Bowlmor AMF

Bowlmor AMF
Bowlmor Lanes, AMF Bowling Center, Brunswick Bowling Center
Private
Predecessor American Machine and Foundry
Founded 2013 - created in the reorganization of AMF Bowling Worldwide
Headquarters New York, New York 10036, United States
Revenue $600 million[1]
Number of employees
 9,500[1]
Website bowlmoramf.com bowlmor.com bowlero.com amf.com brunswickbowling.com

Bowlmor AMF Corp. is the largest ten-pin bowling center operator in the world, with 304 centers the United States, eight centers in Mexico, and three centers in Canada.[2] The centers have an average of 40 lanes compared to the U.S. bowling center average of 21 lanes.[3]

Bowlmor AMF’s US centers represent 8% of the country’s 4,400 bowling centers.[4] Its nearest US competitors in size are Bowl-America, Bowl New England, Lucky Strike, and Main Event Entertainment, each with around 20 centers. Most of the other bowling centers in the United States are individually or family-owned.[4]

Bowlmor AMF currently operates the following bowling center brands:

In fiscal years 2014 and 2015, the company closed 34 of its leased centers and 7 of its owned centers because of negative cash-flow and other reasons.[2] It is spending $32 million annually through 2018 to renovate the others and expects that, by 2018, around 25 of the AMF centers will have been converted to Bowlmor Lanes and around 60 of the AMF centers will have been converted to Bowlero centers.[8]

Within the United States as of June 2015, centers consisted of 266 operating under the AMF, Brunswick, and Brunswick Zone brand names, 18 Bowlmor, 4 Bowlero, 13 Brunswick Zone XL, and 3 Brunswick’s.[2]

History

Bowlmor AMF was formed in July 2013 when AMF Bowling Worldwide (successor company to American Machine and Foundry), which had filed for Chapter 11 bankruptcy in May 2012, reorganized and combined with Strike Holdings LLC (doing business as Bowlmor Lanes, an upscale bowling and entertainment company). The new company is jointly owned by Bowlmor, certain of AMF Bowling’s second lien lenders including an affiliate of Cerberus Capital Management, and Credit Suisse. At time of the merger, the merged company operated 272 bowling centers and had 7,500 employees and a combined annual revenue of approximately $450 million.[9]

In the AMF Bowling reorganization, AMF’s second lien lenders converted their debt into equity in Bowlmor AMF. Credit Suisse provided a $230 million term loan facility and a $30 revolving loan facility, and the largest holders of AMF’s existing second lien debt provided $50 million of backstop financing to provide working capital for Bowlmor AMF and to pay cash distributions in varying amounts to AMF’s other creditors. AMF’s first lien lenders received payment in full, in cash, of principal, interest at the non-default rate, and their fees.[10]

Bowlmor Founder and CEO Tom Shannon became Chairman, Chief Executive Officer, and President of the combined company, and Bowlmor’s Chief Financial Officer and former President, Brett Parker, became Vice Chairman, Chief Financial Officer, and Executive Vice President. Shannon and Parker collectively own 22% of Bowlmor AMF[10] and will receive bonuses based on their ability to increase the profitability and worth of Bowlmor AMF.[5]

As part of the AMF Bowling reorganization, Bowlmor AMF assumed control of AMF Bowling’s 50% interest in QubicaAMF Worldwide, one of the largest manufacturers of bowling products in the world.[9] In December 2014 the Qubica founders and partners acquired this interest from Bowlmor AMF.[11]

In July 2014, the company announced that it had agreed to acquire all 85 centers of Brunswick Bowling & Billiards in a transaction to be financed by the sale and leaseback of 58 of the centers to iStar Financial, as well as a term loan. The acquired centers are to be operated as a stand-alone division retaining existing branding.[12][13] The acquisition was completed in September 2014.[1]

Shannon was named Bowling Proprietor of the Year in 2014 by Bowlers Journal International Magazine in recognition of his "vision and bold initiatives" to "divide the AMF bowling empire into three distinct brands."[8]

The status of league bowling

From the 1960s through the early 1980s, league bowling (a weekly group event where several teams bowl against each other over the course of a season) amounted to 75% to 80% of every bowling center’s business in the United States. By 2012, that percentage had dropped to 21%. Lifestyle changes in the last few decades have made league bowling less attractive. Additionally, many bowling center owners have shifted their focus to casual bowlers, who bowl at non-discounted prices and spend more on food and beverage, and to special events, which produce substantial revenue and introduce new customers to the center.[4][14]

When Bowlmor Lanes purchased its first center in 1997 to renovate and upscale it, league bowling was eliminated "to ease out regulars who did not cotton to the fancy trappings or the higher prices."[15] That strategy proved so successful that league bowling was not offered at the five other centers the company added, and by 2012 Bowlmor was one of the highest grossing bowling facility operators in North America.[5]

When Bowlmor and AMF Bowling combined in 2013, league bowlers at AMF’s existing 261 traditional bowling centers worried that the new owner would eliminate league bowling at their centers, too. Some cited a Bloomberg TV interview in which CEO Tom Shannon said, "I don’t think anyone takes bowling seriously – why would you?"[6] Concern grew when Bowlmor AMF significantly cut the operating hours at many centers as a financial measure, and in the process, displaced or eliminated some daytime bowling leagues.

