ThisisBigBrother.com - UK TV Forums

Quote:

Blockbuster is to close the last of its 300 stores in the US and axe its mail DVD operations in the country.

The film rental company's brand and "significant video library" will be retained by owner Dish, which will now focus on streaming service Blockbuster On Demand.

Joseph P Clayton, Dish president and chief executive, said: "This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment.

"Despite our closing of the physical distribution elements of the business, we continue to see value in the Blockbuster brand, and we expect to leverage that brand as we continue to expand our digital offerings."

It comes just over a week after the film rental company called in administrators for the second time this year in the UK, putting more than 2,000 jobs and 264 stores at risk.

Private equity group, Gordon Brothers Europe, which bought the remnants of Blockbuster in March, said that a turnaround plan for the company had failed.

The administration is a new setback for the high street following a string of administrations earlier in the year, which included HMV, Jessops and Blockbuster.

Blockbuster initially collapsed in January with 528 stores and 4,190 staff as it struggled to compete with online rivals such as Netflix. Many of the former Blockbuster stores are now convenience stores, with Morrisons buying 48.

Gordon Brothers said they had “striven to turnaround the historically loss-making company” and had invested “significantly” in strategic marketing activities.

However, Gordon Brothers were unable to strike a licensing deal with Blockbuster’s parent company in the US to start a digital business, and also struggled to agree new rental deals with landlords on its stores.

The investment group warned that its strategy has coincided with “a period of poor trading performance across both rental and retail sales” and it has been forced to file a notice of intention to appoint an administrator.

Frank Morton, chief executive of Gordon Brothers Europe, said: “Since the acquisition we have worked extremely hard to reignite the Blockbuster brand, make our investment work and put the business on a viable footing.

“Despite our best efforts, we regret that we are now forced to make some redundancies and would like to thank any affected employees for their support during the last six months.”

Gordon Brothers said 32 jobs will be cut at Blockbuster’s UK head office immediately and a search will begin for a buyer for the business or its assets. Blockbuster stores will remain open while a buyer is sought.

Barry Gross, real estate partner at law firm Berwin Leighton Paisner, said: “Blockbuster's owners sought to reduce their costs by renegotiating leases with landlords.

"However landlords have begun to take the view that they may be better served allowing failing business models to fall by the wayside and to increase take-up by alternative models.

"Further the BPF's (British Property Foundation) call to arms to landlords to stand-up against pre-packs will also continue to impact the ability with which high street outlets can restructure."

Was obviously inevitable with Netflix and Lovefilm and many others, but this is sad nonetheless.