Cineworld in Talks to Close Multiple Cinemas Amid Financial Struggles
- Cineworld considering closure of a quarter of its UK multiplexes
- Rent negotiations for about 50 locations underway
- Restructuring to be presented to creditors soon
Cineworld, a major cinema chain, is contemplating the closure of dozens of its cinemas to stabilize its finances. Sky News reports that the company, delisted from the London Stock Exchange last year, may shut down around 25% of its approximately 100 UK multiplexes.
In addition to potential closures, Cineworld is also looking to renegotiate rent agreements for about 50 of its locations. Sources suggest that these restructuring proposals will be formally presented to creditors, including landlords, in the upcoming weeks.
Cineworld's restructuring plan will likely be executed through a specific insolvency mechanism rather than a company voluntary arrangement (CVA). This move follows Cineworld's emergence from Chapter 11 bankruptcy in the US last year, which allowed the company to reorganize its debts and assets while continuing its operations.
The cinema chain's financial woes have been exacerbated by significant losses and competition from streaming platforms like Netflix and Amazon Prime. The pandemic also severely impacted its revenue due to enforced closures. At the peak of its operations, Cineworld employed 28,000 workers globally across 10 countries.
A spokesperson for Cineworld stated, “We continue to review our options, but we don’t comment on rumours and speculation.” Earlier, Sky News highlighted that Cineworld was collaborating with restructuring adviser AlixPartners on a plan that might lead to a sale or restructuring, putting several UK cinemas at risk.
This is not an isolated case in the cinema industry. Odeon and Empire Cinema have also faced closures recently, and the broader hospitality sector has seen significant shutdowns, including Whitbread's plans to close more than 200 locations and pub giant Wetherspoons shuttering several sites.
Tom Church, Co-Founder of LatestDeals.co.uk, commented, “The changing landscape of entertainment consumption and financial pressures have put immense strain on traditional cinema chains. It's a challenging time for the industry as a whole.”
I would be sad to see the local cineworld close however I must admit I do not go regularly due to the high cost of going to the cinema. I go if it is a special occasion or sometimes they do half price tickets, but always bring my own drinks and snacks because to eat and drink there is 1) very unhealthy and 2) very expensive… we have a Vue cinema where I live but it’s horrible compared to Cineworld and in a not very nice location whereas the cineworld is on a leisure park with restaurants so makes for a good day out (if you’re feeling flush!)
The one in the next town has been shut for months. Cinema is too expensive with a family. I've always thought if they made it cheaper more people would go
