AMF dismisses head; others change course in bowling market
Tom Zatorski, formerly AMF's Polish president, cited personal reasons for the parent company's decision to sever its relationship with him. AMF would not go into detail as to the reasons for the dismissal, but added that the market here wasn't big enough to support a large team.
"I was very upset to leave AMF. My dismissal came unexpectedly," Zatorski said. "We've been working as a team here and when a team loses a leader, everything gets scrambled. We had a lot of plans, we had a lot of marketing ... and now it's all hanging in the air."
"To a certain extent I believe that that decision (for my dismissal) was personal," he added.
The company needed a smaller presence in Poland because the business was not there to support the Polish team, said Adolf Spangenberg, senior vice-president of AMF for Europe, the Middle East and Africa. "It's an adjustment to reality," he added.
The changes at AMF come as the bowling market in Poland is looking to heat up, although some potential players, like Atomic Entertainment, are finding that it is necessary to change strategy in this nascent market.
AMF manufactures and sells bowling equipment in Poland and also supplies a range of items to bowling alleys throughout the country. Following the dismissal of Zatorski, at least four of the seven employees in AMF's Poland branch resigned.
However, one of these employees who originally resigned has agreed to stay with AMF, according to Bent Petersen, executive vice president of AMF in Europe. Another employee is possibly reconsidering her resignation. AMF Poland's three-member installation crew will also remain with the company.
When asked why the company had decided to dismiss Zatorski instead of lower-level employees if it was cutting back, Spangenberg responded, "Usually if something doesn't work out you start from the top." He would not comment on what specifically did not work out with Zatorski.
"Maybe he's just too big of a spender" at times when he needed to keep expenses down, said Petersen, in explaining the dismissal.
Zatorski's dismissal is part of a global belt-tightening for AMF. During September, the company laid off about 15 employees in Europe and 100 employees in Asia, according to Spangenberg. The company has been hit globally by a cancellation of expected projects and a drop in sales of bowling equipment to new investors, he added.
The Polish office will now be led by Petersen, who will oversee both AMF's Russian and Polish businesses from the Warsaw office until he retires in January. It is "conceivable" that someone will replace Petersen in January, Spangenberg said.
"I'm absolutely bullish on this market, we're going to be committed to this market, and we're going to go full speed forward," Petersen said.
One of AMF's largest deals in Poland is an approximately $9 million contract signed with Atomic Entertainment to install about 200 bowling lanes.
Atomic changes too
At the same time, Atomic is tinkering with its bowling center plans in Poland, but with far less drastic changes. Atomic, a leisure company, had originally planned to secure up to 20 sites in 1998 for bowling centers around Poland. But the company said last week that it will now lease space for bowling centers from existing or planned retail centers.
Atomic has leased space in Wroclaw from Apsys, a retail developer that started construction in September of a complex containing shops, a food court and leisure center.
Atomic decided to abandon a greenfield approach to bowling centers because of the costs associated with such a strategy, said Marc Bushala, the company's president.
"It's not difficult to find sites, but it is hard to get them cheaply, so in a lot of cities where we were looking for greenfields it was better to find retail developers," he said.
Romek Lubaczewski, Atomic's operations manager, said that when the company first crafted its strategy last year it did not foresee such problems.
"Prices are crazy," he said. "People usually want to get twice as much as what the realistic price should be."
By going with retail centers, Atomic believes it will have a greater opportunity to secure sites, Bushala said. He added that most Western retail developers understand the importance of the entertainment business and so decide to build leisure centers in shopping complexes throughout Poland.
"For example, Metro is going to build 17 new stores with leisure components included in most of them," Bushala said. "So we shifted our attention to retail schemes."
Bushala also said that working with multiplex operators will give his company increased opportunities to expand quickly.
Bushala said Atomic is eyeing a retail complex in Promenada in Warsaw that is being developed by Ster-Kinekor. The South African multiplex operator has also signed a contract to install cinemas in the Wroclaw retail center in which Atomic plans to be present, according to an official with Ster-Kinekor who did not want to be named.
