beer and better food and began accepting credit cards. 

"Revenue doubled in the first year and almost doubled again in the second year," says Shannon, 45, who vividly recalls the early days of renovating the bowling alley by day and opening it up at night to generate cash flow and finance the renovation costs. "We had a pretty steady rise from $1 million a year in sales [in 1996] to $15 million in 2007." 

Emboldened by the Union Square location's success, Shannon expanded the concept nationwide, and today Bowlmor pulls in $60 million in annual revenues. He bought and renovated bowling alleys in Bethesda, Md., and Long Island, N.Y., then built and opened new lanes in Cupertino, Calif., Miami and Orange County, Calif. 

Photos courtesy of Bowlmor Lanes

Its crowning achievement: A 90,000-square-foot, $25 million entertainment mecca housed on the third and fourth floors of the old New York Times building in bustling Times Square. The showpiece features seven lounges designed with New York themes, from Chinatown to Art Deco, Central Park to Prohibition. It also includes the Stadium Grill Sports Bar & Restaurant with four levels of seating, an 80-foot bar, a giant media wall with a real-time sports ticker and 29 high-definition screens, and gourmet cuisine by celebrity chef David Burke.

While the typical Bowlmor location costs approximately $8 million to build, it doesn't cost much to operate because the lanes are automated and bowlers do most of the work themselves. As a result, Bowlmor locations rake in several hundred thousand dollars per lane per year. 

And it doesn't hurt that the stars come out at night. Singer and songwriter John Legend attended a Gotham Magazine holiday party at Bowlmor’s Times Square location in December. Supermodel Karolina Kurkova, Olympian Michael Phelps, actress Lucy Liu and pop star Lady GaGa have made appearances there as well. Some celebs come to host events and parties. Actress Michelle Williams came to Bowlmor to celebrate the release of her cover for YRB Magazine. Others have been customers for years and just love to bowl.

And Shannon remembers to take time out to knock down a few pins as well. Ordinarily an average bowler, he recalls bowling an impressive 236 at the Bowlmor Lanes in Times Square last fall, with eight strikes in 10 frames.

"You have to be very passionate at what you do to be successful," Shannon says. "I am my company."

Shannon's Advice for Aspiring Entrepreneurs

Consider overlooked industries. "There are a lot of opportunities in industries that are unloved and not considered sexy," Shannon says. By acquiring and renovating crumbling bowling alleys, Shannon picked up positive cash flow at a fraction of the cost of other potential companies. But always remember to do your homework. Shannon says Bowlmor shut down its location in New Hyde Park, N.Y., on Jan. 2 after spending almost a decade trying to make it work. "Even though there was a lot of affluence in the county, where we were was a lower-end demographic," he says. 

Sell the experience. "When you go into a deli and order coffee, you pay a buck for a cup of liquid," Shannon says. "At Starbucks, you pay 50% to 100% more. Why? There's a certain aesthetic and cache when you walk around a Starbucks. That's the difference between us and [our competitors]. There's so much more thinking and labor, dollars, management and time that goes into it."

Always Remember the Bottom Line. Shannon still pinches every penny. "Don't get seduced by the excitement of the project," he warns, noting that he learned the hard way to negotiate fixed-fee contracts with his architects rather than pay a percentage of the construction budget.
 

Rosalind Resnick is a New York-based freelance writer, entrepreneur, investor and author of The Vest Pocket Consultant's Secrets of Small Business Success.

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