On Nathan’s and Coney Island…

June 12, 2009

Being a Brooklyn girl, I couldn’t pass up the opportunity to take a closer look at Nathan’s (NATH) 10-K. Back when I was a science geek (instead of an SEC filings geek), I spent two summers working at the New York Aquarium in Coney Island and wound up eating at Nathan’s more than a few times.

One of the things that surprised me was the number of hot-dog eating contests that are now being held around the country. Long before it became a spectator sport on ESPN, the Fourth of July contest used to be this local event that would maybe generate some coverage in the Bay News (another former employer). But now that there’s 18 regional events around the country (up from 13 just three years ago), the contest (and the various feeder — ha! — events) have become a huge media event, which, of course, generates lots of cheap publicity for Nathan’s.

Also interesting to me in the filing was that the uncertainties over the future of Coney Island — in a nutshell a developer wanted to turn it into a clone of the Mall of America before the economy cratered — have become a risk factor for Nathan’s. Here’s how they phrase it:

The original, flagship Nathan’s Famous restaurant is located in the Coney Island amusement district in Coney Island, New York. We believe that customer traffic at this location depends, in part, on the operation of the various area amusements and attractions. One such attraction, the Astroland Amusement Park, has reportedly been closed permanently as of September 2008. Additionally, the City of New York and a private real estate developer have proposed competing plans to redevelop the entire Coney Island amusement district. We are unable to determine the impact of the closing of Astroland and/or the redevelopment of the Coney Island amusement district; however, any substantial decrease in the number of visitors to Coney Island would likely have a material adverse effect on our financial results.

Once upon a time, I used to joke that I wanted to get married in Nathan’s back room (my parents and Scott quickly vetoed that idea). But the Nathan’s in Coney Island remains a special place. Hopefully, the tussle over Coney Island’s future won’t reduce the famed back room to a distant memory.

Image source: Jeffrey Stanton

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