Although Atomic has ambitious plans for bowling centers, it is not the first on the market with lanes. There are already bowling lanes installed at several hotels around Poland, such as the Golebiewski hotel in Mikolajki and the Amber in Miedzyzdroje.
However, these are small operations and not on the same scale of Western-style bowling centers.
But the first modern bowling center has already been opened, in March 1998, in Poznan by Centrum Rekreacji Niku. The company said that so far the center, which took six months to build, is proving a success.
"We are getting popular, there are up to 1,000 people visiting the center on weekends," said Igor Nowak, marketing manager at Centrum Rekreacji Niku, "And we expect that by the end of this year 1 million visitors will go bowling in Poznan."
The company, which is owned by Polish-Singapore investors, also has plans for expansion in Krakow, Gdansk, Wroclaw, Szczecin, Katowice and Warsaw. Nowak said that all planned bowling centers would have the same standard as the $5 million investment in Poznan. Nowak argued that there is practically no competition, except for Atomic Entertainment, which is planning to build centers in nearly the same cities. But he does not see Atomic as a threat in such an undeveloped market.
"Even if there are more bowling centers to be built by other companies, there's room for them on the Polish market," he said. "There are usually two or more such centers in Western cities."
But Atomic isn't only planning on bowling centers for Poland, it's looking abroad as well. "We accelerated our plans for opening centers outside of Poland (Italy, Hungary, the Czech Republic, Spain, the Netherlands)," Bushala said, "as we've been encouraged by our multiplex operators with whom we cooperate in Poland."
Atomic hopes to realize its investment plans by raising combined debt and equity capital of $50 million.
"We are talking to various Polish and foreign banks for the debt capital and to foreign institutions for the equity capital," Bushala said. "But our total capital requirements will depend upon the ratio of leasing vs. building centers."
Atomic, which has already invested $10 million in Poland and owns clubs and restaurants throughout the country, is planning a bond issue to raise additional capital in the year 2000.
"I was very upset to leave AMF. My dismissal came unexpectedly," Zatorski said. "We've been working as a team here and when a team loses a leader, everything gets scrambled. We had a lot of plans, we had a lot of marketing ... and now it's all hanging in the air."
"To a certain extent I believe that that decision (for my dismissal) was personal," he added.
The company needed a smaller presence in Poland because the business was not there to support the Polish team, said Adolf Spangenberg, senior vice-president of AMF for Europe, the Middle East and Africa. "It's an adjustment to reality," he added.
The changes at AMF come as the bowling market in Poland is looking to heat up, although some potential players, like Atomic Entertainment, are finding that it is necessary to change strategy in this nascent market.
AMF manufactures and sells bowling equipment in Poland and also supplies a range of items to bowling alleys throughout the country. Following the dismissal of Zatorski, at least four of the seven employees in AMF's Poland branch resigned.
However, one of these employees who originally resigned has agreed to stay with AMF, according to Bent Petersen, executive vice president of AMF in Europe. Another employee is possibly reconsidering her resignation. AMF Poland's three-member installation crew will also remain with the company.
When asked why the company had decided to dismiss Zatorski instead of lower-level employees if it was cutting back, Spangenberg responded, "Usually if something doesn't work out you start from the top." He would not comment on what specifically did not work out with Zatorski.
"Maybe he's just too big of a spender" at times when he needed to keep expenses down, said Petersen, in explaining the dismissal.
Zatorski's dismissal is part of a global belt-tightening for AMF. During September, the company laid off about 15 employees in Europe and 100 employees in Asia, according to Spangenberg. The company has been hit globally by a cancellation of expected projects and a drop in sales of bowling equipment to new investors, he added.
The Polish office will now be led by Petersen, who will oversee both AMF's Russian and Polish businesses from the Warsaw office until he retires in January. It is "conceivable" that someone will replace Petersen in January, Spangenberg said.
