Schrager is a master of managing carefully modulated buzz, but now he wants something louder–and very risky for a man who’s made his mark by creating nightclubs and boutique hotels with a distinctive, elitist flair. The Studio 54 cofounder just completed a $15 million face-lift of the Mon- drian, officially adding it to his roster of hip hotels in New York and Miami Beach. Now he is about to announce the details of his first overseas enterprise and biggest deal ever: a $160 million joint venture with a large British real-estate company to develop four hostelries in London in two years. Schrager also plans to create a new company called IS Europe and to sell shares to the public. He would then, he says, be in a position to develop hotels rapidly in ““gateway cities’’ like Paris and Milan. ““I’m at a crossroads in my career,’’ the 50-year-old hotelier told NEWSWEEK. ““I don’t want to continue my one-at-a-time deals. I want to pick up the pace.''
Schrager’s not talking about expansion just in Europe, either. He’s weighing the benefits of an initial public offering with his U.S. company. In the meantime, he’s taken over management of San Francisco’s stately Clift hotel and expects to purchase the landmark soon. And taking a cue from themed, Disneyfied restaurants like Hard Rock Cafe, he and French designer Philippe Starck (who is responsible for the sleek look of most of his properties) are launching a line of hotel products that include furniture, bed linens, juicers and even the Paramount’s famous headboards ($3,500), with their large, gold-framed silkscreens of Vermeer’s 17th-century painting ““Lacemaker.’’ Says Schrager: ““Provided we can do it in a tasteful way, I don’t think it will take away from the cachet of our hotels.''
Cachet is Schrager’s business. Look at the Mondrian. He snapped up the ailing 16-story hotel two years ago for $17 million. Then he and Starck transformed the once garish homage to the famous Dutch painter into an elegant masterpiece of eclectic furniture, 2,000 yards of white diaphanous curtains and 40-foot mahogany doors. Overnight, celebrities ranging from Oprah Winfrey to Mel Gibson began flocking to the Mondrian. Oglers followed. The crowds have become so unmanageable that Schrager is now barring all but hotel and restaurant guests.
Mysterious glamour: The elusive question is, why are his hotels so popular? Somehow the shy hotelier has managed to cloak himself in an aura of Uber-hipness and sustain it over time. Occupancy rates average above 90 percent. Architecture critics say part of Schrager’s allure is the hotels’ witty design and playful furniture. Others say he pays obsessive attention to detail (down to the number of sharpened pencils in each room) and has an uncanny knack for wooing both celebrity investors (like Madonna and Peter Guber’s wife, Lynda) and celebrity guests. ““Ian has managed to transfer some of that mysterious glamour he brought to his nightclubs,’’ says Anthony Haden-Guest, author of a forthcoming book about Studio 54 called ““The Last Party.’’ ““There’s something a little reticent about him. People admire that.''
Well, sometimes reticent: some of Schrager’s success stems from good old-fashioned media manipulation–whether it’s carting in a $30,000 ficus tree or hosting a high-profile birthday bash for Madonna. He picked up his sense of the theatrical back in the days of Studio 54. After he and the disco’s co-owner, Steve Rubell, were busted for tax evasion in 1978, they emerged from jail wanting to buy hotels that would cater to the same sort of trendoids and celebrities who had frequented the nightclub. Morgans and the Royalton, their first two New York hotels, were instant hits. But just before the pair were scheduled to open their third, the Paramount, Rubell died, leaving Schrager to face some badly leveraged deals and an industry in a tailspin. Morgans and the Royalton wound up in bankruptcy.
After struggling a few years, Schrager rebounded, rescuing the New York hotels and buying the Delano in Miami Beach. Now can he take his formula to the masses? The strategy is two-pronged: continue building boutique hotels but also develop a chain of lower-priced, ““Gap-like’’ hostelries. ““I want to get as big as I can get and still do something really special,’’ he says. ““How big is that? I don’t know. But I’m incredibly ambitious.''
