Cinema operator to close all UK venues putting 5,500 jobs at risk
Cineworld is to close all its venues in the UK and Ireland for an indefinite period from this Thursday (October 8) – putting 5,500 jobs at risk.
The cinema operator says the contined coronavirus crisis has made the industry “unviable”.
The company owns 128 UK and Irelands cinemas, including North West venues at Ashton-under-Lyne, Bolton, Didsbury, Leigh, Runcorn, Speke, St Helens and Warrington.
The news comes after the announcement that the screening of new James Bond film, No Time to Die, has been delayed until next April.
Mooky Greidinger, CEO of Cineworld, said: “This is not a decision we made lightly, and we did everything in our power to support safe and sustainable reopenings in all of our markets – including meeting, and often exceeding, local health and safety guidelines in our theatres and working constructively with regulators and industry bodies to restore public confidence in our industry.
“We are especially grateful for and proud of the hard work our employees put in to adapt our theatres to the new protocols and cannot underscore enough how difficult this decision was, Cineworld will continue to monitor the situation closely and will communicate any future plans to resume operations in these markets at the appropriate time, when key markets have more concrete guidance on their reopening status and, in turn, studios are able to bring their pipeline of major releases back to the big screen.”
Russ Mould, investment director at Manchester investmet platform AJ Bell, said: “Cineworld will not be the only business that must temporarily close its doors for the second time after suffering from weak demand during the pandemic.
“Despite everything governments are doing to restart economies, a lot still comes down to consumer appetite for doing certain things and going to the cinema has not proved to be the resilient leisure activity it was once thought to be.
“Most of the problems have been out of Cineworld’s hands.
“The primary driver to go to any cinema is the film slate and there just hasn’t enough big-name releases to draw in a crowd since big screens reopened in the Summer. Cineworld and other operators have tried to get the message across that their theatres were safe and clean, but that communication hasn’t been enough.
“Cineworld was loaded up with debt going into the crisis and now it seems inevitable that it will have to raise a substantial amount of money to help it continue servicing debt.
“Shareholders have suffered a 50%+ slump in the share price upon the latest news and any equity raise is likely to be done at a discount to the already-depressed market price. That may prompt Cineworld to see if it can use more debt rather than equity to prop up the business.
“The decision to push back the release of the new James Bond film, No Time to Die, to April 2021 means there is now a six-month wait for this blockbuster film. Will Cineworld have to wait this long before reopening or will it be confident enough to return earlier?
“There are several other big name films scheduled for release over Christmas which could be a big enough draw, suggesting that Cineworld may only have to wait a few months. However, studios are going to be very nervous about risking a release in this climate and if James Bond can be delayed, then so can other releases.”
