Cineworld Plans to Close Six Cinemas in Cost-Cutting Efforts
Cineworld, one of the world’s largest cinema chains, has announced plans to close six of its cinemas in the UK as part of a cost-cutting strategy to reduce debt and improve financial stability. The company has stated that the affected cinemas, located in Glasgow Parkhead, Bedford, Hinckley, Loughborough, Yate, and Swindon – Regent Circus, will shut down in late September 2024 pending legal approval.
In a statement released on Saturday, Cineworld described these locations as “commercially unviable” due to the increasingly high and unsustainable operating costs. The company has also stated its intention to restructure its lease portfolio and rental terms with landlords in the UK in order to return the business to profitability and ensure long-term sustainability.
The announcement comes as the company faces mounting financial challenges, which have been further exacerbated by the impact of the COVID-19 pandemic on the film industry. Sky News has reported that the restructuring plan could potentially lead to the closure of 25 UK cinemas. However, Cineworld has clarified that this is not a form of bankruptcy but a legal process that will allow the company to make necessary efficiencies to become profitable again.
Employees at the affected cinemas will be offered redeployment opportunities at nearby sites whenever possible. In cases where this is not feasible, the abandoned sites will be taken over by rival cinema chains. The company has stated that the total number of impacted sites will be confirmed once the restructuring process is complete.
Cineworld currently operates over 100 cinemas in the UK, including the Picturehouse chain, and employs thousands of staff. However, the company’s public relations adviser has declined to confirm the exact number of employees. Under the leadership of the Greidinger family, Cineworld grew into a global industry giant, acquiring companies like Regal in the US and its British counterpart in 2018 and 2014, respectively.
However, the company’s multibillion-dollar debt burden led it into crisis, resulting in Chapter 11 bankruptcy protection in 2022. Last August, Cineworld delisted from the London Stock Exchange as its share price plummeted, raising concerns about its survival. As part of the deal struck during its bankruptcy, the company exchanged several billion dollars of debt for shares and received a significant injection of new funds from hedge funds and other investors. After emerging from bankruptcy protection, Cineworld appointed Eduardo Acuna, who previously ran Mexican cinema chain Cinepolis’s operations in the Americas, as its new CEO.
