NEW YORK — Carmike Cinemas Inc. and Wal-Mart Stores Inc. have both built successful businesses serving rural markets, primarily in the South and Midwest. Now the two have formed a joint venture to develop and operate family entertainment centers.
Under the agreement, Carmike will own 50% of the joint venture and will manage the entertainment centers, which will carry the “Hollywood Connection” marquee. Wal-Mart will retain the remaining 50% and oversee the real estate and development aspects of the project.
Carmike vice president of finance John O. Barwick III told Daily Variety the deal was put together by a money manager who is a Carmike shareholder, whom he declined to identify.
In its initial stages, the plan calls for three entertainment centers to open by the spring of 1998. All three will be located in shuttered Wal-Mart stores that were closed after Super Wal-Marts were opened nearby. The first will open in Goshen, Ind., late this summer, followed by a fall 1997 opening in Valparaiso, Ind., and a spring 1998 opening in Dekalb, Ill.
The entertainment centers will feature eight-screen theaters, skating rinks, arcades and a restaurant concept called Lieutenant’s that will serve scrambled dogs, a local specialty in Carmike’s hometown of Columbus, Ga. The recipe features a chopped-up frankfurter doused with chili and other condiments.
If the first three Hollywood Connection outlets are successful, the joint venture will expand, Barwick said. It is premature to speculate that the joint venture could become a publicly traded company, he said, but noted that it is expected to be self-sustaining financially.
Wal-Mart exec veepee and chief financial officer John Menzer said, “A partnership with Carmike provides us with a creative and productive use of our once-occupied stores.”