OBSERVATIONS & CONVERSATIONS
Hello Fun Expo!
ESP bridges the future and networks the family entertainment operators, specialty retailers and leisure destinations with the developers and cities that are creating places for people to play, shop and dine. ESP wants to hear from you, so stop by our booth #1902 during the show. We want to know more about your company, and of course you can always call or E-mail (ann@specialtyretail.net). In upcoming issues, ESP will cover information on the family entertainment and the leisure industry's comings and goings... who's growing, where the locations are, what's working and what's not. ESP readers are thirsty for deals and new ideas, so make sure you tell us about your company's plans. This issue focuses on theaters and the picture isn't rosy and bright. Seems as though there's a storm brewing on the horizon, but entrepreneurs like those of you at Fun Expo will find a way to profit from the problems of the "big boys" that are closing outdated theaters or have surplus due to mergers. Let's face it, the real estate is usually good, so the question is how do you retrofit a two to ten-screen theater for another use without breaking the bank. For some locations, it's going to be impossible and the only answer is to raze the building or excavate to create a flat surface. The sites worth saving will be converted to art flicks, dinner theaters, laser tag, game rooms and God knows what else.
Another suggestion that I haven't heard is to run them as theaters, but to bring in other revenue streams. Genius I'm not, but why don't theater operators sell sound tracks on-site like the kiosks seen in the airports, why don't they merchandise movie memorabilia with redemption games in the lobby, why don't they have wall huggers selling T-shirts and hats with movie logos and tag lines, why don't they have party rooms, why don't they become merchants of more than a movie ticket and popcorn? The answer is easy, they don't know how? The solution is simple, license the areas to entrepreneurs like you. Not only would this bring additional revenue streams, but most especially it would make the movie going experience a real experience and give people a reason to stay longer which means they will eat and drink more at the concessions. I checked out a few theater leases, and I couldn't find any clauses that would deny a theater operator the right to license space to vendors. This issue provides leads on dozens of theater operators with thousands of locations, so pick up the phone or drop a note, explaining how you can make a difference on their bottom line. Also, theater operators can call me for names and phone numbers of operators that can bring merchandising to your theaters, that's what ESP is about - bringing together specialty retailers with leisure and entertainment destinations.
A theater operator asked me for ideas on how to theme their facilities. Ted Kraus, my partner who's spent half his life in the amusement business and the other developing shopping centers, went with me to visit this operator's newest 24-screen theater. We concurred merchandising is a key factor that would juice up the feel of the operation. Themes aren't always the answer to one upping the competition, yes it's important to give a pleasant feel but after a few years themes often become cheesy and require refreshing which equates to more expense, something theater operators just can't afford to do when you figure in land costs of eight acres, $1 million per screen to build, a tight labor market, and high rents. I'm certain that creative ideas, beyond our wildest imagination, will step up to the plate and cure the "ills" of progress.
A true success story featured in this month's ESP is United Skates of America. I was introduced to Norm Traeger, the founder, almost twenty years ago and was impressed, then recently I spent a day with his vice president, David Feitel and again was impressed with the company's management team. That's the single most important factor to any entity selling fun - a good management team from the very top to the employees on the floor. Many ESP readers are responsible for bringing business to their local towns, with titles ranging from Mayor to Economic Director. You all really need to read the article on USA to see how they have enhanced communities through public/private partnerships. The article spells out in real dollars how much they generated for the municipal coffers and the contribution in "quality of life" they brought to the neighborhood.
A large segment of ESP's readers are mall, specialty center and downtown developers and most of the smart ones realize that re-merchandising and repositioning is the name of the game today. In last month's issue I mentioned The Peak Experience, see page 29 to get the full scoop on what they are doing. It's an interesting concept of bringing together sports and recreation uses under one roof. I can picture this as an alternative to some of the failing malls and vacant department stores. Take a 100,000 to 750,000 sq.ft. vacant store or troubled mall and fill it with a sports medical center ran by the local hospital (they usually have good credit), team it with the likes of a Crunch or Life Time Fitness (see the past few issues for details), a wellness center (Ted manages a center anchored by a wellness center and it's definitely a traffic generator), dining places and entertainment venues... in some cases this would definitely make more sense than leasing to a call center. I visited a mall recently that filled a vacant department store with a call center, yes it created 350 jobs, but it also killed the rest of the mall. Not an ideal solution by any means.
ESP is committed to bringing you the tenants, the locations and the ideas, so keep on reading and call us at 1-800-732-5856 to subscribe. Also, check out our web site at www.specialtyretail.net Until next month.
Ann O’Neal, publisher
P.S. See Us at Fun Expo #1902-->
