By Movie attendance post the Covid-19 pandemic has been a challenge and Ster-Kenikor has experienced a turnout lower than 50%. The company has since announced that it will be shutting down nine cinemas in three provinces.
The move will result in shedding a quarter of its 728 staff members in KwaZulu Natal, Gauteng and the Western Cape provinces. Many factors were pointed out by the cinema giant who dominated the industry in South Africa for eons, boasting 60% of the share market. But due to the volatile economic conditions, the company has to downsize and restructure to stay afloat.
Ster-Kenikor said challenges like load-shedding, streaming, financial constraints and the strikes in Hollywood which resulted in movie releases being pushed back to 2025 have made a significant impact on the company.
In November 2022, Ster-Kinekor announced that its Business Rescue Practitioner Stefan Smyth, managed to successfully concluded and secure the business rescue process. The company said the transaction, which returns the company to solvency, involved the capital raising of R250 million from the UK based asset manager, Blantyre Capital and from the South African asset manager Greenpoint Capital, and forms the basis of the Business Rescue Plan.
Despite that, Ster-Kenikor continued to face challenges, having to compete with online platforms, cost of living, and franchise fatigue. In 2023, Mark Sardi, the CEO of Ster-Kenikor said there was a marked decline in people getting excited and rushing to the movies to watch franchises; he said it was a global problem.
Sardi said people are tired of watching franchises that were about to be released at that time like: Fast and the Furious 10, John Wick 4, Mission Impossible 7 and Indiana Jones 5.
Ster-Kenikor has taken a knock in revenue due to low attendance of movies.
“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,” said Ster-Kenikor.
The eyed cinemas to be shut down include:
- Bayside (WC)
- Boardwalk (KZN)
- Mimosa (KZN)
- Shelly Beach (KZN)
- Cedar Square (GP)
- Maponya (GP)
- Matlosana (GP)
- Southgate (GP)
- Sterland (GP
The company announced a review of eight more cinemas theatres in addition to the nine for potential closure which will result in 69 additional job losses, they include:
Secunda,
Wonderpark,
Bedfordview,
Cradlestone,
Mooi River,
N1 City,
Rosebank Nouveau,
and Rustenburg.
“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,” said the company.
