The nation's second-largest video store chain has retreated back into bankruptcy proceedings with a plan to close 805 more stores.
Movie Gallery Inc., which also operates Hollywood Video stores, is closing nine of its 16 remaining stores in Central Florida. That includes all Tampa Bay area stores except for a Hollywood Video at 13184 U.S. 301 S in Riverview, which will remain open. No closing date was set, but the liquidation sale starts today. The company said it intends to honor outstanding gift cards.
The Wilsonville, Ore., company, which emerged from a 2007 bankruptcy eight months ago, on Wednesday filed for Chapter 11 protection from creditors, this time in Richmond, Va. The company cautioned there will be more store closings after the first batch as the company uses the courts to restructure its finances.
From a peak of more than 4,600 stores nationally in 2005, the collection of Movie Gallery, Hollywood Video and Game Crazy locations left will total about 1,900.
Video stores were a ubiquitous part of the retail landscape only a decade ago. But in the past few years they have been fighting to survive new competition from mail-order DVD rental services like Netflix and $1-a-night kiosks maintained in supermarkets and discount stores by RedBox or Blockbuster Video.
Movie Gallery reported a $129 million operating loss in the fourth quarter after watching its sales plunge to $1.4 billion in 2009, down from $2 billion in 2008. The company, which paid $1.2 billion for Hollywood Video in 2005, is controlled by Sopris Capital and Aspen Advisors which were creditors in the earlier bankruptcy.
Staff Writer Mark Albright can be reached at email@example.com or (727) 893-8252.