The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Fusion Superplex yesterday revealed it has “lost north of $6m” in revenues due to its COVID-19 enforced closure, but pledged: “We’ll definitely be back.”

Carlos Foulkes, the cinema and entertainment complex’s chief executive, told Tribune Business the pandemic’s impact has been “devastating” for its financial health with the government yet to give permission for it and similar businesses to re-open.

While Fusion Superplex had hoped to resume operations this month, Mr Foulkes said he was now “hearing sip sip” that the competent authority - meaning the Prime Minister’s Office - may not give the go-ahead before August, further exacerbating the loss of top-line income.

He explained that losing much of the summer season would also be “significant” for a movie-dependent business such as his because this is when the Hollywood Film Studios typically unleash their new releases.

However, the Fusion chief said the complex’s financiers had “given us a break” by agreeing to wait until operations resumed before reviewing the terms/conditions of their lending facility and taking any further action.

Disclosing that Fusion Superplex’s 350 furloughed staff will be recalled in phases based on consumer demand, Mr Foulkes said the entertainment group was currently assessing how to adjust its business model to the post-COVID-19 realities.

With “hard economic times” faced by all Bahamians and residents, he said Fusion Superplex was seeking to “strike a balance” between business sustainability and tailoring products to meet reduced consumer disposable income.

Mr Foulkes confirmed price discounts are being eyed as a way to attract movie goers to watch “old movies and throwbacks” in the absence of new releases, while the complex’s restaurant offerings are mulling a shift from higher-end dining to sports bar-type fare given the reduction in consumer spending power.

“We have lost north of $6m in the last three months alone,” he told Tribune Business of the pandemic’s financial impact. “We had anticipated a wonderful summer with a slate of new movie releases, but because of Hollywood cancellations we no longer have access to those movies and don’t know when they will be released.

“The impact has been significant. Summer is big for the movie business. It’s been devastating. We are prepared to open as soon as we have the OK to do so. That means it will take longer to recover as a company, but that applies to the nation.

“Everybody is going to have a longer time getting back to where they were at the same time last year. We are ready to return. We wish to advise the public that we will definitely be back.”

Some Fusion employees had themselves previously voiced doubts as to whether the cinema and entertainment complex, overlooking the JFK Drive and Gladstone Road roundabout, would re-open given the extent of the revenue and bottom-line losses produced by the company’s continuing COVID-19 lockdown.

Other observers have speculated privately to this newspaper that the business was a potential candidate to be placed into receivership upon coming out of the pandemic given the issues that emerged following the nationwide mid-March lockdown imposed by the Government.

This newspaper reported that Fusion Superplex was unable to meet the last $500,000 monthly staff payroll before the lockdown, which Mr Foulkes blamed on the inability/refusal of the company’s debtors to pay the $1.2m in accounts receivables that they owed.

And it then emerged that the entertainment complex had not been paying National Insurance Board (NIB) contributions on behalf of staff, which had left furloughed workers unable to receive unemployment benefits when they applied. Mr Foulkes conceded then that the company was on a payment plan with NIB.

However, he told Tribune Business yesterday that Fusion Superplex’s lenders had agreed to provide the necessary financial breathing space until it resumed operations and business volumes had begun to recover.

“The significant loss of revenue means we have to be cautious on returning to the market,” Mr Foulkes said, “and we had to do negotiations with the lenders to say: ‘Give us a break, conditions are not favourable locally and globally’.

“We had positive news. They actually said to us: ‘Do whatever you have to do to get back into business, and we will review the lending conditions later’.”

Mr Foulkes added that Fusion Superplex, whose construction budget grew from an initial $42m to $50m, had been financed by a combination of Bahamas-based equity investors and overseas debt funding. He declined to identify them, while noting that the project had received no support from local banks or other lenders.

To “alleviate the concerns” of the Government and its healthcare advisers, Mr Foulkes said the entertainment complex is developing “a plan” showing how it will implement the required COVID-19 protocols with reduced customer numbers permitted inside its movie theatres and other facilities.

Fusion Superplex, together with the likes of Mario’s Bowling and Entertainment Centre, Galleria Cinemas and nightclubs, are among the final categories of businesses yet to re-open following the COVID-19 lockdown due to government fears that their confined spaces - together with the large crowds they attract - will lead to the virus re-emerging and spreading.

“We are trying to get an indication right now,” Mr Foulkes replied, when asked whether the Government has provided the sector with a re-opening date. “We were supposed to re-open in phase four, but this was delayed to phase five, and we’ve not gotten an official date. I don’t have a concrete answer.

“I am hearing ‘sip sip’ that it won’t be in the month of July, and we wanted to come back to the market this month..... Maybe we can get it done at the end of the month, if the Competent Authority allows, otherwise it may be be in August.”

Mr Foulkes confirmed that the company will recall its 350 furloughed employees in stages as COVID-19 restrictions eased and consumer demand increased. However, reduced numbers in the movie theatre, restaurants and arcade meant that it will “not need that many employees in the beginning”.

The Fusion Superplex chief added that the complex was already exploring what it can do to attract consumers in the ‘new normal’ created by COVID-19 while still remaining a viable business enterprise.

“We may have to make some changes to the model,” he told Tribune Business. “We’re looking to provide pricing discounts to the market, and do some old movies and throwbacks, where people can come in on reduced prices. These are going to be hard economic times for people and we’re sensitive to that.

“We have to be balanced so that as a company we can operate a sustainable business but also provide assistance to the public. We are looking to put some things in place that we can sustain, improving the product and service provided, and making it more accessible to more people.”

“If we make changes to the price structure, we will make sure they stay in place for a year, year-and-a-half, and the only thing that will make them change is if something happens beyond our control in the supply chain.”

Pointing out that meat costs were increasing in Nassau, Mr Foulkes said Fusion Superplex’s restaurant teams were assessing whether to shift the menu from a higher-end dining market that has “dwindled” to a sports bar-type offering.