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Blockbuster to shutter up to 960 stores

submitted on September 16, 2009 by chinnam in "Member's Lounge"
A Securities and Exchange Commission filing has revealed Blockbuster's plans to close up to 960 retail store locations by the end of 2010 as it attempts to makes its operation more financially stable.

According to the company's filing, it plans to close all unprofitable stores, while refocusing its efforts "to improve four-wall profitability." To do so, the company first analyzed its over 7,000 stores to determine if they were profitable or not. A whopping 18 percent of Blockbuster's stores are unprofitable. The remaining stores are profitable.

Prior to making the decision to close some of its unprofitable locations, Blockbuster planned to close 280 to 300 stores as part of a grouping it calls, "normal closures." Stores added to the "accelerated closures" category will also be closed by the end of this year. According to Blockbuster, the number of accelerated closures will equal 300 to 385 locations.

Next year will be a slightly less active year for store closures. Blockbuster indicated in its SEC filing that 2010 will bring 100 to 125 normal closures and 130 to 150 accelerated closures. By the end of 2010, it expects to have closed 810 to 960 retail locations.

As troubling as that might sound, Blockbuster spokesperson Randy Hargrove said in a phone conversation that a certain amount of measured skepticism should be exercised. According to Hargrove, these figures are not guaranteed.

"All these stores are candidate stores," Hargrove said. "Although we may in fact close that many stores, if we can renegotiate leases or remodel stores to make them more profitable, that number might go down."

But Blockbuster's closure story doesn't quite end there. Further down in the filing, Blockbuster indicated that 275 to 300 stores are subject to the company's "lease mitigation/termination efforts." Another 250 to 300 stores might be converted into outlets. If successful, that would bring Blockbuster's grand total of rental store closures to 1,335 to 1,560, or up to about 22 percent of all the stores currently in operation.

Of course, there's a financial side to Blockbuster closing so many stores. The company claims that if it's successful in closing up to 960 locations, it can increase its earnings before interest, taxes, depreciation, and amortization (EBITDA) by $50 million to $60 million.............

  • 38279
    Posted by mcgirl4 on September 16, 2009
    [reply] 1 0
    I guess this doesn't surprise me..... A lot of people either download movies or are part of Netflix and Blockbuster's mailing program
  • 38283
    Posted by HouTex on September 16, 2009 [reply] 0 0
    You know, I wondered if RedBox adding video rentals would impact Blockbuster, although this reorganization was already in the works before that announcement. How many people do you think are buying movies and streaming them rather than renting?
  • 38284
    Posted by HouTex on September 16, 2009 [reply] 0 0
    I meant to say video game rentals
  • 38293
    Posted by YanBz on September 16, 2009 [reply] 0 0
    How long before bankruptcy? Does anyone want to bet?
    • llocomotive
      Posted by llocomotive on September 16, 2009 [reply] 0 0
      bankruptcy? Were they not rumored to buy Circuit City?

      Well it does seem possible , especially with Netflix and Redbox satisfying out movie needs Wink .

      And with online streaming on it's way (HDTVs with built in streaming) -- going to a store just is too much work.
  • 38312
    3 1
    Posted by emma123 on September 16, 2009 [reply] 0 0
    I will pick Netflix no need to go to store and i can watch 5-6 movies in a week without going to store.
  • 38315
    Posted by HouTex on September 16, 2009 [reply] 0 0
    I guess this book is gonna be worth a lot less, I see one seller is offering a copy for $0.58.

    The Making of a Blockbuster: How Wayne Huizenga Built a Sports and Entertainment Empire from Trash, Grit, and Videotape (Hardcover)
  • 38319
    Posted by phunkeey on September 16, 2009 [reply] 0 0
    They deserve to go down for ripping customers off for years in the form of "extended viewing fees" aka late fines.
  • 38320
    1 1 1
    Posted by MrCheap on September 16, 2009 [reply] 0 0
    Go down in flames! Twisted

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