The Hoyts Corp.’s U.S. operation will continue consolidating its Northeast circuit with the addition of 45 screens over the next 12 months.
Aussie-owned Hoyts entered the U.S. market in 1986, and now has 430 screens in 67 locations, representing an investment of around $100 million.
The circuit is aiming to add 50 screens a year, mainly via leases within mall developments. With the exception of one or two small joint ventures, circuit also is now wholly owned by Hoyts.
Concentrating on the Northeast and keeping out of most major centers remains a key strategy, affirms prexy/CEO John Rochester. “The cost of operating in a city like New York can far outweigh the benefits you can derive,” he says. “We have a greater rate of return in the Northeast sector, and there are still plenty of opportunities there.”
Rochester puts revenue for 1991 at $110 million. Hoyts financed its move into the U.S. with backing from a Stateside banking syndicate, and 20% equity from the Australian company. The chain is now generating sufficient cashflow to pay off principal debt in addition to covering interest payments and capital expenditure, the exec says.
Rochester credits Hoyts’ U.S. success to tight management (under chief operating officer Morris Englander), sticking to core biz and containing overhead.
“We also haven’t been nervous nellies, afraid of taking commercial risks,” he adds. He offered as examples Hoyts’ 11-plex in Cleveland’s Tower City development, that city’s first downtown cinema complex in 20 years, and the opening of a 12-plex in Syracuse’s Carousel Mall despite Loews’ local presence.
The latter site has become one of Hoyts’ top performers though only open for three months. The Northeast flagship remains the 12-plex at Crossgates in Albany.
Rochester confirms that Hoyts has pulled out of expansion plans in the U.K. and Southeast Asia. “The U.K. is not the answer for us. There’s too much competition.” Hoyts’ studies of the Southeast Asian market concluded a worthwhile return could take up to five years.