With a glut of movie theaters across the country, Hamid Hashemi has no qualms about building more - and making them bigger and flashier than the competition.
While major theater chains have filed for bankruptcy protection and closed scores of cinemas, Hashemi, chief executive officer of Davie, Fla.-based Muvico Theaters, is opening five theaters this year and plans three more in 2001. The newest, Muvico Egyptian 24 Theater, will open Dec. 8 at Arundel Mills mall in Hanover.
Housed in a 130,000- square-foot complex attached to the mall, the 5,400-seat, 24-screen theater greets moviegoers with a 12-foot statue of Anubis, the Egyptian deity of the underworld, huge columns covered with hieroglyphics, sand-colored Sphinx reproductions and a glass-tile Nile running through the lobby.
The movie theater industry is overbuilt, partly because a wave of megaplexes, huge cinemas with stadium-style seating, has swept the country over the past five years, analysts say.
Hashemi - whose chain specializes in highly themed megaplexes of at least 14 screens - has another view.
"The country is under-closed - not enough of the old theaters have closed," he said yesterday, leading a tour through the Arundel Mills theater. Some of Muvico's competitors - General Cinema, United Artists Theater Co., Edwards Theater Circuit Inc, Silver Cinemas Inc. and Carmike Cinemas Inc. - have filed for bankruptcy protection, typically a way to get out of leases at under-performing theaters.
But Muvico is somewhat shielded by problems besetting the industry, said Hashemi, an Iranian immigrant who bought his first movie theater in 1984. It's privately financed and does not have a lot of debt.
Because of a decision five years ago to sell off theaters with fewer than 14 screens, the company has relieved itself of burdensome rents on older, money-losing cinemas. In 1995, Muvico decided to focus exclusively on what Hashemi saw as the future of the theater industry. Since then, the company has built nine megaplexes in Florida and now one in Anne Arundel County, all with themes meant to transport the moviegoer to a Pharaoh's palace, the ornate Opera in Paris or a Spanish village.
It will open another Florida theater next month, and three more - in Memphis, Tenn., and Atlanta - next year.
Besides over-the-top-design with Las Vegas flash, the theaters feature auditoriums seating 130 to 500 in rocking chairs arranged stadium style and perks such as valet parking, a child-care center staffed by teachers, and expanded offerings in the concession stand. At some of its theaters, Muvico is testing reserved seating.
The Arundel Mills theater pays tribute to the glamour of the movie palaces of the '20s and '30s, Hashemi said. Statues of Egyptian kings sit on thrones above the concession stand, and murals depicting Egyptian life cover auditorium walls.
"You walk in here, you know you're going to be entertained. We are the Disney of movie theaters," said Hashemi, the chief executive.
The theaters of the future will likely mimic Muvico's prototype, if not in specific theme then in seating, cutting-edge sound technology and size, analysts say.
Chains are building bigger theaters to capture bigger audiences with multiple showings of films, said Jeffrey Logsdon, a senior vice president with Gerard Klauer Mattison, a Los Angeles investment firm. But the pace of growth will likely slow drastically, he said. New theaters can cost as much as $1 million per screen, and willing lenders are hard to come by, experts say.
"Builders are very cautious right now," Logsdon said. "Most theater chains don't have the capital and, until they resolved their bankruptcy situations, it is less likely that people will step up."
In the past six months, about 2,100 theaters have closed, most as a result of chains' filing for bankruptcy protection.
"A lot of theater chains are strapped with older theaters that are less advantageous economically, especially when competition comes to town," Logsdon said.
"It has become fashionable to use the bankruptcy courts to extricate oneself from ... leases."
The rash of bankruptcies and below-investment-grade ratings of theater operators prompted the Rouse Co. to delay plans for a 14-screen movie theater at The Mall at Columbia. The theater was planned for a mall expansion in the spring including at least two restaurants and a Starbucks and an L. L. Bean store.
"A prudent real estate developer would sit on the sidelines now and wait for this consolidation to play itself out," said Christopher B. Carlaw, development director for the Columbia mall, who says a theater is not out of the question eventually.
"We think it's going to take a year to a year and a half for the survivors in that industry to emerge."
When the dust settles, Hashemi expects his company to be standing. He believes that his theaters offer a more unique, entertaining experience.
"Multiplexes are obsolete. People like stadium seating," he said. "You're going to go to a place where you get the most bang for your buck."
