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Retail Case Studies

They Should Make a Movie About This Company


Malco Theaters has attracted customers for 104 years by staying up to date on technology and amenities


M.A. Lightman, an engineer who was working on a bridge project in Florence, Ala., founded Malco Theaters. He went into town one day and saw people lined up on the street waiting to get into a building. It turned out the building was a movie theater. “He said, ‘If people are lining up for that, I want one,’” Senior Vice President Larry Etter says.


He named the company Malco Theaters – short for M.A. Lightman Company – and in 1915 opened his first theater. Today, 104 years later, the company is headquartered in Memphis, Tenn., and operates 36 locations within 400 miles of Memphis with more than 365 screens in Tennessee, Kentucky, Mississippi, Louisiana, Arkansas and Missouri. Malco ranks among the top cinema circuits in the world. The company also operates bowling centers and two of those are family entertainment centers that also offer arcade games, bowling, movies, restaurants and adult beverages.


Malco operates in smaller markets such as Tupelo, Miss., Monticello, Ark., and Owensboro, Ken. “We understand the communities,” Etter says. “There was a time when the theater manager knew more about the population in a community than the mayor. We would see the kids every Saturday night and knew who was dating who.”


The fourth generation of the Lightman family now operates Malco. One of the strengths of being a family-owned company is that it allows the owners to make decisions quickly. Etter tells of a customer who used a restroom while at a movie. “He called one of the principals that Saturday night and said ‘I don’t like the scent of your soap,’ Etter says. ‘Every time I put popcorn in my mouth, I smell lavender.’”


By the following Wednesday, Malco had pulled the lavender soap out of every restroom and replaced it with unscented soap.


Keeping Up
In 1997, when Etter joined Malco after having worked in the hotel industry and for a food management group, Malco was making plans to replace its slope seating with stadium seating. “That was a huge transformation,” Etter says. “If you didn’t have the money to rebuild, you lost market share. It put a lot of small-time theater owners out of business.”



Next came replacing film projectors with digital projectors and sound systems, which was a significant investment by ownership. The company is in the midst of replacing its seats with recliners. It is also offering extended menus and replacing arcade space with adult beverage options.


“A lot of times things are dictated to us by what the customers want,” Etter says. “Across all recreational facilities, you tend to give the customers what they ask for.”
Malco has. Movie theaters have competed against TV, Blockbuster, Betamax and VHS. Now they compete with restaurants and cable. “Everyone thought people would stay at home to watch when that format was invented,” Etter says. “It still hasn’t happened. People who watch movies at home, they go to the movies more often than people who don’t. But we have to provide the amenities to keep patrons coming back.”


Keeping up with its customers desires means Malco consistently has to find money to upgrade. Converting to digital projectors, for example, cost near six figures per auditorium.


“We have to change with the times,” Etter says. “We want the cinema experience to exceed what they have in their home.”


Beyond technology in the auditoriums, Malco has incorporated point-of-sale software to get a quicker view of sales of food. The company already has online ticketing and plans to develop apps that allow people to also pre-order food before arriving at the theater.
For as many upgrades as Malco has made over Etter’s 23 years with the company, Malco still depends on what Hollywood produces. “If the studios don’t make innovative, creative story lines and presentations, we don’t have anything to offer,” Etter says. “Over 104 years, I think we have been successful because the studios have continued to make great product. Our obligation is to put that product into facilities that have high standards.”


Best People
Malco is “constantly trying to find the very best people,” Etter says. Perhaps a greater part of their workforce of 1,200 is composed of young customers – 16, 17 or 18 – who want to work in a movie theater. “You would be surprised by how many people work for us just to get to see free movies,” Etter says.


Though hiring can be a challenge, Malco does well in retaining employees. “Individuals can start in concessions, then become supervisors, then food service manager, then assistant manager and then get the opportunity to manage a theater,” Etter says. “This family [owners] cares deeply about human capital.”


The company is currently researching laser projectors. It recently opened a more intimate theater with seven screens, a full restaurant and bar just south of downtown Memphis. While that fits in with the direction of the industry, Etter says it is still important to have larger multiplexes for big movies. “When you have blockbusters like Star Wars, Jumanji or Frozen 2 with a large number of people who want to see it as it opens, we need large theaters with higher seat counts,” he says.


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