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Topic: Empire to focus on Sobeys, sells theatres to Cineplex, Landmark
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Andrew McCrea
Jedi Master Film Handler
Posts: 645
From: Winnipeg, Manitoba, Canada
Registered: Nov 2000
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posted 06-27-2013 12:52 PM
From The Globe and Mail
quote:
Empire to focus on Sobeys, sells theatres to Cineplex, Landmark
The parent company of Sobeys announced $98.6-million or $1.45 per share of adjusted earnings in the fourth quarter
Empire Company Ltd. is exiting the movie-theatre business as it narrows its focus on its grocery business after the recent deal to buy Safeway Inc.'s Canadian stores.
Stellarton, N.S.-based Empire said it has struck two separate deals to sell 46 movie theatres in Atlantic and Western Canada as well as Ontario.
In a $200-million transaction, Cineplex Inc. will acquire 24 Empire theatres in Atlantic Canada – 13 in Nova Scotia, six in New Brunswick, three in Newfoundland and Labrador and two on Prince Edward Island – and two in Ontario.
Meanwhile, Western Canada theatre operator Landmark Cinemas Inc. plans to buy 20 Empire locations in Ontario and Western Canada in an agreement valued at $55-million.
For Toronto-based Cineplex, the agreement broadens its national presence, with a foothold in Atlantic Canada.
Empire president and chief executive officer Paul Sobey said in a news release Thursday the decision to sell the movie-theatre division "aligns with the strategic direction of the Company to focus our resources on our food retail business through our 100 per cent interest in Sobeys Inc. and on our related real estate investment through our 42.8 per cent ownership interest in Crombie REIT."
Empire said it intends to use proceeds of about $216-million for debt repayment.
Ellis Jacob, president and CEO of Cineplex, said in a statement: "This is a significant event for Cineplex, as the acquisition will provide our company with a truly national, coast-to-coast presence.
"This acquisition is an excellent strategic fit for Cineplex. It provides us with a presence in Atlantic Canada and it will enable us to leverage our existing businesses to maximize shareholder value."
Empire also said on Thursday that it posted fourth-quarter profit of $98.6-million or $1.45 per share of adjusted earnings, up from $89.6-million or $1.32 in the year-earlier period.
Sales reached $4.31-billion, up $235.1-million or 5.8 per cent.
Empire said earlier this month that Sobeys has struck an agreement with Safeway Inc. to buy all of its Canadian assets for $5.8-billion.
The deal includes 213 full-service grocery stores in Western Canada and 199 in-store pharmacies.
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Terry Lynn-Stevens
Phenomenal Film Handler
Posts: 1081
From: Toronto, Ontario, Canada
Registered: Dec 2012
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posted 07-07-2013 11:11 AM
quote: Mike Rivest
US chains do not do well in Canada
National General Cinemas 1967-1973
AMC was not doing terrible, the problem was is the theatres were sitting in a competitive zone, they needed substantial upgrades, and a complete digital projector conversion for all of their cinemas. So it was smart for AMC to exit the marketplace especially with new ownership.
With Empire Theatres, Cineplex sold them a bunch of second tier cinemas and some of the better cinemas were located in competitive zones as well, the only Toronto Cinema Empire had was the Empress Walk, Empire eventually closed it as it was under performing and was too close to Cineplex Sheppard.
What Cineplex has done with the purchase of AMC is made the barrier of entry very difficult for a competitor to enter the marketplace. The AMC theatres they purchased in the Greater Toronto Area are simply competitor theatres aside from the Interchange 30 which does not compete with the Cineplex next door as that cinema does not receive first run films.
Now, not sure if you have the box office data, but these AMC cinemas that they purchased are not grossing more money now than when they did when AMC was in ownership, they all need substantial upgrades and renovations and yet they sometimes sit close to another Cineplex less than 2-3 miles away.
Although Guzzo has some nice theatres, I don't take them all that seriously, nor do I think Landmark has a chance, they will be just Empire Theatres.
IMO, if Regal can enter the Canadian Marketplace and challenge the distribution power of Cineplex and have the government of Canada do away with the competitive zoning that Cineplex has, then Regal would have a chance. The size of Regal in the United States is massive and it could work against Cineplex.
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Terry Lynn-Stevens
Phenomenal Film Handler
Posts: 1081
From: Toronto, Ontario, Canada
Registered: Dec 2012
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posted 07-12-2013 05:46 PM
quote: Dave Macaulay
I don't agree that AMC was doing well in Canada. The only locations making money were Whitby and Kanata. Since they decided to bail out (several years ago) they tried to sell the whole chain as a whole but nobody would take it: the locations in competitive zones were hopeless. With the change to digital, the cost of conversion was an issue and AMC decided to sell the Canadian locations piecemeal. Cineplex took the money pits since they controlled the competitive zones and could put first run in them. The downtown Toronto location is now doing well, I believe, with Cineplex running it. Empire took the profitable Whitby and Kanata sites because they would be "first in" and control the competitive zone if someone else moved in.
