Dallas-based Studio Movie Grill Holdings, the theater chain where film-goers can order Sriracha chicken sliders and a Cruzan mango mojito right in the middle of the latest blockbuster, filed for bankruptcy Friday after the COVID-19 pandemic kept audiences away.
The dine-in theater chain plans to continue operating while it restructures under the supervision of U.S. Bankruptcy Court in Dallas.
Chairman Brian Schultz said in a letter on the company’s website that it reached an agreement with its secured lenders prior to its Chapter 11 filing that will “provide a sustainable path forward.”
“We plan to use this filing to strengthen our business by reducing liabilities and reposition SMG to emerge a stronger organization built for the future as we recover from the unparalleled impact of COVID-19,” Schultz said in the letter.
It’s another sign that the movie industry is caught in a downward spiral, with people staying home to avoid catching the disease, and studios holding back new films that might attract them. The biggest chain, AMC Entertainment Holdings Inc., has said it may run out of cash by the end of this year or early in 2021.
The outbreak forced SMG to temporarily close all its locations earlier this year. About a third of the company’s 33 theaters are still closed, according to its website.
Studio Movie Grill’s roots date back to 1993, when its original incarnation opened at the Granada Theater on Greenville Avenue in Dallas. Over the years, it expanded to 10 states. SMG was on a roll only a year ago, securing a $100 million investment in April 2019 to further fuel a national expansion.
As recently as August, it opened a sprawling state-of-the-art complex at The Shops at Chisholm Trail Ranch, 13 miles southwest of downtown Fort Worth along the Chisholm Trail Parkway. Schultz said at the time that SMG went five-and-a-half months with virtually no revenue when the pandemic closed theaters and restaurants and the company’s payroll shrunk from 7,200 employees to 34.
Through Friday, the U.S. theater industry has seen yearly box office sales plummet to $1.9 billion, compared with $11.3 billion for the same period last year, according to IMDb’s Box Office Mojo. It’s the lowest total since the 1981 recession.
Earlier this week, the nation’s largest theater chain, AMC Entertainment, warned that it could be forced to file for bankruptcy if it can’t raise additional cash. The company said its $418 million in cash on hand would be depleted by the end of this year or early 2021.
SMG’s bankruptcy petition listed assets between $50 million and $100 million and liabilities between $100 million and $500 million.
It joins more than a half dozen other Dallas-Fort Worth companies in seeking bankruptcy protection since March, including J.C. Penney, Neiman Marcus, Pier 1 and Chuck E. Cheese parent CEC Entertainment.
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