CINEWORLD LOSES $3 BILLION, GOES DEEPER INTO DEBT. The world’s second-largest chain of movie theaters lost $3 billion in 2020, compared to earning $212 million in profit in 2019.
Revenues for the year were down 80 percent to $852 million, Cineworld reported.
Box-office receipts likely will not return to 2019 levels until 2024, CEO Mooky Greidinger told the Financial Times.
The company’s future depends on the number of new studio releases, the lifting of restrictions on the number of patrons allowed into theaters, and the public’s willingness to come back, Cineworld said in a statement.
To help it survive, the company is asking its investors permission to issue another $213 million in convertible bonds that would mature in 2025. The bond issue would follow a November arrangement giving the chain an emergency loan from various lenders.
The global shutdown forced most of Cineworld’s 767 theaters to remain closed for months.
“Unless cinemas reopen successfully in May, further rent reductions are negotiated, and a tax refund is received in April, Cineworld will almost certainly have to rely on additional liquidity” – in other words, borrow more money – Citi analyst Natasha Brilliant said to the FT.
OFFICE DEPOT SHUTS THREE OF SEVEN STORES IN FRESNO AREA. The big-box office supplies retailer has begun going-out-of-business sales at the three stores, which are slated to close on 15 May, the company said.
The stores are closing as part of Office Depot’s plan to “optimize its retail footprint,” likely meaning that the company opened too many stores in one area and is now correcting that mistake in a shrunken, post-pandemic retail landscape.
Last May, Office Depot revealed a plan to fire 13,100 workers and close an unspecified number of its 1,100 stores by the end of 2022, including 90 stores by the end of this year.
Sales at the company’s brick-and-mortar stores may account for no more than 20 percent of the chain’s sales by mid-2022, CFO Joe Lower told an investors conference in June 2019.
In place of those sales, Office Depot is strengthening its reportedly profitable business-to-business services, which includes direct mail, graphic design, packing and shipping, and tech support.
Office Depot’s 2020 sales registered 8.9 percent below 2019’s, the company has reported.
The ODP Corporation, which owns Office Depot, also owns the Office Max office supply chain.