Exhib Regal shutters its FunSpace arcades

Unspecified number of layoffs come with move

Regal Cinemas, which has been trying to stay out of bankruptcy court, has closed its unprofitable FunScape unit, a 3-year-old venture involving game arcades and concession areas tied to seven theater locations.

An unspecified number of layoffs accompanied the Nov. 26 move.

“The FunScape concept was not a major factor in our long-term business model,” said Dick Westerling, senior vice president of marketing and advertising for Regal. “It had its moments, but overall the FunScape operation was not profitable for us. It was a small niche of our overall business.”

Regal’s 4,361 screens in 396 theaters in 32 states make it the biggest U.S. exhibitor. But so far bigger hasn’t been better when it comes to fiscal health.

Taken private by two firms –Kohlberg Kravis Roberts and Hicks, Muse, Tate and Furst — in a $1 billion buyout back in 1998, Regal recently acknowledged that it could be forced into Chapter 11 bankruptcy reorganization like rival circuits such as United Artists Theatres and Carmike Cinemas. Exhibitors have been wracked by debt woes and competitive pressures after an industrywide multiplex building binge, and some have chosen bankruptcy court as a venue for breaking leases on money-losing older properties.

Avoiding bankruptcy

But Westerling said Knoxville, Tenn.-based Regal is committed to trying to avoid that route for the present.

“We’re continuing to work through our issues without the use of judicial process,” he said.

Theaters attached to the closed FunScape sites continue to operate. Sites include those in Knoxville; Nashville; Wilmington, Del.; Chesapeake, Va.; Rochester and Syracuse, N.Y.; and Fort Lauderdale, Fla.