Upgrading the Brand: Rolando Rodriguez takes Marcus Theatres to the next level

Features
Cinemas Features

Marcus Theatres entered a new era in August 2013 with the appointment of Rolando Rodriguez, former president and CEO of Rave Cinemas, as the circuit’s new president and CEO. Rodriguez spent 30 years at AMC Theatres, the nation’s second-largest theatre chain, in positions including senior VP of North American field operations, senior VP of food and beverage, and executive VP, North American operations service. Between his stints at AMC and Rave, he spent five years at Walmart in roles including VP and regional general manager for four states.

With Rodriguez at the helm, Marcus Theatres last year embarked on an ambitious $90 million-plus program to upgrade amenities at its locations, including the installation of luxurious DreamLoungerSMleather recliners; the rollout of new UltraScreen® DLX™ (DreamLounger eXperience) premium-large-format auditoriums with giant screens, Dolby Atmos immersive sound and those full-recline chairs; and additional Big Screen BistrosSMoffering full-service, in-theatre dining, Take Five Lounges (full-service bars), and Zaffiro’s Express dining areas specializing in thin-crust pizza. Currently, the circuit has 13 DreamLounger theatres, six Big Screen Bistros, 14 Take Five Lounges, and 16 Zaffiro’s Express locations.

“It was a very bold step for the Marcuses to say: Not only are we going to invest in the business, we’re going to invest big. We’re going to invest in some new programs and innovations and invest in new leaders,” Rodriguez declares. “That really tells you about their ability to think long-term, and that makes our company so precious. When you look at our industry, there are so many rapid changes. And here is this company celebrating our 80th anniversary—what an amazing accomplishment! And three generations of leadership strong from the Marcus family.”

Rodriguez continues, “Greg Marcus and I are in total alignment on this: We always have to be thinking continuous improvement and what’s next. That’s an important feature of any successful company. When you stay status quo is when you start retracting and forgetting that the customer’s mind, tastes, wants and needs are constantly changing. We organizationally and industry-wide need to be thinking about what’s next, what’s important to that customer, what should the amenities be that make that out-of-home entertainment a valuable situation that cannot be duplicated at home.

“Leading up to joining Marcus,” Rodriguez recalls, “I spent quite a bit of time with Steve and Greg, talking about and understanding their vision for the company, what was working well for them, and the things they felt I might be able to bring in and do differently… Through that dialogue, we both determined there were some great things the company had been doing over the course of 80 years—you’re not in business for 80 years if you’re not a successful company! There were things that they had been testing for quite a while, and those things were in a determination phase to see whether we were going to roll them out or expand them, and whether they were worth the expansion or not…

“There were things in the food and beverage [area] that the company had already made groundbreaking efforts in, and there were things like the UltraScreen DLX, which was kind of a new spin, with the Atmos sound and DreamLounger recliners. With some of the pricing opportunities, we felt we could attract a valued consumer into the marketplace. Tuesdays are $5 discount days and we offer the popcorn on us. We really wanted to show that we were going after a valued consumer who had lost interest or could no longer afford to go to the movies. We did not see any deterioration of our weekend business and we created what I would call a fourth weekend night on Tuesdays geared toward a very valued consumer during tough economic times.”

That pricing experiment produced a happy surprise. “What we also figured out is that people who had been catching that first big movie on the weekend and were only seeing one…we found that almost 25% of our customers were now coming on Tuesdays and six days before or after were seeing a second movie. Which told us that we were creating a habit of moviegoing: ‘You know what? I’ll catch that top movie I wanted to see, and see a second movie on Tuesday.’ That created for us some real incremental attendance.”

Rodriguez is proud of the progress achieved since his arrival. “When you couple investments of just over $90 million in less than two years, renovating our theatres, introducing new amenities, looking at some price points to go after an audience that was lost… Then lastly, we introduced our loyalty program, and in less than a year we are over a million members strong. When you combine all those elements, it’s been a real success story, a continuation of a success story for the Marcus family and The Marcus Corporation, who are very savvy about knowing what they are doing well and looking at new things to make them strong. All of that didn’t happen by chance, it happened because of a great combination of a new team, consisting of some very tenured Marcus associates with incredible knowledge, expertise and creativity, and with some new experts that I brought in… When you bring in this external expertise in key disciplines along with some amazing tenured and well-versed associates, we created what I call ‘one plus one equals five.’”

And now Marcus Theatres is looking to bring its upscale venues to new territories. “We’re going to start considering potential acquisitions, and this will be outside of our seven-state footprint,” Rodriguez reveals. “We believe that we’ve built a team and the formula necessary that we can take this show on the road and be very successful.” He adds that the company is “looking across the spectrum. It could be either coast, or the southern corridors. We think we have a competitive advantage in some of these areas.”

