Off-stage, Chanhassen Dinner Theatres performs a turnaround

After battling back to solid profitability following several years of losses, Chanhassen Dinner Theatres is striving for something closer to "practically perfect," as Mary Poppins says in its current production.

Last year, the business, one of the Twin Cities' few for-profit theaters, produced its best financial performance in 25 years. Its profit stretched well into six figures, a big contrast to the $200,000 to $500,000 losses it saw for several years after the 2008 ­downturn.

The turnaround is due as much to work that the company has done offstage as on, employing strategies that work in any business. It diversified its offerings to attract new customers and get old ones to visit more often. It also lowered costs and made better use of its sprawling facilities.

Chanhassen Dinner Theatres turned one of its side theaters into a comedy club and the other into a space for a concert series. A separate space, used as a theater long ago, is now rented out for weddings and other events. And a pub rounds out the complex in the southwest suburb of Chanhassen.

The company also cut the action on its main stage from three productions a year to two, saving about $500,000 in annual spending and creating more flexibility in the length of a show run. Typically, a show runs for six months. At the moment, there's talk that "Mary Poppins," which opened on Feb. 27, will run longer than that.

All those moves boosted revenue by $2.3 million, and diversified the customer base. In the past, productions on the main stage provided nearly all of the company's ­revenue. Now, it's 80 percent.

By filling the "Chan's" two smaller theaters with comedy and music rather than dinner theater, the company stopped dividing the audience for its musicals.

"Our biggest competition was ourselves," said Michael Brindisi, president and co-owner of the company and its artistic director since 1989.

"There is such a thing as too much musical theater," said Stevie Ray, executive director of Stevie Ray's Improv Company, which operates the ­comedy club at Chanhassen Dinner Theatres. "They needed to get current audience members to see something other than a play."

The strategy emerged from a new ownership team that included Brindisi and another dozen investors, including Tamara Kangas Erickson and Jim Jensen, who purchased the theater from Thomas K. Scallen in 2010.

"I said at the outset that the purpose is no more to make money than the purpose of life is to breathe, but if we don't make money we won't breathe," said Jensen, who is CFO at Lennick Aberman, a business consulting firm in Minneapolis.

Many of Chanhassen's patrons see it as an institution that they love, but at $60 to $84 for dinner and a show, it's a special occasion outing that's made once or twice a year.

Peg Shoke of Minnetonka has been attending productions at the main stage for six years. "I pick and choose for a birthday or an anniversary," she said. "My parents come to every one."

At the end of 2013, only 6 percent of patrons were crossing over from the main stage to concerts, comedy clubs, the pub and other offerings, but executives said they hope to more than double the crossover business.

Customer Charlie Labs is not a musical theater fan and has no plans to see "Mary Poppins," but he visits the complex more often than most theatergoers. On a recent weekday afternoon, he and a couple buddies stopped in Brindisi's Pub for lunch. "They have a great happy hour lounge," said the Chaska resident. Brindisi occasionally stops in to his namesake "Cheers"-like pub to hand out free show passes to frequent customers.

The new owners knew when they purchased the theater in 2010 that Chanhassen needed to freshen its image. Jensen said he realized the business had to change when he heard a young woman remark how much her grandmother loved Chanhassen. "We needed diversification in our business model and show selection," he said.

Brindisi is quick to say there is no formula, however. "We go with the wind. We don't want to get pigeonholed," said the director.

The concert series, which plays in the Fireside Theater where "I Do, I Do" ran for 22 years, targets another audience. More of a tribute than lookalike-soundalike productions, recent tributes to the Eagles and Fleetwood Mac have been extremely popular. The diverse tributes have included such artists as Linda Ronstadt, Johnny Cash, James Brown, the Beatles, Led Zepplin, the Carpenters, as well as the British Invasion, divas, power ballads and rock sirens. Last year, the series added $592,000 in revenue.

The wedding and banquet business, which has been ramping up since 2011, kicked in $585,000 in revenue last year. The former Courtyard Theater space, now referred to as the Club, can accommodate events for 200 to 300 people.

While the wedding receptions and happy hours provide a boost, Brindisi said the health of Chanhassen Dinner Theatres hinges on filling its main theater, the largest in Minnesota.

"We're a for-profit theater. The nonprofits have funding and contributions," he said. "Our process is simpler. The goal is to sell enough tickets to pay everybody."

Steve Peters, a member of the Chanhassen ownership group who also owns a theater and stadium management firm in Iowa, said, "We don't want to step too far afield and do 'Hair' or 'American Idiot,' but we do a good job of offering something for our traditional audience and a younger one."

Savannah Findlay, a senior at Herman-Norcross Community School in Herman, Minn., has seen "The Little Mermaid," "Hairspray," "Joseph and the Amazing Technicolor Dreamcoat" and "Jesus Christ Superstar," at the main stage. "The shows are great and the food is usually good," she said. "I plan to return every year."

Future plans include updating the lobby, remodeling bathrooms, replacing carpet and installing a new sound system in the Fireside Theater. With only about a dozen equity dinner theaters still operating in the U.S., Brindisi said he takes nothing for granted. "Everything can turn in the blink of an eye in this business," he said.

John Ewoldt • 612-673-7633