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From the current print issue of NHBR
NHBR Article
Movie Gallery to shut five N.H. stores
Monday, February 8, 2010
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Wilsonville, Ore.-based Movie Gallery Inc. – second-largest North American video and game rental company -- has filed for voluntary bankruptcy and is expected to shutter 760 stores nationwide, including several in New Hampshire.
According to the company’s Web site, four Movie Gallery stores and one Hollywood Video location in New Hampshire were slated to be closed:
• Movie Gallery, 196 Loudon Rd., Concord
• Movie Gallery, 217 Fisherville Rd., Penacook
• Movie Gallery, 553 Mast Rd., Goffstown
• Movie Gallery, 903 Hanover St., Manchester
• Hollywood Video, 258 Indian Brook Dr., Somersworth
Movie Gallery locations in Tilton, Newport and Jaffrey were not identified on the Web site as stores that would be closing.
Movie Gallery filed for Chapter 11 reorganization on Feb. 2 in U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division.
Movie Gallery reportedly posted $1.4 billion in revenues for 2009, down from $2 billion in 2008. It employed 19,082 people, and has $600 million in debt, largely stemming from the $800 million acquisition in 2005 of Hollywood Entertainment Corp, operator of he Hollywood Video chain.
In a press release regarding the Chapter 11 filing, the company blamed the economy and competition for its financial woes.
“Over the past two years, Movie Gallery took a number of steps to respond to its business challenges and position the company for future success, including closing several hundred underperforming stores across the country; however, these actions were not sufficient,” said the company. “After consideration of all available alternatives, the company determined that a Chapter 11 filing was the appropriate next step in its ongoing restructuring.”
The firm said its goal is “to emerge from the restructuring process with a new and sustainable business model centered on a smaller base of profitable stores.”
It also left the door open for the possibility of closing more than the announced 760 of its 2,600 U.S. stores.
“The company anticipates closing additional stores during the Chapter 11 process,” said company officials.
Movie Gallery has had financial troubles for several years, and had previously filed for Chapter 11 on October 17, 2007. It emerged from that bankruptcy in May 2008. – CINDY KIBBE/NEW HAMPSHIRE BUSINESS REVIEW
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