With their new food and beverage offerings, “we are really in the restaurant business and the lounge business as well as the cinema business,” Rodriguez notes. “My second job was tearing tickets as an usher. Our idea of food and beverage back in those days was popcorn, candy and hot dogs. And we thought hot dogs was diversification! Well, fast-forward to today: You have chicken wings in the concession stand, hot dogs, hamburgers, fries, sandwiches. The broad spectrum of the customers’ wants and needs is different. And now with in-theatre dining, you’re preparing actual meals—pasta, special dishes. This is not something that traditionally we’ve been trained for. This is really a step change for the industry.”

But Marcus Theatres has an advantage in this new world of in-theatre dining and cocktails. “Marcus has been in the food and beverage business for many years,” Rodriguez points out. “Marcus used to own Applebee’s, Kentucky Fried Chicken and Big Boy franchises. Plus our hotel and hospitality business does a lot of catering inside the hotels. Bringing that knowledge to the theatre stock has been very successful for us. And then identifying in particular markets what types of foods we’re going to offer. We’ve gone pretty wide with our Zaffiro’s Express, because pizza works everywhere. But when you get into pasta and meats, you have to think about the market you’re serving and how you’re going to serve that niche, and I think we’re very good at that.”

Rodriguez’s five years at Walmart have also taught him some valuable lessons.

“The retail business is no different than the theatre business: We’re about the customer. Walmart does it totally with price—their mission is the lowest price in the marketplace for branded products. They’re almost a self-service type of situation, and they’re a category killer. And theatres are somewhat of a category killer now—we play a multitude of different products, which is why we have from 12 to 16 screens. We’ll play [studio] product, we play the Met Opera, we will bring in certain sporting events when we’re allowed. And we have lounges and restaurants in our theatres now.”

Rodriguez has also carried over the Walmart habit of visiting the competition, “not to see what they are doing wrong, but what they are doing right. Come back, learn from what they are doing right and how we can do it equal or better. That’s a key learning I’ve taken to heart by touring all of our competitors. Second is their passion and understanding of the consumer and the economy. This [is reflected] in our Tuesday discount day and the free popcorn for the customer. It’s understanding that there are a lot of customers out there who haven’t been getting serviced, because they can no longer go out and have an entertainment experience. I can’t tell you how many families, mothers, have written and called me saying, ‘Thank you, I can now take my husband and two children and go see a movie, and this is our entertainment evening.’ What we perceive on the coasts as ‘$20 for four, that’s pretty cheap,’ you forget that there are a lot of people between California and New York whose household income is $40,000 a year. I think we are doing something right, which is what our Marcus family believes: Service the community, service the consumer, and obviously take care of the shareholders and vendors we represent.”

Rodriguez also strongly believes in providing alternatives to the big studio blockbusters for those moviegoers seeking a change of pace. “The consumer wants it all—they want an amazing experience of dining, lounge, great film on the UltraScreen. But they also want different types of films—they don’t just want The Avengers, they want that small specialty film that’s unique… We have about 15 to 16 locations that are niche to that indie focus, and have worked extremely hard at developing that audience and it’s working very well.”

Rodriguez proudly shares that even during the disappointing box-office year that was 2014, Marcus Theatres’ revenues were up. “I don’t think it’s a business in trouble,” he says of those who see doom whenever there’s a box-office slump. “Those of us who have been around a long time recognize the cycles of ups and downs in the industry. We also recognize that sometimes it’s a wake-up call to reinvent ourselves, through DreamLoungers, Take Fives, UltraScreen DLXs, providing amenities so the consumer says, ‘Wow! This is exciting. I have to get back into the movies.’”

Rodriguez says he’s “honored, humbled and privileged” to be part of the Marcus tradition. “Clearly, I’ve been a leader in many different companies, from Walmart, the largest company in the world, and AMC Theatres, where I spent 30 years, to Rave Cinemas. But I really see the special care that the leadership has put into fostering this company and what it means to the associates. My head of operations, Mark Gramz, just celebrated his 44th anniversary with the company. How humbling is that, when you think about our kids, who will probably have 20 different careers in their lifetime, and here you have a company that represents 80 years of tradition and a lifetime of employment for great associates who were loyal and committed and delivered results…and continue to support me in helping to build what we’re doing.”

Overall, Rodriguez says, “I’m excited to be back in the industry. I spent five years at Walmart and I love retail. I never thought I was coming back, but when the opportunity was presented to me, I couldn’t have been happier. I have tremendous long-term friends in the industry. It’s a niche industry where just about everybody knows everybody, a friendly industry that cares about people. So being back and being with a company with the rich tradition of Marcus, I’m one of the happiest men on Earth.”