Hastings Widens Quarterly Loss21 Nov, 2011 By: Erik Gruenwedel
Lone bright spot: increased rentals of Blu-ray Disc titles
Hastings Entertainment Nov. 21 reported a third-quarter (ended Oct. 31) net loss of $5.5 million, up 77% from a net loss of $3.1 million during the previous-year period. Through the first nine months of the year, Hastings’ net loss has mushroomed 338% to $9.2 million compared to a loss of $2.1 million in the previous year.
Total revenue declined 3.3% to $108 million compared to $112 million last year.
Amarillo, Texas-based Hastings, which operates 143 entertainment-niche superstores throughout the Southwest, cited the ongoing economic malaise and changes in home entertainment consumption for the decline.
“We continue to be impacted by the shift toward the digital delivery of books, along with the increasing growth of rental kiosks and subscription-based services in movie rentals,” CEO John Marmaduke said in a statement.
Marmaduke said rentals of Blu-ray Disc movies increased an undisclosed amount, underscoring continued momentum among consumers in the consumption of high-definition packaged media.
Hastings saw same-store rental comps drop nearly 12% as revenue of movies and TV DVDs declined 10.4% to $15. 8 million compared to $17.6 million last year. Rental video game comps decreased 5.1% for the quarter, and units rented decreased 8.4%.
Borrowing a page from Trans World Entertainment’s Second Spin buy, trade, sell business model, Hastings in August opened TradeSmart, a 40,000-square-foot store in Littleton, Colo., that features predominantly used DVD and Blu-ray Disc movies, music CDs, video games, in addition to consumer electronics, trends, skateboards and paintball.
The retailer also is working on an initiative to begin selling electronic books through its website, www.GoHastings.com. In addition, it has begun selling the Nextbook Premium 7 tablet computer, which allows users to read electronic books, surf the Web, view email, listen to MP3s and watch movies.