Leawood-based AMC Plans To Reopen Theaters Soon As Its Losses So Far This Year Top $2 Billion
Shares of the world's biggest theater chain soared 14% on the news that the company would reopen almost all of its theaters in the United States and Great Britain.
Leawood-based AMC Entertainment said it expects to reopen its theaters at limited capacity after shutting them down in mid-March because of the COVID-19 pandemic.
The statement by the world’s largest movie theater chain came after it said last week that there were “substantial doubts” about its ability to continue as a going concern.
The company on Tuesday reported a huge $2.2 billion loss in the first quarter that ended March 31 after posting almost no revenue in the last two weeks of the quarter.
“These are truly unprecedented times,” AMC President and CEO Adam Aron said in a statement. “I join with all our employees around the world to offer our sympathies to those affected by the coronavirus, as well as our sincerest gratitude to those on the front lines. After starting the year with two solid months of revenue growth compared to last year, in mid-March we were forced to pivot the entire company to respond to the effects of the pandemic.”
Shares of AMC stock were up more than 10% in mid-morning trading Wednesday following AMC’s announcement that it would reopen almost all of its theaters in the United States and Great Britain.
AMC has already reopened theaters in Norway, Germany Spain and Portugal and said it expects to be “fully open globally in July” in time to show director Christopher Nolan’s “Tenet,” which is set for release on July 17, and Disney’s live-action remake of “Mulan,” which is set for release on July 24.
The company said it is consulting with the Harvard University School of Public Health on “how best to create a safe environment for our guests and associates.”
“Personal protection equipment, cleaning protocols, limited theatre capacity, blocked seating, and other strategies are all being planned,” it said. “We are especially looking at high tech solutions as well, to aid in our sanitization techniques including the use of electrostatic sprayers, [industrial strength] vacuums and wherever possible upgraded [sic] air ventilation filters.”
Last month, British tabloid The Daily Mail reported that AMC had been in buyout talks with Amazon. No mention was made of such talks in AMC’s earnings statement on Tuesday or in its quarterly regulatory filing with the Securities and Exchange Commission.
AMC’s $2.2 billion loss in the first quarter compared with a $130 million quarterly loss a year earlier.
The company had been struggling even before the pandemic as streaming services ate away at movie theater attendance and studio giants like Disney squeezed ticket revenue.
Founded in Kansas City a century ago by the Durwood brothers, AMC owns or operates 996 theaters with 10,973 screens in the U.S. and Europe.
Just under 50% of its stock is owned by Dalian Wanda Group Co. Ltd., a private conglomerate based in China. Wanda has the power to control AMC’s policies because it also owns just under 75% of the combined voting power of AMC’s stock.
Wanda originally acquired a 60% stake in AMC in 2012, when it paid $2.6 billion for what was then the largest overseas acquisition by a privately held Chinese company.