"I'm absolutely bullish on this market, we're going to be committed to this market, and we're going to go full speed forward," Petersen said.
One of AMF's largest deals in Poland is an approximately $9 million contract signed with Atomic Entertainment to install about 200 bowling lanes.
Atomic changes too
At the same time, Atomic is tinkering with its bowling center plans in Poland, but with far less drastic changes. Atomic, a leisure company, had originally planned to secure up to 20 sites in 1998 for bowling centers around Poland. But the company said last week that it will now lease space for bowling centers from existing or planned retail centers.
Atomic has leased space in Wroclaw from Apsys, a retail developer that started construction in September of a complex containing shops, a food court and leisure center.
Atomic decided to abandon a greenfield approach to bowling centers because of the costs associated with such a strategy, said Marc Bushala, the company's president.
"It's not difficult to find sites, but it is hard to get them cheaply, so in a lot of cities where we were looking for greenfields it was better to find retail developers," he said.
Romek Lubaczewski, Atomic's operations manager, said that when the company first crafted its strategy last year it did not foresee such problems.
"Prices are crazy," he said. "People usually want to get twice as much as what the realistic price should be."
By going with retail centers, Atomic believes it will have a greater opportunity to secure sites, Bushala said. He added that most Western retail developers understand the importance of the entertainment business and so decide to build leisure centers in shopping complexes throughout Poland.
"For example, Metro is going to build 17 new stores with leisure components included in most of them," Bushala said. "So we shifted our attention to retail schemes."
Bushala also said that working with multiplex operators will give his company increased opportunities to expand quickly.
Bushala said Atomic is eyeing a retail complex in Promenada in Warsaw that is being developed by Ster-Kinekor. The South African multiplex operator has also signed a contract to install cinemas in the Wroclaw retail center in which Atomic plans to be present, according to an official with Ster-Kinekor who did not want to be named.
Although Atomic has ambitious plans for bowling centers, it is not the first on the market with lanes. There are already bowling lanes installed at several hotels around Poland, such as the Golebiewski hotel in Mikolajki and the Amber in Miedzyzdroje.
However, these are small operations and not on the same scale of Western-style bowling centers.
But the first modern bowling center has already been opened, in March 1998, in Poznan by Centrum Rekreacji Niku. The company said that so far the center, which took six months to build, is proving a success.
"We are getting popular, there are up to 1,000 people visiting the center on weekends," said Igor Nowak, marketing manager at Centrum Rekreacji Niku, "And we expect that by the end of this year 1 million visitors will go bowling in Poznan."
The company, which is owned by Polish-Singapore investors, also has plans for expansion in Krakow, Gdansk, Wroclaw, Szczecin, Katowice and Warsaw. Nowak said that all planned bowling centers would have the same standard as the $5 million investment in Poznan. Nowak argued that there is practically no competition, except for Atomic Entertainment, which is planning to build centers in nearly the same cities. But he does not see Atomic as a threat in such an undeveloped market.
"Even if there are more bowling centers to be built by other companies, there's room for them on the Polish market," he said. "There are usually two or more such centers in Western cities."
But Atomic isn't only planning on bowling centers for Poland, it's looking abroad as well. "We accelerated our plans for opening centers outside of Poland (Italy, Hungary, the Czech Republic, Spain, the Netherlands)," Bushala said, "as we've been encouraged by our multiplex operators with whom we cooperate in Poland."
Atomic hopes to realize its investment plans by raising combined debt and equity capital of $50 million.
"We are talking to various Polish and foreign banks for the debt capital and to foreign institutions for the equity capital," Bushala said. "But our total capital requirements will depend upon the ratio of leasing vs. building centers."
Atomic, which has already invested $10 million in Poland and owns clubs and restaurants throughout the country, is planning a bond issue to raise additional capital in the year 2000.
