Dissecting dine-and-movie iPic theaters

   Jan. 1, 2018-iPic manages to squeeze sizeable revenue from sponsorships and asserts its dine-and-a-movie theaters are attractive tenant prospects to shopping centers, in a presentation to investors. iPic is preparing a mini-initial public offering (IPO) so its stock will become publicly-traded.
   The Boca Raton, FL-based exhibitor says that it generates 18% of revenue from promotional sponsorships and moviegoers membership fees, compared to under 5% as the norm for traditonal cinemas. Its
The Florida-based circuit occupies the high luxury end of the meal-and-movie spectrum

sponsorship partners include fashion brand Burberry, jeweler Cartier, Lexus cars, and streamer Netflix. I was surprised that iPic consumer membership program (or loyalty program) claims 1.8 million members—that’s a big number for a chain with just 16 locations in 10 states (and 121 total screens).
   iPic president and CEO Hamid Hashemi, who is a veteran theater operator, told the investors presentation that the average income of its moviegoers is $125,000, which makes iPic theaters desirable for shopping centers seeking affluent foot traffic, or “anchor tenants of choice.” (Shopping centers are looking to broaden their tenant base given traditional retail stores are in decline from online/Amazon competition).
   iPic is unique because of emphasis on gourmet food by pairing its own high-end, free-standing restaurants adjacent to theaters. Other meal-and-a-movie theaters tend to offer lower-cost food like pizza and hamburgers, which I think of as “tavern fare.’
   The big insight that I gathered from the investor presentation is iPic views itself as a four-hour experience—with a full meal and waiter-served beverages available in the auditorium. Traditionally, movie patrons must travel to a restaurant before or after a movie, so iPic saves perhaps 40 minutes by eliminating a trip to a distant restaurant.
    It’s a luxury experience with movie $12-24 a ticket, which includes free popcorn and soft drinks. Seats are cushy, large recliners (I’ve personally experienced and can confirm). Also, movie theaters generally draw patrons located in within a three-to-five mile radius, while iPic asserts its theaters draw from a 25-mile radius.
   While operating 16 theaters in 10 states, circuit feels that it can grow to 200-225 locations.  The IPO will facilitate raising more money—currently estimated to be $40 million--to finance a building of theaters. It already enlarged its capital base by selling stock to U.S. theater giant Regal Cinemas (7%) and India’s PVR Cinemas (2%). Other big investors include Australian exhibition Village Roadshow (27%) and an Alabama state-worker retirement fund (27%).
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