South African cinema giant Ster-Kinekor has recently announced a restructuring plan that will lead to the layoff of 236 employees due to declining attendance numbers. This comes just two years after the company exited business rescue.
Ster-Kinekor cited various factors, such as the challenging economic environment, load-shedding, and the impact of Hollywood strikes on lower cinema attendance. The Hollywood strikes also rescheduled titles that were supposed to be released in 2023 and 2024 to 2025. As a result, Ster-Kinekor Theatres had to review its cost structure to ensure its business’s continued survival and sustainability. The company served staff with a section 189(3) notice on 13 February 2024, beginning the reduction of 236 of Ster-Kinekor’s 728 employees.
The affected positions include those in the CEO’s office, marketing, sales, human capital, business operations, content, finance, head office, regional operations, and information technology. Ster-Kinekor, which holds the majority of South Africa’s cinema market share, also revealed plans to shut down up to nine cinemas in South Africa’s most populous provinces. Mainly, Ster-Kinekor’s cheaper theatres, where tickets are between US$3.42 and US$3.95, are affected by this decision.
Ster-Kinekor is also reviewing plans to close eight more cinemas, including Secunda, Wonderpark, Bedfordview, Cradlestone, Mooi River, N1 City, Rosebank Nouveau, and Rustenburg. Closing cinemas, limiting seating capacities, and implementing curfews resulted in substantial financial losses for the company.
The Covid-19 pandemic and associated lockdowns also saw the rescheduling of film releases, which exacerbated the company’s struggles.
The board of directors initiated business rescue to address these issues and take advantage of legal protections. It successfully exited business rescue in November 2022.
Barbie and Oppenheimer were both released in July 2023. In September 2023, Ster-Kinekor chief marketing officer Lynne Wiley told MyBroadband that Barbie was the top title of the year so far. Oppenheimer ranked eighth in attendance for the Ster-Kinekor Circuit Three calendar year. It was also the top IMAX release with the highest attendance of the calendar year.
