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Marcus Theatres agrees to acquire Movies 10 at Southgate

Firm plans to remodel, convert to stadium seating, add four screens under deal scheduled to close Thursday

By Rick Romell
of the Journal Sentinel staff

December 9, 1998

Marcus Theatres said Tuesday it had struck a deal to acquire Movies 10 at Southgate Mall from Dallas-based Cinemark USA Inc.

The Marcus Corp. division plans to remodel the 10-screen theater at S. 27th St. and W. Morgan Ave., convert the auditoriums to stadium seating and add four screens, Marcus Theatres President Bruce J. Olson said.

The acquisition will give Marcus a good-sized property in an area undergoing revitalization.

JDN Realty Corp., an Atlanta firm that bought Southgate Mall in September, is negotiating with Wal-Mart to locate a store there. The largely vacant mall, which was one of the nation's first shopping centers, would be razed to make way for the Wal-Mart store.

Olson said Kohl's Corp. had renovated a nearby department store and that other merchants in the area were pledging reinvestment.

"South 27th Street is still a very, very vibrant shopping district and a real center for commerce on the near south side," Olson said.

Marcus' acquisition of the theater is scheduled to close on Thursday. Terms of the deal were not disclosed.

JDN owns the theater building and land, which Marcus is not buying. Marcus will acquire the business -- to be renamed Marcus Cinema at Southgate -- and Cinemark's interest in a long-term lease for the property. Marcus often owns the real estate in which its businesses operate.

The company plans to convert to stadium seating, which places seats on tiers rather than a sloped floor, over the next year. Such seating -- a trend in the movie exhibition industry -- has proved popular because it offers greater comfort and unobstructed views. Marcus is moving to retrofit most of its first-run theaters with stadium seating and is placing it in all of the theaters it builds.

Because stadium seating requires more space, the current 1,783-seat capacity of the Southgate complex will be reduced by 350 to 500 seats, Olson said. He said Marcus would recoup the lost capacity when it adds four screens, possibly late next year.

Increasing the number of screens per location, also an industry trend, offers operating efficiencies and hedges an operator's risk of being stuck with one or two poor-performing films. Marcus has moved aggressively toward larger complexes. In less than four years, the company's average number of screens per location has risen from 5.4 to nearly 9.4.

The acquisition from Cinemark will bring Marcus to 398 screens in four states and reinforce its position as the Milwaukee area's dominant theater operator.

Marcus will get some new competition next year, however, with General Cinema's opening of a 19-screen theater -- the largest complex in the area -- at Mayfair Mall in Wauwatosa.

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