Ster-Kinekor has navigated through a challenging period marked by economic pressures, intensified load shedding, and the impact of the Hollywood strikes.

• The restructuring process at Ster-Kinekor’s head office resulted in a 20-25% reduction in headcount and costs.
• While Ster-Kinekor initially considered closing nine cinema sites, only two—Boardwalk in Richards Bay and Greenstone Mall—have been impacted.
• Ster-Kinekor is actively working on new concepts to enhance the value proposition for its customers.
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As the company completed its Section 189 and restructuring process at the end of May, it emerges with a leaner structure and renewed strategies to ensure sustainability and growth in the competitive cinema industry. Mark Sardi, CEO of Ster-Kinekor Theatres provided The Sandton Times with more insights into the businesses current operations.

Initially, 226 jobs were assessed for potential impact, but ultimately, only 52 employees were retrenched, mainly from the head office. This significant reduction was a measured response to the current economic environment and the necessity to align the organization’s size with market demands. The workflow has been redistributed among the remaining staff, ensuring operational efficiency and continuity.

The company is actively engaging with landlords and partners to explore innovative entertainment and education strategies within their remaining cinema spaces. In instances of site closures, Ster-Kinekor strives to redeploy affected staff to other locations, maintaining employment and expertise within the organization.

The challenges Ster-Kinekor faced were multifaceted. The intensified load shedding in South Africa significantly impacted operations from March to September last year. Additionally, the Hollywood writers’ and actors’ strikes caused a substantial delay in movie production, affecting the release schedule of titles originally slated for 2024. These events led to a necessary short-term restructuring to secure the business’s medium to long-term future.

In response, Ster-Kinekor launched ‘Throwback Cinema,’ a campaign designed to re-release classic films at R50 per ticket. This initiative aims to remind customers of the unique cinema experience that streaming services cannot replicate. The nostalgic appeal of classic movies has resonated well with audiences, ensuring steady foot traffic and engagement.

The magic of the cinema experience lies in its ability to create lasting memories. Whether it’s a first date, a family outing, or a child’s initial cinematic adventure, the big screen offers an unparalleled experience that streaming services cannot match. Ster-Kinekor recognizes the importance of coexisting with streaming platforms and believes in a symbiotic relationship where both can thrive. By launching titles in cinemas first, they enhance the movie’s longevity on streaming platforms, benefiting all parties involved.

The restructuring process underscored the goodwill and collaboration among Ster-Kinekor’s partners, landlords, distributors, and stakeholders. The theatrical window, typically 40-45 days, ensures that films have an exclusive run in cinemas before transitioning to other formats, reinforcing the importance of the big screen experience.

With plans to test these ideas at select sites, the company aims to manage the 12-18 month period of potentially thin content while maintaining pricing and value for customers. Insights from international investors and shareholders, with experience in the US and European markets, are being leveraged to bring best practices to the local market.

According to the company, Ster-Kinekor’s ‘Throwback Cinema’ promotion, which relaunched in May, has been a success, with tickets priced at just R50. This initiative continues through June and July, featuring eight more classic titles. Additionally, exciting new releases are scheduled, including “Furiosa: A Mad Max Saga,” “Bad Boys: Ride or Die,” “Inside Out 2,” “A Quiet Place: Day One,” “Twisters,” and “Deadpool & Wolverine,” among others.

Despite the challenges, Ster-Kinekor remains optimistic about the future. The restructuring process has led to innovative thinking and smarter operations, ensuring the company is well-positioned to navigate the evolving cinema landscape. The cinema industry, resilient as ever, continues to hold a special place in the hearts of moviegoers, and Ster-Kinekor is dedicated to keeping that magic alive.

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