By Lina Saigol
Shares in Cineworld plunged 57% on Monday, after the world’s second-largest movie chain confirmed it will temporarily close its cinemas in the U.K. and the U.S., putting 45,000 jobs at risk.
U.K. Prime Minister Boris Johnson acknowledged there would be “tough times ahead” in the jobs market following Cineworld’s announcement, but encouraged people to go to the movies.
Cineworld’s move comes after the release of the latest James Bond film, “No Time to Die” was delayed for the second time. The MGM film had been due to be released in April this year, but was then postponed until November because of the pandemic. It is now expected to be released on April 2, 2021.
“We did everything in our power to support safe and sustainable reopenings in all of our markets,” Greidinger said.
All operations will be suspended at 536 theaters in the U.S. and 127 Cineworld CNNWF and Picturehouse theaters in the U.K. from Oct. 8. The company didn’t give a date for reopening its cinemas.
Shares in Cineworld, which plunged 57% when the market opened, were trading 27.77% lower in early morning trading on Monday.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said the beleaguered entertainment industry has taken another huge blow with the confirmation that all of Cineworld’s venues will close their doors temporarily.
“Although the delay of the latest 007 blockbuster prompted the decision, Bond isn’t the villain in this piece. The spread of COVID-19 around the world has been a horror movie for the industry and the fresh wave of infections is the latest installment in what’s been a devastating story for cinema chains,” Streeter said.
Cineworld’s announcement follows a series of high-profile delays in recent weeks, including the Fast & Furious sequel, F9 , which has been delayed until the end of May 2021, analysts at Citigroup said.
“The only major release post the peak of COVID, the highly anticipated “Tenet,” has delivered a disappointing performance. It seems that there is a vicious circle — with concerns over audience levels, the studios are unwilling to release their strongest content. And without decent content, audience levels are unlikely to return any time soon,” the analysts added.
“Without these new releases, Cineworld cannot provide customers in both the U.S. and the U.K. — the company’s primary markets — with the breadth of strong commercial films necessary for them to consider coming back to theaters against the backdrop of COVID-19,” Cineworld said.
The entertainment industry has been among the hardest hit by social distancing and other restrictions, with the pandemic forcing U.S. and U.K. cinemas to close in mid-March.