Rival operators are circling the six English cinemas closed after the Empire Cinemas chain went into administration in early July, Screen has learned.
The Light Cinemas, Parkway Cinemas and Merlin Cinemas, all from the UK, along with Ireland’s Omniplex Cinema and Arc Cinemas are all understood to be considering taking over the sites. They are in Walthamstow, Wigan, Catterick Garrison, Sunderland, Swindon and Bishops Stortford.
Seven other Empire sites remain open while the Empire Sutton Coldfield has been closed since the Covid lockdown of late 2020.
“I believe that with a little bit of investment, a bit of renegotiation with the landlords over rents and innovative and creative management, they could be turned around,” said John Sullivan, founding director of cinema consultancy The Big Pictures. He is also involved in the Light Cinemas business.
The Empire administration comes at a time when the UK’s major chains Cineworld, Vue and Odeon are facing a severe post-pandemic financial squeeze which the spectacular box office success of Barbie and Oppenheimer is only partly able to relieve. The ongoing Hollywood actors’ and writers’ strikes is only adding to the long-term uncertainty surrounding UK exhibition.
Sullivan is predicting rival entrants into the exhibition sector may now threaten the long-term UK dominance of the big three, Odeon, Cineworld and Vue. Their current problems have left an “opportunity for a competitor to set up a challenger brand,” said Sullivan.
Tim Richards, chief executive of Vue International, recently acknowledged the number of films on release is still “significantly down” on pre-pandemic rates and that the sector is still suffering from “supply issues” with “36% fewer films released last year, 20% fewer films released this year.”
Last month saw the appointment of Eduardo Acuna as chief executive of troubled exhibition giant Cineworld in the place of veteran CEO Mooky Greidinger. The company, reported to have debts of $8.8bn announced in late June it was filing for administration in the UK and Ireland (where it has 128 cinemas).
The 10-screen Blackpool Odeon closed earlier this summer and is now expected to be turned into a self-storage facility, Odeon venues in Banbury, Oxford, Weston Super Mare and Ayr have also been shut down. Some of these venues have been in existence since the silent era.
Sullivan speculated Cineworld, Vue and Odeon “will have knocked on the doors as well” of the recently closed Empire venues - but may not be in a position to take them over.
“I would have thought [Vue, Cineworld and Odeon] are looking for big cheques; they’re looking for cashflow,” said Sullivan. “It would have to be very cashflow positive for any of those three… to make it worthwhile for their war chest.”
The timing of the Empire administration and venue closures was just three weeks before UK cinemas enjoyed their biggest weekend of recent years thanks to the ‘Barbenheimer’ effect. “When any business fails into administration or receivership, the receivers take very drastic action,” said Sullivan ”They don’t live on promises. A receiver cannot trade a business that is loss making. A receiver can’t operate on the basis that maybe it will turn around, maybe there will be a big hit next week.”
Antony Nygate, John Strowger and Danny Dartnaill, of BDO LLP were appointed joint administrators of the Empire business on July 7, 2023. They are now managing the company’s business and assets.
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