Blockbuster Bankruptcy Nears With Up to 800 More Store Closures Planned
Blockbuster's long anticipated bankruptcy filing
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is apparently headed down the final stretch and could come by the end of the week, according to a Wall Street Journal
report. One of the cost-cutting moves the video chain is teeing up calls for 500 to 800 additional store closures beyond the nearly 1,000 it previously planned, the article notes.
) apparently is following the well worn path of other brick-and-mortar video rental chains such as Hollywood Video's Movie Gallery parent, which filed for a Chapter 11 bankruptcy not once but twice within a three-year period
. These chains are feeling the squeeze between online distribution services such as Netflix (NFLX
), and low-overhead vending machines such as Coinstar's Redbox.
Last year, Blockbuster said it would close approximately 920 retail stores through the end of this year, but now that figure could nearly double if the chain hits the high end of its target range. The company has been suffocating under $900 million in debt, and the waiver it received from its senior debt holders is due to expire at the end of September, according to the article. The company's senior debt holders, however, plan to to pony up $125 million to keep the lights on while Blockbuster restructures under Chapter 11. Any unused funds from that lifeline will carry over to the company's balance sheet once it emerges from bankruptcy, the article said.