Luxury dine-in theater chain iPic is filing for Chapter 11 bankruptcy amid financial woes that include a recent quarterly loss of $9.3 million, and missing a $10.1 million interest payment to the Employees Retirement System of Alabama and the Teachers Retirement System of Alabama. Today, the pic’s stock is at $0.70, down close to 60% in day trading.
The chain counts 16 locations and has sought to expand to 25, but it’s been a slow-go.
iPic CEO and founder Hamid Hashemi told Variety, which had the news this morning, that the chain’s financial bane has come from increased competition in the luxury theater space from such chains as AMC and Regal. He’s right, and in fact iPic has outpriced themselves when it comes to an evening movie ticket next to their competition.
When iPic launched in 2007, the idea of a chain serving up premium recliner seats, bistro menus and drinks was novel, and thus they could command a high price. However, others have entered the space and are charging less for exactly the same set of services iPic offers. In Los Angeles, a non-club iPic member can pay as much as $32 for a regular seat (not close to the screen) for a 7 PM show of Once Upon a Time in Hollywood. Compare this to $21 at Cinepolis’ Pacific Palisades venue, $17-$18.50 for the pic tonight at the Alamo Drafthouse LA, and $13.50 at the Simi Valley, CA Studio Movie Grill.
For the near future, iPic will remain operational. Distribution insiders believe the theaters themselves won’t go away. If iPic doesn’t restructure its debt, another buyer, such as a Cinepolis, could certainly scoop it up.