Blockbuster News for Blockbuster: Hollywood Video's Parent Company Files for Bankruptcy
For the second time in a little over two years, Movie Gallery -- the parent company of Hollywood Video, which still has a couple of locations left locally but not for long -- filed for bankruptcy this morning and plans to shutter 805 "poorly performing" stores out of 2,415. It's good news-bad news for Dallas-based Blockbuster: Its stock is up a few pennies this morning to around 45 cents (says The Street, Movie Gallery's store closings could be some small "consolation for investors who have been watching Blockbuster suffer"), but also another sign that videotailers stuck with brick-and-mortars are on the extinction watch list.
In the words of Steve Moore, Movie Gallery's chief restructuring officer, "One of the most significant industry-wide factors affecting the company's performance since the 2007 bankruptcy cases has been the cannibalization of rentals by DVD dispensing kiosks operated by Redbox which offer low priced rentals and convenience."
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