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Nearly 100 years after Fred Wehrenberg opened the first theater in St. Louis designed specifically for motion pictures, his company - said to be the oldest and largest family-owned theater chain in America - is shopping for a potential buyer.
Executives of Des Peres-based Wehrenberg Theatres, which operates 10 theater complexes in the St. Louis area and five more throughout the Midwest, told more than 800 employees last month that it's exploring a possible sale of its theater operations.
"The industry is consolidating, and the investment required to remain a leader keeps getting larger," spokeswoman Kelly Hoskins said Monday, reading from a prepared statement. "Remaining an effective competitor and continuing entertainment excellence requires a greater financial resource and economies of scale. We've concluded the best action for our company is to be proactive to determine our own future."
Hoskins said the company, which started in 1906 and opened the first motion picture theater in St. Louis in 1910, gets offers from interested buyers "a lot" and finally decided to examine those possibilities. Until a final decision is made, however, the company is "continuing business as normal."
Movie theaters across the nation are battling for business, said Wendy Walker, a securities analyst who covers two publicly traded cinema companies at New York-based Argus Research Co..
Larger chains, operated by companies such as AMC Entertainment Inc. and Regal Entertainment Group, dominate the cinema landscape. Theaters of all sizes compete against the sophisticated home theater and video gaming systems that have been capturing market share, she said.
Plus, movie studios are increasingly delivering movies via digital technology, instead of movie reels, Walker said. That technology costs theaters "hundreds of thousands of dollars" to implement.
Piracy via DVDs and the Internet also poses problems for movie theaters, said local cinema veteran Harman Moseley, who operates the Galleria 6 Cinemas, Moolah Theatre and Lounge, and Chase Park Plaza Cinemas.
"Most recently, 'American Gangster' was available to everyone on a pirated DVD well before the movie opened," he said. "If people are going to be able to get movies off DVDs, why would they pay to see one?"
Wehrenberg Theatres shuttered its Kenrick 8 Cine in Shrewsbury almost a month ago, but Hoskins said that closing is unrelated to the possible sale.
And still, the company continues to expand. It plans to open a 14-screen cinema in Bloomington, Ill., in late January, Hoskins said.
Steve DeBellis said the company's executives "really know the business and they know how to work it." He is author of "100 Years of Reel Entertainment: How Wehrenberg Theatres Became the Longest-Running Picture Show in America," a book published in 2006 and paid for by Wehrenberg Theatres.
"They command the lion's share of the market in their hometown," said DeBellis, who is president of Lemp Brewing Co. in downtown St. Louis.
To facilitate the search for a buyer, Wehrenberg Theatres hired UBS Investment Bank.
Hoskins said Monday the company did not have a buyer yet, and she declined to give the company's annual revenue or its target sale price.
Moseley, who predicted the buyer would be a big-name cinema group, called Wehrenberg executives "really smart" to look into a potential sale.
"I don't think this is a duress sale," Moseley said, adding that he doesn't plan to sell his own theaters anytime soon. "I think they're selling because they're afraid of the future - the uncertainty of digital, the uncertainty of piracy."
Wehrenberg Theatres is shopping for a buyer
Copyright (c) 2007 St. Louis Post-Dispatch
Record Number: 1001150022
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