AMC Entertainment Holdings Inc will be revamping 5,000 theaters to feature reclining La-Z-Boy type seats in an attempt to increase ticket sales and attendance.

The move, which will replace old seats with 1,800 reclining seats across 5,000 of its underperforming theaters nationwide, is projected to be worth about US$600 million.

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The renovation cost per theater is determined to be about US$350,000 to US$500,000, with a portion of the cost shouldered by the landlords.

Some competitors have expressed doubt over AMC's latest "quality over quantity" strategy, claiming that it would be counterintuitive to its goal since the renovations would reduce a theater's seating capacity, thereby decreasing attendance and sales.

However, it seems that AMC is proving them wrong.

Attendance figures have been up an average of 80 percent across auditoriums that have already been renovated.

AMC Chief Executive Gerry Lopez said that the theaters that showed the biggest attendance increase were the "weak performers."

He said that box-office revenues had increased by at least 60 percent across the 37 AMC theaters that had already undergone renovation during the first quarter.

Lopez is quick to point out, however, that the increase in attendance hasn't only been because of the reclining seats. A number of newly renovated auditoriums have also revamped their food service by providing a variety of food and drink choices comparable to Applebee's restaurant, The Wall Street Journal reported.

Ticket prices are expected to increase but not until after a year to cultivate "seed" behavior, Lopez said. In subsequent years, AMC said that the prices would typically increase to about US$1 to US$1.25 on top of current prices.

B. Riley & Co. analyst Eric Wold said that the company's quality over quantity strategy doesn't "conceptually make sense" but is encouraged by the reports.

In a similar vein, Regal Entertainment's chief financial officer David Ownby announced that the company will change its seats in 25 of its theaters by December of this year.

TagsLa-Z Boy type seats, AMC theaters, Regal Entertainment, David Ownby, Gerry Lopez, AMC Entertainment Holdings Inc, quality versus quantity