Cost-cutting leaves 200 jobless
Australian casino operator Crown Resorts continues to reshuffle its business assets and executive suite. Chinese President Xi Jinping’s war on corruption, which prompted Crown boss James Packer to unload more than half his stake in Melco Crown, also led to the arrest of more than a dozen Crown employees last October.
Longtime Packer intimate John Alexander has assumed the dual role of company chairman and chief executive, replacing former CEO Rowen Craigie, who departed at the end of February. According to Bloomberg News, the sweeping changes reflect Crown’s new direction, including an increased focus on its Australian operations. The company has shelved a proposed initial public offering of a trust holding the company’s Australian hotels; dropped plans to demerge its international business; and also cancelled a Las Vegas casino plan.
Crown also is cutting costs following a sharp decline in its VIP business, with a reported 200 employees losing their jobs at Crown Perth.
According to CalvinAyre.com, Alexander may also unload Crown Perth’s $40 million luxury yacht Infinity and three private jets, which primarily served Chinese customers.
Last month Crown announced a special dividend and an AU$500 million (US$384 million) stock buyback. “If they’re willing to pay that, then they’re happy with their cash position,” said William O’Loughlin, investment analyst at Rivkin Securities Pty in Sydney. “That buys a little bit of confidence. The decline in VIP revenue was probably well anticipated by the market.’’
Packer, whose investment company owns 48 percent of Crown, returned to the board in January. He has said it is his priority to resolve the situation in China where Crown employees including international executive Jason O’Connor have been held since last October. They were accused of gambling crimes, but formal charges have not yet been filed. The team reportedly was marketing to VIPs in China in violation of the law.
Even so, Alexander says the crisis will not cause Crown to fully withdraw from China. “Frankly we look at that as a pause rather than a retreat,” he told reporters in Melbourne. “We are waiting for clarity on China and the details behind that, but no intention to retreat from where we stand in the market.”
Amid the crackdown, Crown continues to develop a six-star AU$2 billion high roller casino resort on the Sydney waterfront, expected to be complete in 2021.
Alexander thanked Craigie for his role building Crown Resorts in Australia. “In particular, Rowen has ensured Crown Melbourne has remained the largest and most successful integrated resort in Australia, with the highest standards of social responsibility,” Alexander said. “Rowen has also played a major role in Crown’s expansion in Perth, Macau and in the award of a new license in Sydney.”
Craigie joined Crown Melbourne in 1993 and was appointed chief executive and managing director of Crown Resorts in 2007.
In a statement, Craigie said he was “fortunate to have worked closely with three remarkable Australian entrepreneurs in Lloyd Williams, Kerry Packer and James Packer.” Craigie will work as a consultant with Crown on specific projects, the Australian Financial Review reported.