KNOXVILLE, TENN. — Regal Cinemas will temporarily suspend operations at all of its 536 U.S. theaters beginning Thursday, Oct. 8.
British owner-operator Cineworld (LON: CINE) owns Knoxville, Tenn.-based Regal Cinemas, which has about 7,000 screens across its U.S. portfolio of theaters. Cineworld also announced plans to close all of its theaters in the United Kingdom this week. The closures will impact about 40,000 employees, according to Cineworld.
“This is not a decision we made lightly, and we did everything in our power to support a safe and sustainable reopening in the United States,” says Mooky Greidinger, CEO of Cineworld.
“From putting in place robust health and safety measures at our theaters to joining our industry in making a collective commitment to the CinemaSafe protocols to reaching out to state and local officials to educate them on these initiatives, we are grateful for and proud of the hard work our employees put in to adapt our theaters to the new protocols,” he adds.
While theaters in several major markets, most notably New York City, remain closed, many large cities have permitted theaters to reopen at limited capacities in recent weeks. Venues located in Manhattan’s famous Broadway District that showcase plays also remain closed indefinitely.
However, audiences have largely signaled a reluctance to return to the venues, prompting several major studios to again delay releases of major motion pictures. Only about 22 percent of American moviegoers feel comfortable returning to theaters, according to a CNBC report based off a recent Morning Consult study.
“Many consumers are still skittish about being in theaters or similar settings,” says Rick Scardino, principal and director of retail brokerage at Lee & Associates’ Chicago office. “Trips to theaters aren’t considered necessity visits and in general, people have less disposable income to work with these days. In addition, as a result of quarantining, people have become more accustomed to streaming and staying home as opposed to going out to dinner and a movie. It’s something of a perfect storm of bad news for the industry.”
Scardino also notes that many other retail users, particularly restaurants, that lease space in shopping centers anchored by theaters are suffering from the loss of traffic that these venues typically generate. The theater business carries hefty overhead costs in the form of rents for large footprints and numerous labor costs. For some operators, the financial losses of closing outright are less severe than opening to reduced crowds, Scardino says.
Among the most prominent of those films to be delayed a second time until early April is “No Time To Die,” the 25th entry in the James Bond franchise that MGM Studios produced. Other films that were pushed back to 2021 release dates include Marvel superhero movie “Black Widow,” and long-awaited action sequel “Top Gun: Maverick.”
The stock price of Cineworld, which trades on the London Stock Exchange, opened at $25.20 per share on Monday, Oct. 5, down from $219.60 per share a year ago.
Other major theater owners have also taken hits following the announcements of several studios to further delay major releases. On Friday, Oct. 2, ratings agency Standard & Poor’s downgraded the credit rating of Kansas-based AMC Theatres (NYSE: AMC), which closed at $4.48 per share on Friday, Oct. 2. That company’s stock price is down approximately 40 percent year-to-date.
— Taylor Williams