Cineworld ends sales process for UK and US businesses as it enters into restructuring agreement: Cineworld has ended the sales process for its UK and Ireland and US divisions as it announced it has entered into a restructuring support agreement to emerge from its Chapter 11 proceedings. The agreement will see bank lenders holding and controlling about 83% of Cineworld’s term loans due 2025 and 2026 and revolving credit facility due 2023. Cineworld stated: “The (restructuring includes a commitment to: provide a first lien exit financing facility; and backstop an equity rights offering in connection with the proposed restructuring. Consistent with the company’s announcement on 24 February 2023, in light of the level of existing debt that is expected to be released under the plan, the proposed restructuring does not provide for any recovery for holders of Cineworld’s existing equity interests. The proposed restructuring is expected to reduce the group Chapter 11 companies’ funded indebtedness by approximately $4.53bn, principally through lenders under the legacy facilities receiving equity in the reorganised group in exchange for the release of their claims under the legacy facilities. It is also expected to raise $800m in aggregate gross proceeds, through a fully backstopped equity offering to the legacy lenders and a direct equity offering to certain legacy lenders and, together with the backstopped rights offering, and provide $1.46bn (net of original issue discount) in new debt financing to the group Chapter 11 companies upon their emergence from the Chapter 11 cases. The proceeds of the rights offering and the exit facility will be used to, among other things: repay in full the approximately $1.94bn debtor-in-possession financing facility entered into by the group Chapter 11 companies when they commenced their Chapter 11 cases; (ii) fund the costs associated with the group Chapter 11 companies’ emergence from the Chapter 11 cases; and (iii) fund their go-forward business operations. As announced on 3 January 2023, in parallel with developing a plan, Cineworld has also been running a marketing process in pursuit of a value-maximising transaction for the group’s assets. As announced on 24 February 2023, Cineworld received non-binding proposals for some or all of the group’s assets from a number of potential transaction counterparties. Having discussed with its key stakeholders, Cineworld has determined that, absent an all-cash bid significantly in excess of the value established under the proposed restructuring, the marketing process as it relates to the group’s business in the US, the UK and Ireland will be terminated. Cineworld and its key stakeholders continue to consider the proposals that were received in respect of its ‘rest of the world’ business (outside of the US, the UK and Ireland) and a process is underway with the bidders for the rest of the world business to assess whether an acceptable sale transaction can be completed. It is expected that the plan will provide sufficient flexibility to accommodate a sale of the rest of the world business, assuming the marketing process leads to a sale transaction supported by the group Chapter 11 companies and their stakeholders. As previously announced, it is not expected that any sale transaction would provide any recovery for holders of the company’s equity interests. As announced on 24 February 2023, Cineworld expects to emerge from the Chapter 11 cases during the first half of 2023. During the restructuring process, Cineworld continues to operate its global business and cinemas as usual without interruption. Cineworld and its brands around the world – including Regal, Cinema City, Picturehouse and Planet – are continuing to welcome customers to cinemas as usual. The group continues to honour the terms of all existing customer membership programmes, including Regal Unlimited and Regal Crown Club in the United States and Cineworld Unlimited in the UK.” Chief executive Mooky Greidinger said: “This agreement with our lenders represents a ‘vote-of-confidence’ in our business and significantly advances Cineworld towards achieving its long-term strategy in a changing entertainment environment. With a growing slate of blockbusters and audiences returning to cinemas in increasing numbers, Cineworld is poised to continue offering moviegoers the most immersive cinema experiences and maintain its position as the ‘Best Place to Watch a Movie’.”
Number of experiential concepts to feature in the next edition of The New Openings Database, 5,000-word report included: A number of experiential concepts will feature in the next edition of The New Openings Database. The database will show the details of 110 newly announced site openings and upcoming launches for Premium subscribers when it is published on Thursday, 6 April, at midday, including which company has opened a site or its plans to open one in the future. It will have details on what type of site it is and its location, and there will also be a website link to the businesses. The database is published on a monthly basis, and the next edition features
Lucky Voice, the social entertainment brand, which has opened a new £1.2m site in London’s Liverpool Street. Also added this month is
Sixes, the cricket-based competitive socialising concept from the founders of Mac & Wild, which opened its seventh site, in Leicester’s Halford Street. Meanwhile,
Topgolf, the golf entertainment brand, which opened the doors to its flagship venue in Glasgow’s Duchess Place, will be featured. In addition, crazy golf brand
Junkyard Golf Club, which will open its second site in London, and its biggest venue yet, in Camden Market, is included. Premium subscribers will also receive a 5,000-word report on the new additions to the database. Premium subscribers also receive access to four other databases: the
Propel Multi-Site Database, produced in association with Virgate; the
Propel Turnover & Profits Blue Book; the
UK Food and Beverage Franchisor Database; and the
Who’s Who of UK Food and Beverage. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers.
Email jo.charity@propelinfo.com to upgrade your subscription. Premium subscribers are also to be given exclusive access to the recording and slides to Propel Multi-Club Conferences. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Propel group editor Mark Wingett.
