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In an effort to restructure its operations following a decline in attendance numbers, cinema giant Ster-Kinekor has announced plans to lay off 236 employees and close down some of its cinemas.

The movie house said factors like the challenging economic environment, load-shedding, and the impact of the Hollywood strikes had resulted in substantially lower cinema attendance. The rise of streaming services undoubtedly had a role to play as well. Thanks a lot, Netflix.

It served staff with a section 189(3) notice in February, beginning the retrenchment of 236 of Ster-Kinekor’s 728 employees.

“As these are forces largely out of the business’s control and the financial impact is likely to endure for some time, Ster-Kinekor Theatres has had to review its cost structure to ensure the continued survival and sustainability of its business,” the company said.

“Ster-Kinekor Theatres issued a notice to all staff informing them of the company’s intention to proceed with a restructure under Section 189 of the Labour Relations Act, and to begin the consultation process,” the company said.

Affected positions include those in the CEO’s office, marketing, sales, human capital, business operations, content, finance, head office, regional operations, and information technology. Pretty much everyone is affected it seems.

The company, which holds the majority of South Africa’s cinema market share, also revealed plans to shutter up to nine cinemas in South Africa’s most populous provinces. Mainly cheaper theatres, where tickets are between R65 and R75, are affected by this decision.

In the Western Cape, only Bayside is in the firing line. In KwaZulu-Natal, Ster-Kinekor aims to close its Boardwalk, Mimosa, and Shelly Beach cinemas.

In Gauteng, it will close Cedar Square, Maponya, Matlosana, Southgate, and the iconic Sterland.

These closures will happen gradually, over the next six months, the company said. Ster-Kinekor is also reviewing plans to close another eight cinemas, including Secunda, Wonderpark, Bedfordview, Cradlestone, Mooi River, N1 City, Rosebank Nouveau, and Rustenburg, according to MyBroadband.

The COVID-19 pandemic and associated lockdowns hit the theatres hard, and following this, Ster Kinekor was forced to enter business rescue in January 2021. Despite the rise of streaming services, the company was still turning a profit prior to the pandemic.

It successfully exited business rescue in November 2022, thanks to an acquisition that would see the company receive an R250 million cash injection from UK-based asset manager Blantyre Capital and South African asset manager Greenpoint Capital.

Despite the rescheduling of releases last year and in 2024, the release of Barbie and Oppenheimer provided a significant boost for Ster-Kinekor and the global cinema market as a whole.

“Both Barbie and Oppenheimer have performed extremely well on the Ster-Kinekor circuit,” Ster-Kinekor chief marketing officer Lynne Wiley said.

“Barbie‘s cinema attendance is number one for the 2023 calendar year to date and has ranked in position 20 in the Southern Africa All Time Top 100 list for Box Office as of August 2023.”

Unfortunately, Barbie-mania is over, and Oppenheimer is unlikely to get a sequel until after WW3, which means the classic cinema experience is likely headed the way of the dodo and DVDs.

[source:mybroadband]