Cineworld Group’s Regal Entertainment Holdings said it will temporarily suspend operations at all its American and British movie theaters as crucial sales from expected fall and winter blockbuster movie releases like the next James Bond epic have been scuttled by the coronavirus pandemic.
The world’s second-biggest cinema chain said in a statement it will shutter 536 Regal theaters in the U.S. as well as 127 of its U.K. locations this Thursday. The closure affects roughly 45,000 employees.
Regal’s decision to suspend operations follows a cascade of postponements for big-budget Hollywood films, most recently the James Bond title “No Time to Die.” MGM Holdings said Friday that it was delaying the film for the second time to next April. It had initially planned to release the film last April, but postponed to November.
It also comes as movie theaters continue to grapple with lack of attendance, despite best efforts to entice big-screen aficionados back into seats. Box-office sales for recent new releases including “Unhinged” and “Tenet” have barely made a dent financially, while competition from direct-to-home streaming from the likes of Disney (DIS) - Get Walt Disney Company Report has also hit hard.
Cineworld “cannot underscore enough how difficult this decision was,” CEO Mooky Greidinger said in the statement. Cineworld will aim to reopen “when key markets have more concrete guidance on their reopening status and, in turn, studios are able to bring their pipeline of major releases back to the big screen.”
The grim reality for theaters prompted S&P Global Ratings to cut its rating for AMC Entertainment Holdings (AMC) - Get AMC Entertainment Holdings, Inc. Class A Report last week, saying that a default may be looming. Cineworld is also expected to revisit borrowing additional capital.
After dropping as much as 60%, shares of Cineworld were down 36% in London. The stock has declined roughly 88% so far this year.