Mar­cus was state’s top widely held stock in 2018

Theater/ho­tel busi­ness tops Du­luth Hold­ings

Milwaukee Journal Sentinel - - Business - Paul Gores Mil­wau­kee Jour­nal Sen­tinel USA TO­DAY NET­WORK - WIS­CON­SIN

When you’re in the movie theater and ho­tel busi­ness, it helps when the econ­omy is strong and con­sumers and com­pa­nies are spend­ing money.

But it also doesn’t hurt when one of the mantras of your top ex­ec­u­tive to em­ploy­ees is to strive to “make an or­di­nary day ex­tra­or­di­nary” for film-go­ers and guests.

A good econ­omy, a fo­cus on lon­grange growth, and steady in­vest­ments aimed at im­prov­ing and ex­pand­ing — along with, some say, a very cus­tomer­centric busi­ness phi­los­o­phy — com­bined in 2018 to make the stock of Mil­wau­kee-based Mar­cus Corp. the best per­former of the year among ma­jor pub­licly traded com­pa­nies in Wis­con­sin.

Mar­cus Corp. closed 2017 with a stock price of $27.35, then watched it rise to $39.50 by the end of 2018. With div­i­dends fac­tored in, to­tal re­turn amounted to 46.6 per­cent, ac­cord­ing to an anal­y­sis by Morn­ingstar Inc.

That topped sec­ond-place fin­isher, Du­luth Hold­ings Inc., the par­ent com­pany of rugged-look cloth­ier Du­luth Trad­ing Co., which posted to­tal re­turn of 41.3 per­cent in 2018 — a year in which the S&P 500 In­dex dropped 6.24 per­cent.

“Our ap­proach at Mar­cus has al­ways been if you stayed dis­ci­plined and you’re fo­cused and make the right de­ci­sions over the long term, then the stock price kind of takes care of it­self,” said Chief Fi­nan­cial Of­fi­cer Dou­glas A. Neis.

Although Mar­cus hasn’t re­ported its 2018 year-end earn­ings yet, it had been post­ing record rev­enue dur­ing the year, with in­creases in both its theater and ho­tel-re­sort di­vi­sions. Through the third quar­ter last year, Mar­cus had rev­enue of al­most $532.1 mil­lion, up 9 per­cent from $488 mil­lion in the first nine months of 2017.

“I think it’s a func­tion, first of all, of the movie the­aters. They have done very well. These the­aters have got­ten pretty fancy, and I think peo­ple have bought into it,” said John F. Col­lopy, di­rec­tor of re­search for the Oshkoshbased bro­ker­age firm Carl M. Hen­nig Inc. and a fol­lower of Wis­con­sin stocks. “The ho­tel busi­ness, the re­sorts, has been good also.”

Ac­qui­si­tions pay­ing off

In 2016, Mar­cus ac­quired St. Louis­based cin­ema op­er­a­tor Wehren­berg The­atres, in­creas­ing its num­ber of screens by nearly one-third. That ac­qui­si­tion is pay­ing off, said Wall Street

an­a­lyst James C. Goss.

“Over the past cou­ple of years Mar­cus has in­creased its foot­print in the theatri­cal ex­hi­bi­tion space with the very suc­cess­ful ac­qui­si­tion and in­te­gra­tion of the Wehren­berg The­atres chain out of St. Louis,” said Goss, a man­ag­ing di­rec­tor at Bar­ring­ton Re­search in Chicago. “Mar­cus has up­graded many of those prop­er­ties with its re­cliner seat­ing and en­hanced food and bev­er­age op­tions, among other things.”

Neis said that more than five years ago, Mar­cus be­gan up­grad­ing many of its the­aters and added BistroPlex restau­rant-theater lo­ca­tions to stay at the fore­front of mod­ern movie venues.

In Novem­ber, Mar­cus an­nounced it was buy­ing the as­sets of New Or­leans­based Movie Tav­ern from VSS-South­ern The­atres LLC. Movie Tav­ern has 22 lo­ca­tions and 208 screens in nine states. With the Movie Tav­ern ac­qui­si­tion, which is set to close in the first quar­ter of this year, Mar­cus The­atres will own or op­er­ate 1,098 screens at 90 lo­ca­tions in 17 states — about 23 per­cent more than to­day.

“Late last year it an­nounced its in­tent to ac­quire the Movie Tav­ern prop­er­ties, pro­vid­ing both an­other new op­por­tu­nity along with an af­fir­ma­tion of its in­tent to con­tinue in an ex­pan­sion mode,” Goss said. “We con­tinue to like Mar­cus and its evolv­ing pro­file as the fourth­largest, do­mes­tic theatri­cal ex­hi­bi­tion chain plus its added ex­po­sure in the hoa­long tel and restau­rant space.”

Ho­tel-re­sort rev­enue was up about 2 per­cent for Mar­cus in the first three quar­ters of 2018.

Po­lite, metic­u­lous cul­ture

Among Mar­cus’ best-known Wis­con­sin prop­er­ties are the Pfis­ter Ho­tel in Mil­wau­kee and the Grand Geneva Re­sort and Spa in Lake Geneva.

Mar­cus an­nounced in Novem­ber it was re­brand­ing down­town Mil­wau­kee’s In­terCon­ti­nen­tal Ho­tel as the Saint Kate, an in­de­pen­dent, arts-fo­cused ho­tel named af­ter the pa­tron saint of artists, Cather­ine of Bologna.

In­vest­ment ad­viser Brian G. Rafn, of Mor­gan Dempsey Cap­i­tal Man­age­ment in Menomonee Falls, said Mar­cus Corp. has es­tab­lished an in­no­va­tive ap­proach with a po­lite and metic­u­lous cul­ture — right down to con­sis­tently clean re­strooms in its the­aters — that set the stage for suc­cess.

“They re­ally en­joy their busi­ness, and it shows,” Rafn said.

That sen­ti­ment seems to square with what Neis said is an oft-re­peated phrase by the com­pany’s pres­i­dent and chief ex­ec­u­tive, Greg Mar­cus.

“As Greg likes to say, what we try to do each and ev­ery day is to make an or­di­nary day ex­tra­or­di­nary for our cus­tomers and guests,” Neis said. “From the peo­ple who are pop­ping the pop­corn and rip­ping tick­ets, and ev­ery­thing else at our the­aters — and at our ho­tels, from the front desk to the house­keep­ing — we’ve got an out­stand­ing cor­po­rate staff here.”

MICHAEL SEARS / MIL­WAU­KEE JOUR­NAL SEN­TINEL

Peo­ple pur­chase food and snacks Thurs­day at the Mar­cus Ma­jes­tic theater in Brook­field. Mar­cus Corp. was the top-per­form­ing stock among Wis­con­sin’s ma­jor pub­lic com­pa­nies in 2018.

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