Cineworld: Video explains reports cinema operator is to close 25% of its UK sites

• Cineworld plans to close around a quarter of its UK cinemas, according to reports
• The cinema chain aims to reduce costs amid financial challenges
• It also seeks to renegotiate rents for approximately 50 cinema locations
• Cineworld, including its Picturehouse chain, faces pressures from streaming services and increased operational costs
• Cineworld is the world's second-largest cinema chain, but debt and market changes pose challenges

Cineworld plans to close approximately a quarter of its cinemas in the UK as part of a new restructuring effort, according to reports.

The cinema chain currently operates about 100 locations nationwide and is expected to begin closures as part of a formal restructuring plan.

According to Sky News, the group, which went private last year, will also aim to renegotiate rents for approximately 50 other cinemas, while about 25 sites will remain unaffected by these changes.

Cineworld, which also owns the Picturehouse chain, is among several cinema companies impacted by the rise of streaming services, delays in film releases due to strikes among actors and writers, and increased living costs for consumers.

Sky reported that the restructuring proposals were expected to be formally outlined to creditors including landlords in the coming weeks. It is understood that financial services firm AlixPartners is acting as an adviser during the process.

Cineworld was founded in 1995 in Stevenage. It began with the opening of its first cinema in that location and has since grown to become the world's second-largest cinema chain (after AMC Theatres), with 9,139 screens across 747 sites in 10 countries.

In 2012, it acquired the Picturehouse chain, which allowed it to diversify its offerings and appeal to a broader demographic.

Then in 2018, the company acquired Regal Entertainment Group in 2018, which expanded its footprint in the United States, but significantly increased its debt burden.

This large debt load has placed financial strain on the company, particularly during periods of reduced revenue and cash flow.

The group was listed on the London Stock Exchange until last year, when it was taken over by investors and hedge funds after it had been hamstrung by its multibillion-pound debt pile.

The investors exchanged billions of pounds worth of debt for equity in the business, after the group also filed for bankruptcy protection in the US.

Even before the Covid-19 pandemic, Cineworld and other chains were facing challenges from the growth of streaming services., with the availability of high-quality content on streaming platforms reducing the demand for traditional cinema attendance, especially for less blockbuster-oriented films.

And in light of recent volatile rates of inflation and interest, operating costs such as rent for cinema locations, maintenance and staffing continue to be significant expenses for Cineworld.

Which Cineworld cinemas are closing?

At the time of writing, Cineworld has not publicly commented on reports of its plans to close 25% of its UK cinemas. National World has reached out to Cineworld for comment and will update this article with any additional information as it becomes available.

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