McDonald’s closes all US offices and cancels in-person meetings as it begins layoffs: McDonald’s has temporarily shut down all of its US offices as it prepares to deliver layoff messages online to a number of its employees across the country. According to The Wall Street Journal, the layoffs – part of a company restructuring – will begin today (Monday, 3 April) after it told employees to work from home so it can dismiss staff virtually. “During the week of 3 April, we will communicate key decisions related to roles and staffing levels across the organisation,” McDonald’s officials said in a memo. The company said it made the decision to announce cuts virtually due to an anticipated busy travel week. It’s unclear at this time how many employees are set to be laid off, however, chief executive Chris Kempczinski said in a January email there would be “difficult discussions and decisions ahead”. The report from the Wall Street Journal said the Chicago-based chain told employees last week in an internal email. While the message was mostly to US employees, some international corporate workers were also included. In the memo, company executives also advised that upcoming in-person meetings with vendors and other outside parties at headquarters be cancelled. The decision to have employees work remotely for part of the week is due to an anticipated busy travel week ahead, potentially connected to the Easter holiday. Workers who don’t have access to a computer were told to give their personal contact information to their manager. “We want to ensure the comfort and confidentiality of our people during the notification period,” the company said. McDonald’s employs roughly 200,000 people around the world in corporate roles and company-owned restaurants. About 75% of the employees are located outside of the US. The company operates 40,000 restaurants in more than 160 countries with a total of two million staff in its franchised outlets. Around 13,000 of those locations are in the US. In his January email, Kempczinski said the corporate job cuts that would begin in April would be made help the business grow. In a letter to staff, he warned the company had become unfocused. “We had across the globe 70 different, distinct versions of what a crispy chicken sandwich would look like,” he wrote. “I don’t need 70 different permutations of a chicken sandwich.” The memo sent in January was titled “Accelerating the Arches 2.0”. In an interview, he said that he didn’t have a set amount he was hoping the job cuts would save but that he was focused on advancing the business. This isn’t the first time the company has conducted layoffs among corporate workers. In 2018, McDonald’s cut management-level workers to be “more dynamic, nimble and competitive”. ‘ Kempczinski said in January: “Some jobs that are existing today are either going to get moved or those jobs may go away.”
Fewer people eating out as they cut back on unnecessary spending: Increasing numbers of people are avoiding eating out and more than half have cut back on non-essential spending this year as the cost-of-living takes its toll, according to new research. A total of 55% of consumers have cut down on goods and services that they can live without and 63% of those said they were doing this mainly by making fewer trips to restaurants, the findings by KPMG revealed. Half of the 3,000 consumers it surveyed between 6 March and 10 March said they would reduce discretionary spending if their energy bills rose after government cost-of-living payments were scaled back from April. Millions will be paying £67 more a month for energy after the government paid the last of six instalments of £400 to help with fuel bills. Only households that meet means-testing requirements will continue to receive support. The energy price guarantee, which subsidises household fuel bills to cap the average yearly spend at £2,500, was expected to wind down from April, with bills set to rise by £500. However, the chancellor extended the guarantee at its present level for another three months in his Budget last month. Bills are expected to fall below the level of the guarantee from this summer as the sharp drop in wholesale gas prices over the winter is passed on to households. Some forecasters have said average energy bills could fall below £2,000 by the end of the year. Inflation was close to a 40-year high at 10.4% in February, owing to the high prices of energy and food, but it is expected to fall quickly this year. Linda Ellett, of KPMG, told The Times: “With energy, mobile and broadband costs set to rise for many households from April, a number of consumers will likely have to further cut back their discretionary spending.”
European branded coffee shop market grows 3.3% despite headwinds, UK remains largest market: The UK remains the largest branded coffee shop market in Europe despite economic headwinds but sustained macroeconomic pressures are beginning to take their toll. The Project Café Europe 2023 report revealed the European branded coffee shop market grew 3.3% over the last 12 months to reach 42,804 outlets. A total of 31 out of the largest 40 European markets by outlets have expanded in size over the last 12 months. The UK still has the most branded outlets, growing 4.4% to reach 9,885 outlets, ahead of Germany, which experienced a 1.3% contraction to 6,798 stores, and Russia, which grew 2.2% to reach 4,479 outlets. Collectively, the UK, Germany and Russia contain 49% of all European branded coffee shop outlets. Major branded chains still dominate Europe, with the 20 largest operators holding a 48% share of the total market and 62% of outlets belonging to multi-national operators. UK-based Costa Coffee remains Europe’s largest coffee chain with 3,122 outlets across 18 markets, opening its first stores in Georgia and Austria in 2022 – but exiting Russia and Slovakia. Starbucks opened 89 net new outlets over the last 12 months to become the region’s second largest operator with 3,075 stores, overtaking US-based McCafé, which closed net 90 stores and now operates 2,923 outlets. Although 58% of industry leaders surveyed believe the current trading environment for coffee shops in their country is positive, sustained macro-economic pressures are beginning to take their toll. Less than half of industry leaders surveyed expect trading conditions to improve over the next year, 12% fewer than in 2022. A further 17% expect trading to deteriorate. World Coffee Portal forecasts the European branded coffee shop market will exceed 44,100 outlets by March 2024 and 49,600 outlets by March 2028, at a growth of 3.0% compound annual growth rate (CAGR). The coffee- focused segment is expected to lead this growth and exceed 29,900 outlets, at a growth of 3.5% CAGR.