AMC was still stuck with three locations nobody else wanted: Interchange, Courtney Park, and Kennedy Commons. Kennedy was demolished. Courtney Park has been half closed: the original lobby and screens 1-10 are locked off and dark, only cinemas 11 to 24 are open with second run and foreign product. Interchange as well is second run and foreign, I don't know how many screens are actually in use there though (only about 8 movies are listed these days, and it opened with 30 screens). These two locations are "anchors" for entertainment malls (a bunch of bars and restaurants) and walking away from their leases would incur multi million dollar penalties.
The competitive zone system does protect smaller operators from having Cineplex/Famous/Galaxy/Alliance move in and take over.
AMC was doing ok in Canada, check out the box office numbers from Rentrak and they are on par for anything that is in a competitive zone, now that Cineplex has them they are not doing any better. The Courtney Park is operating with all cinemas, it is the Interchange 30 that is in half cinema mode.
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Mark Ogden
Jedi Master Film Handler
Posts: 943
From: Little Falls, N.J.
Registered: Jun 99
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posted 07-12-2013 07:04 PM
It's hard to believe that AMC was doing well in Canada, considering the way they quit their operations there to make themselves more attractive to the Wanda Group (unless the Chinese have a more fundamental problem with the Canadian market that I am not aware of).
I spend a great deal of time in the GTA, I was just there last week. If the Yonge/Dundas site is any indication, AMC never really "got" the market in any competitive sense. I've been going there since it opened, and even though it was a nicer theatre it has always struggled against (and this is nothing personal if either of you work there) the incredibly tacky Cineplex Scotiabank. Even now that this is a Cineplex location, they have some of the most bizarre programming I've ever seen: maybe one real hit; the rest Bollywood films, long holdovers, an occasional art film that sometimes duplicates at the Carlton, and some repertory titles off of what I am guessing is BluRay. I ate at the Jack Astor's up there last Sunday and I stuck my head in, and it was dead. I don't understand the booking philosophy, especially in view of the foot traffic that area gets. This last weekend the little concrete park across from Eaton Center looked like a scene from Soylent Green.
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Terry Lynn-Stevens
Phenomenal Film Handler
Posts: 1081
From: Toronto, Ontario, Canada
Registered: Dec 2012
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posted 07-12-2013 07:35 PM
quote: Mark Ogden
. I don't understand the booking philosophy, especially in view of the foot traffic that area gets. This last weekend the little concrete park across from Eaton Center looked like a scene from Soylent Green.
Mark, when both the AMC 24 opened, it was grossing about $11 million a year, the Scotia Bank grossed $11 million in the same year as the AMC 24 when it opened. So far in 2013, AMC 24 is about $1.5 million ahead in ticket sales than Scotia.
quote: Mark Ogden
I spend a great deal of time in the GTA, I was just there last week.
Well, if you were there last week, the AMC 24 grossed $338k vs $178k from the Scotia. These two Cineplex theatres are less than 1.5 miles apart.
quote: Mark Ogden
fundamental problem with the Canadian market that I am not aware of
Mark, the problem is that Cinepex owns 78 percent of the market, AMC would not get enough product in a competitive zone.
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Mike Rivest
Expert Film Handler
Posts: 185
From: Montréal QC Canada
Registered: Nov 2009
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posted 10-15-2013 05:41 PM
Kanata 24 and Whitby 24 will not go to Cineplex
http://www.mediacastermagazine.com/press-releases/story.aspx?id=1002648537
says
Cineplex Receives Competition Bureau Approval to Acquire 24 Empire Theatres in Atlantic Canada
2013-10-10T20:38:12+00:00
TORONTO, ONTARIO--(Marketwired - Oct. 10, 2013) - Cineplex Entertainment (TSX:CGX) today received a No Action Letter ("NAL") from the Commissioner of Competition, enabling the company to proceed with an acquisition of 24 Empire theatres in Atlantic Canada.
The parties had requested approval from the Commissioner of Competition to allow Cineplex to acquire two additional theatres - in Whitby and Kanata, Ontario - but the proposed transaction was subsequently restructured and those two theatres are not included in the NAL and will not be acquired by Cineplex.
The revised cash purchase price is approximately $194 million, subject to certain adjustments to be made at closing, and the transaction is expected to close later this month.
"Today's announcement brings us an important step closer to our goal of establishing a truly national, coast-to-coast presence for Cineplex," said Ellis Jacob, President and Chief Executive Officer, Cineplex Entertainment. "We look forward to providing our Atlantic Canadian guests an exceptional entertainment experience."
On closing, Cineplex will remain Canada's largest theatre exhibitor, operating 161 theatres and 1,635 auditoriums from coast to coast.
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