Russian cinemas forced to close as economic crisis bites

The spate of closures has led to an estimated 2.5% drop in number of screens in Russia this year so far. It has affected a variety of operators including the Karo chain, which is one of the country’s lead operators. It closed a Moscow cinema in January.

It is understood that smaller operators have been under increasing financial pressure with some unable to pay rents.

Eduard Pichugin, the CEO of Cinema Invest and founder of Kronwerk Cinema chain, said the operators have struggled to pay rents as about half of the country’s cinemas are located in shopping centres, which suffer from fluctuating rents.

He added: “Rental rates for retail space have always varied, but as soon as the crisis hit and rouble radically devalued, some cinemas found themselves unable to continue to pay the rent.”

Pichugin predicts the larger chains will look to snap up some of the smaller cinemas, while some operators will be forced to merge to survive.

He added, “Retail business in general is in trouble. They will most definitely choose merger strategy of survival to meet rising rental rates, cinemas being no exception.”