In another sign of tough economic times, Robert Mondavi Corp. is reducing its role in its wine-and-dining attraction at the new Disney's California Adventure, turning over day-to-day operations of the Golden Vine Winery complex to the Anaheim amusement park. In addition, chef Wolfgang Puck has closed his Avalon Cove restaurant at the California theme park.
On Monday, Mondavi said it was changing its role in Golden Vine from partner to sponsor, taking a $12 million to $13 million loss in the process. Mondavi's original 10-year licensing agreement to manage the attraction itself was unusual for Disney, which as a rule maintains control of businesses inside its parks.
"Our decision to turn over operations was because of ongoing operational losses and losses we would have incurred," said chairman Michael Mondavi.
Open only since February, the $1.4 billion, 55-acre Disney's California Adventure has reportedly failed to meet attendance expectations, thanks to a weakening economy. The Sept. 11 terrorist attacks on New York and Washington, D.C., which resulted in the temporary closing of the Disney parks, only exacerbated the problem. Like adjacent Disneyland, the new park has the usual thrill rides and kid attractions, but also aims for a more adult audience by serving alcohol and offering more high-end dining.
Avalon Cove, which was in the heart of the "Paradise Pier" seaside-themed district, apparently failed to meet the financial goals of Los Angeles—based Wolfgang Puck Food Co., which is best known for the Spago restaurants. No one at the company was available for comment. Disney will shift the restaurant to a family focus and reopen it by the holidays.
Mondavi president and CEO Greg Evans blamed the wine company's losses on "steep reductions in travel and entertainment spending, and other economic factors." The travel and entertainment sector -- which includes wine sales to airlines, high-end restaurants, hotels and resorts -- represents 25 percent of Mondavi's revenues.
Although called Golden Vine Winery, the Disney project was not actually a winery; rather it featured wine-tasting bars, a demonstration vineyard, retail stores and dining spots, including The Vineyard Room, an upscale restaurant featuring a four-course prix-fixe menu. Mondavi had 120 employees working at Golden Vine -- about half the number it employed on opening day -- and company spokeswoman Nancy Light said it was unclear how many will remain after the 30-day transition period to Disney management.
Mondavi wines will still be poured in Golden Vine's tasting room, but the new arrangement potentially allows other wineries inside the door. Mondavi will also continue to sponsor "Seasons of the Vine," a film on viticulture and wine production that greets visitors to the attraction.
The change in the Disney relationship is part of broader cost-cutting measures planned at Mondavi, which recently sold its Vichon Mediterranean brand and placed its La Famiglia di Robert Mondavi winery facility on the market. On Monday, the company lowered its overall earnings forecast. For the fiscal year ending June 30, 2002, the company now expects adjusted earnings per share to be 10 percent to 20 percent below fiscal 2001's per-share earnings.
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