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AMC scales back plexes in turnabout

Circuit may shutter screens

In a dramatic retreat from its aggressive megaplex-building strategy, AMC Entertainment revealed Wednesday that its future complexes will be smaller than the 24- and 30-screen sites it has built in the past couple of years.

AMC co-chairman Peter Brown admitted the circuit is considering closing screens at some of its nine 30-screen plexes, because they were a “bit too big” in many of its markets.

The new AMC prototype will shrink to 20 screens, Brown told Wall Street analysts on a conference call.

In a later interview with Daily Variety, AMC’s senior VP for finance, Craig Ramsey, said AMC plans to close six screens at its Olathe Station 30 in Kansas City, Mo., to make way for restaurant space.

Recently, the circuit has taken the cost-saving measure of partially closing some of its larger plexes on weekdays and reopening them during the busier weekend hours.

‘Experiment’

Ramsey said the permanent screen closures are an “experiment” that may be followed at some of AMC’s nine 30-screeners.

AMC’s decision is a stunning turnabout for the exhib, which pioneered the megaplex concept. Other major exhibs followed but limited the size to 18-20 screens in most cases.

But recently, top Regal Cinemas execs told distributors that its megaplex building would also be “less aggressive” than it had been in the past.

AMC’s building policy became a subject of much dispute in the exhibition industry, particularly when the company opened its giant plexes directly in competition with other exhibs.

Because theaters in the same zone typically refuse to play the same pictures day and date, the exhib has had to operate its huge theaters with only a portion of the available product in some areas.

Ramsey said AMC had negotiated with the landlord at its Kansas City theater to give back some of the space it has leased. The landlord will arrange a restaurant to take over the space, with the choice of restaurateur subject to AMC’s approval, Ramsey said.

He noted that some of the 30-screeners “are doing well and we would not turn any of the screens back. But there are other situations that if we were to rebuild those we would build them as 24-screen or in some cases as 20-screens.”

In the future, “the theater we are typically going to build is a 20-screen” plex, he added.

Insufficient product

He said the change in strategy stems in part from the difficulty in getting enough product to spread across so many screens. It also had a lot to do with parking needs for a 30-screen plex. Ramsey emphasized that decisions about plex size would be made on a market-by-market basis.

The revelations came a day after AMC revealed it lost $19.1 million in the March quarter, compared with $3.7 million a year earlier.

On April 1, the end of its 1999 fiscal year, AMC said it was operating 60 megaplexes, accounting for half of its circuit of 2,645 screens.

Those screens accounted for 57% of the company’s cash flow in the fiscal year, AMC said, a sign of how its smaller multiplex theaters have suffered from competition brought on by bigger plexes.

There have been signs for several months that AMC was moving away from the 30-screen plexes but the company was thought to be planning to build plexes with at least 24 screens.