Shannon was said to have responded that, "We plan to increase the league bowling business, not shrink it," citing AMF’s "large customer base" in league activity for declaring that its league bowling was "very safe." He said his company has "protected and defended 99% of (its) nighttime leagues"[16] and sees its acquisition of the Brunswick centers as "furthering (its) commitment to league play."[12] A company spokeswoman further stated that the company also aims to "introduce a new generation to league bowling" and wants to support professional bowling, including possible sponsorships of the Professional Bowlers Association (PBA).[17] In October 2014 the PBA entered into an entitlement partnership agreement that will make Bowlmor AMF an official partner of the PBA.[18]

Controversies

In December 2004, Bowlmor Lanes owner Tom Shannon said his company was severing ties with a group tied to the late Palestinian leader Yasser Arafat and was returning its $1.3 million investment.[19]

In August 2010, five ex-employees of Bowlmor Lanes in Manhattan's Union Square sued owner Tom Shannon claiming they were dismissed because of discrimination. They also alleged that Shannon used networking sites Facebook and MySpace to screen out minorities and others he felt weren't desirable for his club.[20]

References

  1. 1 2 3 "Bowlmor AMF Completes Acquisition of Brunswick Corporation's Bowling Center Business". MarketWatch. September 18, 2014.
  2. 1 2 3 "Consolidated Financial Statements (audited) for the Year Ended June 28, 2015" (PDF). Retrieved Oct 18, 2015.
  3. ↑ "Q4 2015 Financial Report" (PDF). Retrieved Oct 18, 2015.
  4. 1 2 3 "Bowling Industry Overview". Sandy Hansell & Associates. Retrieved March 1, 2014.
  5. 1 2 3 4 5 "Disclosure Statement for the Second Modified Joint Plan of Reorganization of AMF Bowling Worldwide, Inc., and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code (Document 818), Case No. 12-36495, United States Bankruptcy Court for the Eastern District of Virginia, Richmond Division" (PDF). Retrieved February 14, 2014.
  6. 1 2 "Interview with Bowlmor Lanes Founder and CEO Tom Shannon". Bloomberg Enterprise (TV). October 27, 2011.
  7. ↑ "Bowlmor AMF to open "nostalgic" bowling alley near The Woodlands". Houston Business Journal. May 2, 2014.
  8. 1 2 "Centers of Attention: Bowlmor AMF's Tom Shannon knows how to draw a crowd". Bowlers Journal International. June 2014.
  9. 1 2 "Bowlmor and AMF Bowling Worldwide Announce Completion of Merger". BusinessWire. July 1, 2013.
  10. 1 2 "Bowlmor Joins AMF’s Existing Second Lien Lenders, Including Cerberus and Credit Suisse to Sponsor New Chapter 11 Plan for AMF Bowling Worldwide". BusinessWire. March 18, 2013.
  11. ↑ "QubicaAMF Poised to Bring in a New Era of Bowling with Fully Invested Qubica Legacy Partners Owners". TalkTenPin. December 1, 2014.
  12. 1 2 "Bowlmor AMF to Acquire Brunswick Corporation's Bowling Center Business". PR Newsire. July 17, 2014.
  13. ↑ "iStar Seeking $120M for Bowling Portfolio Acquisition". Commercial Observer. August 1, 2014.
  14. ↑ "Bowling trends; the bad & good news". White Hutchinson Leisure eNewsletter. July 2012.
  15. ↑ "Top Entrepreneurs 2008". Crain’s New York Business. Retrieved March 3, 2014.
  16. ↑ "Building Blocks". Bowling Industry Magazine. May 2014.
  17. ↑ "Why Brunswick is bowing out of the bowling biz". CBS Moneywatch. July 29, 2014.
  18. ↑ "PBA, Bowlmor AMF Sign Entitlement Partnership Agreement". Bowlers Journal International. October 8, 2014.
  19. ↑ "NYC bowling alley to return Arafat funds". Associated Press. December 23, 2004.
  20. ↑ "Suit Claims Celebrity Haunt Used Facebook, MySpace to Weed Out Minorities". ABC News. August 17, 2010.

External links

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