AMC COMBINES THE BIG PICTURE WITH LITTLE TOUCHES.

Byline: Dana Fields Associated Press 

Stan Durwood, who has a $9 billion plan to build megaplex movie theaters worldwide, is talking to his shareholders about flowers and hand lotion.

As much as roomy seats, speedy snack service and the richest movie sound known to technology, it's such little luxuries as hand lotion in the ladies' room that make a theater distinctive, says the chairman and CEO of AMC Entertainment Inc.

``These are big expenses when you think about them,'' Durwood, 76, booms to the crowd at AMC's annual meeting. ``Don't think about 'em too long!''

Durwood thinks about them plenty, as the kind of patron-pampering investments that helped turn his father's one-screen theater in downtown Kansas City into one of the nation's largest-grossing theater chains.

Revenues for its latest fiscal year were $658 million, up from $407 million five years earlier, when the company launched a fiscal makeover.

Now, 34 years after Durwood made a Kansas City shopping mall the home of what is widely accepted as the world's first twin-screen theater, AMC Entertainment is engaged in aggressive expansion. A five-year plan calls for worldwide construction of an average 60 megaplexes - theaters of 16 screens or more - every year, at a cost of about $30 million each.

Many will be AMC's trademark mall-side big boxes. Others will make industry news for their locations: in Hong Kong, gateway to the vast Chinese market; on New York's cleaned-up 42nd Street, where the landmark Empire Theater is being moved 70 feet to be the facade of a 25-screen megaplex.

``It's a $9 billion goal, a huge goal,'' Durwood says. ``And I think we can get there gradually.''

In the short term, AMC aims to raise its screen count to 3,000 by the end of its 1998 fiscal year from the current 1,932 screens scattered among 231 theaters in the United States and, since last April, Japan and Portugal.

What will keep the customers coming in, Durwood believes, are the touches he fondly credits with giving the chain an annual average of 65,000 patrons per screen, compared to an industry average of about 50,000.

Steeply tiered seating assure a clear sight line from every plush, high-packed seat. Arm rests have retractable cup holders and can be lifted to accommodate a sleepy child or a cozy couple. Leg room is 46 inches, six inches beyond the industry average.

And more: A special Patron Assistance Program sees to the needs of the elderly and disabled. Tickets are available over the phone or at ATM-like machines in lobbies. The million or so members of the industry's first frequent-moviegoer club earn premiums such as water bottles and music cassettes.

``Our goal,'' says Durwood, ``is to say to the consumer, we love ya. We really appreciate your business. We want to make your stay pleasant and fun.''

Showman of the Year

Such passion for coddling the customer permeates AMC's corporate culture and helped earn Durwood the 1996 Showman of the Year Award of the National Association of Theater Owners.

Studio executives used the occasion to shower him with accolades: Visionary. Innovator. An old-school entertainment mogul, once again leading the industry into its high-tech future.

Over breakfast at a suburban family-style restaurant, Durwood waves it all off, as he does other bits of conventional wisdom about theaters. Take the matter of screen counts, for instance.

``That's a stupid way to measure the size of a company,'' he announces in a rapid and energetic patter that, along with his startlingly unlined face, suggests a man perhaps 25 years younger. ``If we had one screen doing a zillion dollars, we'd be the biggest in the world.'' AMC's screen counts also dip sometimes as the chain closes old or underperforming theaters.

What really counts are gross revenues, according to Durwood, who predicted last August that AMC would outpace the larger United Artists chain in that category.

At the end of September 1996, United Artists reported revenues from its roughly 2,300 screens in 387 theaters at $512 million through its first nine months. With about 400 fewer screens, AMC reported revenues of $528 million through the first nine months of its fiscal year, ending Dec. 28.

Better balance sheet

The grosses hearten those in the investment community who recall that AMC ran its debt up to unnerving heights a decade ago.

In 1991, eight years after taking the company public, Durwood installed a new team to lay the groundwork for expansion. Philip Singleton, a veteran regional vice president, became chief operating officer, and former investment banker Peter Brown was named chief financial officer.

Brown recounts the steps that led to a tripling of cash flow to the current $112 million a year: cost-cutting, a 1994 stock offering and a refinancing of debt.

Today's more assuring balance sheet helps AMC ride out the highs and lows in an industry where the quality of the fare and consumers' unpredictable tastes can rock quarterly results and stock prices.

The blockbuster ``Independence Day'' helped push total AMC attendance up 9 percent last July from the previous year. But August saw a 15 percent drop from the previous year, and AMC stock had fallen from a 52-week high of $34.50 in June to its current price in the $18 range.

Still, analyst Paul Marsh of Cowen & Co. in New York continued to rate the stock a strong buy, in part because of the strong drawing power of the new megaplexes.

Similarly, Art Rockwell of Yaeger Capital Markets in Los Angeles rated the stock a buy - albeit a weak buy - after third-quarter results failed to reflect the expected kick of the studios' big holiday offerings.

``I think the expansion comes in spurts, and there's a cost to it. Their margins do get squeezed,'' Rockwell says. ``But having said that, on a store-for-store comparison, (attendance was) down for the quarter.''

Durwood, meanwhile, is confronting a challenge entirely unrelated to movies. After decades of keeping his personal life out of the news, he went public Jan. 10 with a terse announcement that he had begun treatment for esophageal cancer.

Bright future

While Durwood plans to remain active as chairman and CEO, Brown has gained the additional title of president of AMC, and Singleton has taken on additional duties as president of American Multi-Cinema Inc., the company's theatrical exhibition arm.

In those positions, the pair are charged with continuing to carry out Durwood's vision - which sounds a lot like their own. Singleton talks with his boss's visionary enthusiasm about big theater complexes, what they can do for the customer and the company now and what they might become.

``With what technology's going to offer us and consumers worldwide, there's such a mushrooming demand for entertainment that it's a tremendous opportunity for us,'' he says. ``We've just got to manage it.''

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Photo

Photo: (Color) Stan Durwood, 76, chairman of AMC Entertainment Inc., hopes to build an average of 60 megaplexes per year around the world.

Associated Press