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D’lush Expands Market for High-End Thirst Quenchers

D’lush Expands Market for High-End Thirst Quenchers

Restaurants: ‘Deluxe Beverage Joint’ Targets Well-Heeled Youth

BY TANYA RODRIGUES

Staff Writer

D’lush, a locally based, self-proclaimed “deluxe beverage joint,” is making plans to expand.

The company launched its first location in June at Fashion Valley Center’s food court, serving non-alcoholic fruit, ice cream, coffee and tea drinks with a generation-Y feel. One of the drinks was named “hottie chocolate” and a smoothie mix was dubbed “XTC.”

At a board meeting earlier this month, directors decided the company needed to raise $1.5 million.

Another major decision was to open more locations in San Diego County, said Jeffery Adler, the company’s founder and CEO.

The other option was to launch another location in a completely different market, Adler said.

The board decided to grow D’lush in San Diego because the company could better leverage its marketing dollars here, Adler said. He’s already begun scouting for locations.

Adler plans to open the second location this spring.

John Roberts, a member of D’lush’s board of directors, said the board will likely meet again in the next 60 days and look over the shop’s winter sales figures. They will also discuss what Adler found in real estate options for the new location.

Possible areas include La Jolla, Downtown or Del Mar. D’lush is considering University Towne Centre, Adler said.

High Energy Atmosphere

According to Adler, one thing will be sure , the new location will also embrace D’lush’s target demographic of well-off young people.

Although Adler said the demographic was 14-23, he said customers range in age from 7 to 70.

The average drink can cost $3.50, Adler noted.

Adler’s vision is for D’lush to have an upbeat, entertaining atmosphere somewhat inspired by the Tom Cruise movie, “Cocktail.”

In the movie, Cruise plays a bartender who performs , tossing bottles in a choreographed way and keeping the music’s beat , while fixing drinks and interacting with customers.

There’s more atmosphere to come, Adler said. The company ordered outdoor chairs and tables. D’lush’s lease at Fashion Valley includes 800 square feet of adjoining outdoor space.

Adler is planning to add more desserts and heavily promote the shop’s current treats. Two to three desserts will be phased in over the next several weeks, Adler said.

Building costs for the single store and the D’lush infrastructure has totaled more than $1 million, Adler said. He estimated that $350,000-$400,000 was spent on the building itself. The shop currently has 25 employees.

Sales of about $850,000 are expected in its first year. The following year, he expects sales of about $1 million and $1.3 million in year three.

Adler, the company’s founder, owns half the company. The rest is owned by about 30 separate investors, he said.

Holding On To The Dream

The idea for D’lush had been percolating for years. Adler, who was a retail consultant in Asia for many years, graduated with a law degree from Georgetown University, he said.

Adler almost launched D’lush a couple of years ago when living on the East Coast, but his business partner dropped out, he said.

In August 1999, Adler decided to move to San Diego and try again.

From there, he rebuilt the D’lush concept, and almost signed a single investor wielding a $1 million check. At the 11th hour, after a year of discussions, Adler decided against it because he thought the contract wasn’t going to be to his benefit.

He sought out smaller investors. Some are local and others are from as far away as Bangkok and New York City, he said.

Currently seeking a second round of funding, Adler will revisit many people he approached the first time. Some of them are well known in the beverage and youth industries. Among them is a major investor in Starbucks and an executive of youthful clothing chain The Gap, Adler said.

Roberts wants to keep D’lush focused and fresh.

“At the risk of oversimplifying, you always have to have a schedule and you always have to have a budget, and you keep them both,” he said. “And in between, you just have to be creative.”

He expects in five years, D’lush will be the same concept but will have variations because it has to adapt.

“It’s a young market, and they change, and we have to be with them,” Roberts said.

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