Majestic Cinemas, a movie theatre business operating screens across regional New South Wales and Queensland, has collapsed into voluntary administration after a punishing 18 months for independent cinema chains.
The business operates theatres in Nambour, Port Macquarie, Inverell, Nambucca, Wynnum, Kempsey, Singleton, Sawtell, and Nelson Bay, providing a movie-going experience in many regions without a big-name multiplex.
A new FAQ section on the Majestic Cinemas website states the business is seeking to restructure, and that “at this stage” all of its theatres remain open to customers.
Gift card holders, who would usually be considered unsecured creditors in an administration, can redeem their unused gift cards through matched cash spending.
“For example, if you make a purchase for $20 at the cinema, you can use your Gift Card for $10 and pay the other $10 by cash or card,” the website states.
Documents listed by the Australian Securities and Investments Commission show Majestic Cinemas Pty Limited has recruited Terry Grant van der Velde and Terrence John Rose of SV Partners as joint administrators.
The first meeting of creditors will take place on February 12.
SmartCompany has contacted the administrators for comment.
The administration arrives after what Majestic Cinemas founder and CEO Kieren Dell described as a “pretty dire” 2023 for cinemas across Australia.
Speaking to SmartCompany in July last year, when the ‘Barbenheimer’ phenomenon inspired an exceptional burst of ticket sales at cinemas nationwide, Dell said cinemas were hard-hit by broader economic constraints.
“Everyone thinks that COVID was a tough time, but in fact, the last financial year was probably one of the hardest for independent cinemas, because there was no government support, no landlord support, and no bank support,” he said.
Looking beyond the success of Barbie and Oppenheimer, Dell said box office revenues at independent cinemas outside of Sydney and Melbourne fell in 2023.
“It’s been pretty tough times,” he continued.
“We need two things: we need these big movies to release, which is exactly what’s happened, and we need a stream of movies from here onwards to encourage people to come back to the cinema.”
Dell flagged concerns over consumer discretionary spending but was optimistic the upcoming slate of movies, and the relatively affordable price of a movie ticket, would encourage future box office revenues leading into 2024.
“I’m confident cinemas will get through these recessionary times,” he said.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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