Blockbuster To File Chap. 11…Or Will It?

In a regulatory filing yesterday, Blockbuster Inc. mentioned that it would have to file for bankruptcy if it can’t deal with its $1-billion-plus debt load. Not much of a surprise there.

But CEO James Keyes, in an interview with Bloomberg, discounted that language in the filing, saying it was required by the company’s attorneys. He didn’t deny, however, the company’s annual lost last year of $558.2 million.

Now, the company is trying to work out a different revenue-share program with studios. Blockbuster is also reportedly trying to sell it’s stores in Europe and Canada to raise cash.

It looks like Blockbuster won’t be buying those Movie Gallery assets any time soon.

ALSO: Bon Ton, Macy’s Find a Middle Way to Profit – For Now

5 Responses to “Blockbuster To File Chap. 11…Or Will It?”

  1. 1 Bob Greenfest March 17, 2010 at 7:17 am

    Thought Blockbuster died years ago? Concept has run its useful life. More real estate for retail landlords to deal with.

  2. 2 Tahitijack March 17, 2010 at 9:37 am

    Blockbuster has followed the same path Fotomat took decades ago. They failed to change they way they do business. Fotomat failed to move to the one hour photo business, which would have lead to another shift to digital processing (Shutterfly). Photography is viable but Fotomat is long gone. Blockbuster failed to shift away from shops with limited inventory to on-line unlimited inventroy (Netflix) order and delivery.

    • 3 Rizzo March 17, 2010 at 3:13 pm

      Hard to feel sorry for them. Usually shoved in a mini-mall in urban areas without enough parking – They always had poor service and funny smelling stores that you had to wait in line for a long time while the whole time the atmosphere was one of “we are doing you a favor”. It was great concept, so long as you could hit the store at 2:00 on a Tuesday to get a new release to watch on the weekend.
      At least Fotomat had drive thru’s …

    • 4 Scott R March 17, 2010 at 3:22 pm

      They have changed their business model to include downloads like a Netflix, but alas much too late in the game to be a difference maker. I do have Blockbuster on my blu ray just like I have Netflix but it came out so late that you really don’t need both services other than the Blockbuster model allows the real current movie downloads, which Netflix doesn’t.

  3. 5 JT March 18, 2010 at 11:46 am

    I have never understood why Blockbuster operated it’s store the way it does. Think about Redbox: you look online or at one screen to find the movie you want and then request it and pay for it. Why doesn’t blockbuster work like this? They have a huge store with shelves full of 50 of the same movie over and over again. Why not just have kiosks where people can scan through what they want and then someone grabs it from the back for them? Probably still too little too late, but at least this way they could cut their store sizes in half. This format could offer more selection than Redbox too (more storage), but have the same ease of use. And, you could probably have 1 – 2 people working at the store instead of the 3 – 4 they seem to have. Their retail presence is Blockbuster’s only competitive advantage and they have closed 3 stores around me in a strong Northern Virginia market. Instead of closing them all it would seem they need to reinvent the format have smaller spaces – “Blockbuster Lite” so to speak.

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