By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Galleria Cinemas yesterday confirmed it will close its JFK Drive location permanently this Thursday, suggesting the move - driven by economic and industry conditions - would impact five jobs at most.

Chris Mortimer, Galleria's president, told Tribune Business that the moribund Bahamian economy and a shift in how consumers watched movies meant there was insufficient demand to support the location.

He added that the company will focus on "retooling" its main Mall at Marathon site.

Mr Mortimer said: "We will be closing on June 29. We have a very small core of permanent staff there; just the general manager and a couple of other persons who are permanent. I think it's five persons at most. Everyone else is a contractual worker or someone we usually engage during the summer period.

"There are a number of reasons for the closure," he added. "For one, 2008 changed the game for the world and the Bahamas economically. Over the past five years we have had an economy with effectively zero growth. You can't think of these things in a sentimental nature. You have to make sound business decisions in the long-term interest of the company. The closure of that location is just us making a decision in the best interest of the company."

Mr Mortimer said the cinema industry globally was under increasing pressure, due to the expansion of movie delivery channels that targeted consumers in the comfort of their own homes. He added that the Bahamas was no different, meaning that Galleria was facing the same competitive challenges.

"Over the past few years the industry has been shrinking and, more importantly, over the course of the next few years the real focus is going to be on direct delivery to customers," he explained.

"The android boxes, Netflix, Amazon Fire TV Stick, and Facebook is looking to get into film. There are a number of online entities which will change the landscape of entertainment delivery."

Mr Mortimer, though, said Galleria still believes there is a market for the cinema experience. "While we still believe that there is a market for people who want to go out and enjoy a movie on the big screen, we have decided to retool our Mall at Marathon location where we are going to invest in digital 3D, recliner seating and reduce the cost of tickets very soon, so that persons will have an opportunity to enjoy that experience as a part of the Mall at Marathon, which is the best singular consumer location in the country," he added.

The Galleria president also acknowledged the development of an IMAX cinema off Gladstone Road, but did not indicate it was a factor in the JFK Drive location closure. "I have been aware of it since 2010. They have been at it for a while," he said of the IMAX developers.

"The whole IMAX format was something Galleria looked at a long time ago, but it wasn't something that we were interested in or looked to implement. We say kudos to those attempting to bring something different to the Bahamian consumer. There is no ill will and we hope that they have all of the success as similar entrepreneurs. We hope that they are able to have success with the level of sacrifice, time, money and effort that they put into making it a reality."

The JFK Drive cinema opened in 1999 under RND Holdings. Galleria acquired its cinema operations in 2004 after its competitor ran into financial difficulties created by multi-million dollar losses and an excessive debt burden.

RND Holdings retained ownership of the cinema's real estate, but Jerome Fitzgerald, former minister of education, ultimately sold his majority ownership to the A.F. Holdings (Colina) group.

The cinema is now owned by Colina Real Estate Fund, with Galleria as its tenant. Ken Donathan, its president, did not return Tribune Business's calls yesterday seeking comment on the impact of Galleria's pull-out.

The JFK Drive Plaza is Colina Real Estate Fund's major asset, accounting for $8.5 million or 64 per cent of its $13.22 million investment property assets in 2015. And Galleria, together with the CIBC FirstCaribbean International Bank (Bahamas) branch, one of its anchor tenants.

It is understood that a church group is likely to lease the space being vacated by Galleria.