Flush with funds from its recent sale of $ 100 million in preferred stock, AMC Entertainment plans to build even larger theater complexes with a new concept: Rather than having traditional department stores or other big retailers, malls would be anchored by cinemas.
This new type of complex would consist of at least 30 screens situated in a megamall in a major metropolitan area. In addition to the megaplex theater, the “entertainment center” would include vidgame and other arcades, sports bars, snack bars, restaurants and paraphernalia shops. The theaters would seat a total of 4,000-6,000 patrons.
The rationale is simply economic. More screens are needed to compete with ever-expanding cable channels.
“The entertainment experience has to be continually upgraded to compete with the home entertainment business,” said Phil Singleton, AMC’s chief operating officer.
The concept is somewhat validated by the Kansas City-based circuit’s experience with the hometown Ward Parkway Shopping Center, where it opened a 12 -plex in November 1992.
The theaters were a success from opening day. Now AMC is adding 10 screens to open in late spring or early summer. “No sooner did we open a big string of theaters than we find it is not enough,” said Singleton.
AMC is believed to have plans on the drawing board and sites in focus, but Singleton won’t say where. Likely locales include big markets such as Los Angeles, Miami, possibly Washington, Philadelphia, Chicago or even New York, although AMC has not thus far targeted much of its growth at the Big Apple.
Although people ages 16-30 are the most frequent moviegoers, Singleton feels that with more films being produced, more screens are needed to exhibit them, to have something for people of every age.
Older malls where there are department stores in decline could work as sites for these entertainment centers.
Retailing experts believe that about 1,000 of existing 2,400 shopping malls could use the lift new and attractive theaters could provide.
Ward Parkway is a prime example. It is bustling with business now, but that was not the case two years ago when the landlord was scrambling for a turnaround.
The downside is that the large theater complex raises two problems: parking and crowd handling. Sufficient, convenient parking is up to mall owners, but a prerequisite for AMC.
Peter Brown, chief financial officer, would say only that the new money will go to expand the company.