CGV Knocked Down by COVID-19... Closes Theaters and Accepts Voluntary Retirement

30% of 116 Directly Managed Stores Suspend Operations
Screen Cutoff Applied Even to Theaters Operating Normally

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jong-gil] CGV, the largest multiplex in Korea, will close thirty-five of its directly operated theaters starting from the 28th. Despite continuing operations amid a sharp decline in audiences due to the spread of the novel coronavirus infection (COVID-19), ongoing financial difficulties have led to a reduction in operations.

On the 26th, CGV announced that it would suspend operations at 30% of its 116 directly operated theaters. The theaters to be closed include locations in Seoul such as Daehangno, Myeongdong, Suyu, Cheongdam Cine City, Piccadilly 1958, Hagye; Gyeonggi and Incheon areas including Gimpo Pungmu, Uijeongbu Taeheung, Paju Munsan, Pyeongtaek Sosa, Yeonsu Station, Incheon Airport; Daejeon and Chungcheong areas including Daejeon Gao, Cheonan, Cheongju Yullyang, Hongseong; Busan, Ulsan, and Gyeongnam areas including Centum City, Asiad, Masan, Changwon, Ulsan Sincheon; Daegu and Gyeongbuk areas including Daegu, Daegu Suseong, Daegu Academy, Pohang; Gwangju and Jeolla areas including Gwangju Geumnam-ro, Gwangju Yongbong, Gwangju Hanam, Seojinju, Jeonju Gosa, Jeonju Hyoja, Mokpo, Suncheon; Gangwon and Jeju areas including Wonju and Jeju.

CGV will also apply screen cut-off measures at theaters that remain open, operating only some screening rooms. Screening sessions will be reduced to three per day (9 hours) at all theaters except CGV Yongsan I'Park Mall, Wangsimni, and Yeongdeungpo. In January, daily screenings were more than seven sessions. Due to the reduced operations, all employees will switch to a three-day workweek. CGV will pay employees suspension allowances for the downtime. The CEO, executives, and managers will voluntarily return 30%, 20%, and 10% of their monthly salaries respectively until the end of the year as a measure of shared sacrifice. Additionally, voluntary retirement will be offered to employees with more than 10 years of service, and unpaid leave will be implemented for those who wish.

On the 22nd, when the government strongly urged 'social distancing' to overcome COVID-19, a movie theater in Yeongdeungpo-gu, Seoul was quiet. Photo by Mun Ho-nam munonam@

CGV plans to request rent payment deferrals from all theater landlords. A company representative stated, “The total monthly rent for directly operated theaters amounts to 17 to 18 billion KRW. We plan to defer payments for the next six months and, once theaters normalize, pay in installments over 12 months.” Six theaters scheduled to open this year will postpone their openings to the first half of next year. Investment plans for two theaters scheduled for renovation have been completely suspended.

Since the end of January, when a COVID-19 confirmed patient visited the Sungshin Women’s University branch, CGV entered an emergency management system by reducing screening sessions. However, as the average daily audience dropped to 20,000 to 50,000, financial difficulties intensified, prompting stronger self-help measures. CGV explained, “Given the high fixed costs such as rent and labor in the theater business, it would be appropriate to suspend operations at all theaters until May, but we have decided to prioritize closing only thirty-five theaters for the sake of the film industry.” They added, “If the COVID-19 situation does not improve and prolongs, we may implement even stronger self-help measures, including suspending operations at all theaters.”

This content was produced with the assistance of AI translation services.