For several months, Cirque du Soleil had to stop its 44 shows around the world, the most critical period in its history.
“We had nights shorter than the others,” admits the big boss Daniel Lamarre, in an interview with The newspaper from his home in Florida.
“We went from 1 billion to zero income. I could not believe it. It was sad and worrying. But I kept my optimism and I told myself that the brand was so strong that we were going to find people who would ensure its relaunch, ”says Mr. Lamarre.
During this downtime imposed by the pandemic, Cirque du Soleil was bought by a group of investment firms, including Catalyst Capital, a controversial Toronto fund.
“We had zero income and a company was ready to relaunch us. What does it mean ? It means that the Cirque has a strong brand. Investors were confident that people would come back to see our shows, ”says Lamarre.
“We don’t realize how well known the Circus is in the world. The credibility of the brand is as strong as Google or Apple. And my pride is that the name of Cirque du Soleil has remained in French, ”he continues.
In Quebec for a long time
But with the arrival of Catalyst, Cirque du Soleil no longer has shareholders or directors from Quebec. The investors have committed to maintain the head office in Montreal for five years. But after ?
“The majority of our employees are here in Quebec. There is one thing that makes me smile a little every time we question the head office. The truth is, it has never been questioned by investors, ”says Mr. Lamarre.
According to him, the shareholders are not going to move the head office for purely economic reasons.
“The head office that is there is an infrastructure that is worth several million dollars. You, tomorrow morning, if you buy the Cirque, you do not want to get rid of this infrastructure to go and rebuild elsewhere. It would cost more! Also, the Canadian dollar is even weaker than the American or European currency, so it’s an advantage to have the seat here, ”he says.
Employees recalled
Several months later, the Circus now has four shows in Las Vegas (Mystery, O, Love and Michael jackson one) and relaunch K next November. Then, Drawn to Life, his collaboration with Disney, will be showing in Orlando on November 18 and Kooza, in Punta Cana.
“We have close to 1000 employees who have returned to work and each time we reopen a show, 200 more employees return. So by the end of the year, we will have nearly 2,000 employees who will have found their jobs, ”anticipates Mr. Lamarre.
“What I notice is that we follow the vaccine, we go to countries where the distribution of vaccines is very important,” he concludes.
Will shareholder number 1 be patient enough?
The main shareholder of Cirque du Soleil is Catalyst Capital, a vulture fund that buys companies in difficulty only to sell them a few years later at a profit. Its goal is therefore to see the group founded by Guy Laliberté find its way back to profitability as quickly as possible.
“This type of investment fund, when it enters the capital of a company, do not kid ourselves, it enters already thinking about its exit. So, if we decided to take a stake in the capital, it was because we saw potential, ”says Yan Cimon, professor of strategy and management at Laval University.
“If we look at the Private equity, investment horizons can be as short as three years. It depends on patience and tolerance, but it’s clear that Catalyst’s horizon is not infinite, ”he continues.
The boss of the Circus, Daniel Lamarre, however, affirms that the main shareholder has not put pressure for the group to relaunch its shows. “No, on the contrary, they are the ones who asked us to be patient. They didn’t want us to take too many risks, ”says Lamarre.
Millions of dollars for the stimulus
When Cirque bought, the group of creditors who bought it – including Catalyst – reduced Cirque’s debt by $ 900 million and injected $ 375 million into the company.
To find the path to profitability, the Cirque will therefore use this money mainly to find theaters all over the world.
“We are managing very carefully. It is certain that we will ensure that all the money made available to us by the shareholders will be reinjected for the relaunch of shows, ”says Mr. Lamarre.
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