By : Erik Gruenwedel | Posted: 15 Mar 2010
Blockbuster Inc. has reportedly put its European operations on the sales block, including 650 stores in the United Kingdom, in an effort to cut costs.
Dallas-based Blockbuster has hired Winchester Capital to locate a buyer for the reported $96 million price tag, which includes Blockbuster locations in Denmark, Italy and Ireland, according to a report in the Sunday Times.
Faced with burgeoning ($850 million) debt inherited from its jettison by former parent Viacom in 2004 and competition from Netflix and Redbox rental kiosks, Blockbuster has made no secret of its desire to streamline its European businesses and focus on domestic operations, including a multiplatform channel strategy that includes digital, by-mail and kiosks.
The chain last summer sold Xtra-vision Limited, a 186-store entertainment retailer in Ireland, for $45 million.
CEO Jim Keyes in recent financial calls has said he would like to license the Blockbuster brand for its existing and future digital operations in Europe.
Indeed, the company is rolling out 10,000 rental kiosks in the United States through a license deal with NCR Corp.
Blockbuster spokesperson Michelle Metzger would not comment directly on the report, but said ongoing downsizing of European assets has been in the works since last summer.
“We’ve have been pretty public about the divestiture of international assets,” Metzger said. “These are valuable assets generating over $1 billion in revenue for us last year.”
She said the downsizing is “moving along,” but reiterated that there was nothing definitive to disclose.
Regardless, investors applauded the news, sending Blockbuster shares up nearly 5% in midday trading.