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Friday, 18 September 2009 06:50

960 Blockbuster stores to be closed

Written by David Stellmack

Image

The store front rental business is a changing

Blockbuster has announced that it will close 960 retail stores before the end of 2010. Between 280 and 300 units will be closed before the end of this year.

In case you have not been paying attention, Blockbuster has been having a difficult time over the last couple of years; and while the company has about 7,000 stores worldwide, a good number of those stores are just no longer profitable.

Blockbuster, like many of the traditional store front rental retailers, has been watching its business evaporate as many customers have selected other ways to get their movie and video game rentals. While Blockbuster still has the most recognizable name in the rental business, it has been hit on a number of fronts, including in-home mail delivery from companies such as Netflix and Gamefly, and from dollar per day kiosk rentals for movies and video games. On top of this, there is the pay-per-view and on demand content, which is also starting to make a dent in the company’s business model.

While Blockbuster has tried to move beyond just offering store front movie rentals by getting into the mail order delivery business, as well as the on demand content business, the company thus far has not met with much success on these fronts. The company has recently announced that it will also be attempting to leverage its brand in the kiosk movie rental space because it sees a significant growth possibility in this space using the Blockbuster brand.

With all of the changes in the rental sector, it is hard to know if closing 960 stores will be enough. While it might stop the bleeding in the short term, we suspect that these closings will not be the last; and more may be coming in the future as the rental business continues to evolve over the next year or two.

Last modified on Friday, 18 September 2009 10:34

David Stellmack

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