• Ster-Kinekor has survived a plan to cull nine of its cinemas and cut two-thirds of its staff.
• The company has only closed two cinemas and cut less than 60 employees.
• CEO Mark Sardi is hopeful for the future and is looking at alternative ways to leverage screens and sound systems, like gaming and music concert showings.

Mere months after declaring that it would close up to nine cinemas across South Africa and fire almost a third of its staff, or over 230 people, the company said on Wednesday that these plans would not be going forward.

According to eNCA, Ster-Kinekor will not be closing down the nine cinemas, and will only be letting go of less than 60 employees. On top of this, it only closed two of its cinemas, thanks to a restructuring process that even has the ailing entertainment company planning to broaden its product offerings for a more hopeful future.

A local company, Ster-Kinekor is the largest cinema exhibitor in South Africa representing over 60 percent of the market, which is completed by rival Nu Metro.

Both cinema firms suffered enormous financial pressure during the harsh lockdowns of the COVID-19 pandemic, and following years when multiple factors like the rise of streaming platforms and a decline in major motion picture production affected movie houses the world over.

Ster-Kinekor was looking at bankruptcy in 2021 and entered business rescue citing low country-wide sales. The company said that the softer-than-expected blow to its cinemas and employees could be attributed to successful talks with landlords and distributors about restructuring operations.

In 2022 it received a cash infusion of R250 million from UK-based Blantyre Capital and Greenpoint Capital, a South African firm. This allowed Ster-Kinekor to emerge from business rescue successfully.

Following this, the company also engaged in successful cost-cutting measures which has allowed it to save its cinemas. Previously, five cinemas in Gauteng, three in KwaZulu-Natal and one in the Western Cape were on the chopping block, including Ster-Kinekor Maponya Mall in Soweto.

Additionally, per BusinessTech, Ster-Kenikor was also considering the further closures of Rosebank Nouveau, as well as its cinemas in Secunda Mall, Cradlestone and Rustenburg.

What’s next for Ster-Kinekor?

Business Day reports that Ster-Kinekor is planning to explore other ways to use its screens in the next 12 months to drive profits, outside of traditional movie shows. This includes gaming, coding and others.

“An example, where kids can learn to code Monday through Thursday, they can play the Rolls-Royce version of PS5 [on the big screen] and watch other kids compete against one another in that environment,” CEO Mark Sardi said.

Additionally, Ster-Kinekor cinemas may start leveraging its screens and sound systems to show more music concerts as well, as Sardi says that its screenings of the Taylor Swift Eras Tour “was phenomenal for us.”

On streamers taking sales from cinema firms, Sardi believes that the two industries can exist symbiotically.

“There’s enough data that suggests that if something launches in our platform first, it will stick longer with the streamers,” he explained.

“So there is a symbiotic environment where both can exist next to each other, but I don’t think there is a way to replicate what we have in terms of experience.”

[Image – Photo by Felix Mooneeram on Unsplash]