Alamo Drafthouse Files for Bankruptcy, Will Close Flagship Location

Alamo Drafthouse, the movie theater franchise largely credited with popularizing dinner and drinks service during film screenings, filed for bankruptcy on Wednesday and announced its flagship location, located at the Ritz in its hometown of Austin, Texas, will close permanently along with several other locations.

The franchise blamed the COVID-19 pandemic for the bankruptcy, saying that it had its best-ever year in 2019.

“Alamo Drafthouse had one of its most successful years in the company’s history in 2019 with the launch of its first Los Angeles theater and box office revenue that outperformed the rest of the industry,” the company’s CEO, Shelli Taylor said in a statement provided to the Austin-American Statesman.

Taylor said the company would restructure and continue operations as normal in its remaining theaters.

“We’re excited to work with our partners at Altamont Capital Partners and Fortress Investment Group to continue on that path of growth on the other side of the pandemic, and we want to ensure the public that we expect no disruption to our business and no impact on franchise operations, employees and customers in our locations that are currently operating.”

Due to COVID-19 restrictions, currently less than half of Alamo Drafthouse’s 41 locations are open. According to a statement from Tim League, the company’s founder, the business will work on renegotiating leases and streamlining operations to return stronger in the future. 

“Because of the increase in vaccination availability, a very exciting slate of new releases, and pent-up audience demand, we’re extremely confident that by the end of 2021, the cinema industry – and our theaters specifically – will be thriving,” said League. “These are difficult times and during this bankruptcy we will have to make difficult decisions about our lease portfolio. We are hopeful that our landlord and other vendor partners will work with us to help ensure a successful emergence from bankruptcy and viable future business.”

Alamo Drafthouse is one of several theater chains struggling. AMC Theaters recently narrowly escaped bankruptcy thanks to a nearly $1 billion cash infusion from retail stock investors. Alamo Drafthouse, a private company, has no stock available. 

Alamo Drafthouse joins California Pizza Kitchen. Ruby Tuesday*, Sizzler and Chuck E. Cheese parent CEC Entertainment as big-name franchises to go under during the pandemic.