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Another theater chain bankrupt
By SCOTT BARANCIK © St. Petersburg Times, published October 12, 2000 Not all movies have a happy ending. Nor, it seems, do all movie theater chains. Citing heavy competition from new "megaplex" theaters, General Cinema Theatres Inc. filed for Chapter 11 bankruptcy reorganization Wednesday. The chain is the latest among several peers to seek safe haven under the federal bankruptcy law while it tries to rebuild its business. Florida residents won't notice much difference, however. That's because General Cinema closed its remaining 11 theaters in the state last month. Just a year earlier, Florida was among the top three states in General Cinema's 23-state empire. The company closed its only Tampa Bay area theaters years ago. Wednesday's announcement was a tear-jerker for investors. Despite a temporary halt in trading, shares of GC Companies Inc. -- General Cinema's Chestnut Hill, Mass., parent -- fell $1.50, or 52.2 percent, to close at a 52-week low of $1.38. The stock began the year trading at $25.88. Movie theater chains have undergone fundamental changes in recent years. Cable television, VCRs and video-rental stores have lured away many potential customers, effectively gluing them to their sofas. In response, theater companies bulldozed their large, single-screen venues and replaced them with multiscreen facilities catering to a variety of tastes. More recent innovations such as graded seating and sushi bars have followed. But the drive to build megaplexes with as many as 30 screens has led to a glut in some areas. The Tampa Bay area soon will have three new multiscreen theaters, including the Muvico Majestic 20 that opened last week at Centro Ybor as well as a 20-screen Muvico theater within St. Petersburg's BayWalk development and a Regal Cinemas 10-screen theater at Tampa's Channelside. General Cinema is the latest chain to buckle under the pressure. United Artists Theater Co., Edwards Cinemas and Carmike Cinemas all filed for bankruptcy this year. And in August, Loews Cineplex Entertainment Corp. reported dropping revenues and warned it might default on its debt. The burden of competition is being felt in the bay area. AMC Theatres, for example, said it will shut two theaters in Clearwater on Oct. 15, adding to the hundreds it closed nationwide over the past five years. General Cinema said a committee of independent directors and outside consultants suggested bankruptcy as a way to retool its business. The chain will close 17 more theaters and renegotiate leases on some of its 78 remaining venues. General Cinema is North America's eighth-largest theater chain, with 1,060 screens. GC Companies Inc. also announced several management changes, including the resignation of chief executive Richard Smith and president and chief operating officer Robert Smith. Chief financial officer G. Gail Edwards was named president and chief operating officer and was put in charge of the restructuring. General Cinema president Frank Stryjewski will keep his position. Both General Cinema and its parent filed for Chapter 11 reorganization. Several subsidiaries, including one based in Florida, are filing instead under the Chapter 7 bankruptcy liquidation law. Edwards said the company will focus its rebuilding efforts on less-competitive cities in the Northeast and Midwest. "The plan," she said, "is to get our base business healthy." - Information from the Associated Press and Bloomberg News was used in this report.
 © 2006 • All Rights Reserved • St. Petersburg Times
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From the Times Business report
From the AP
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