Log in

Analyst: Gallery Store Closures Puts $200M Rental Revenue Up for Grabs

15 Jan, 2010 By: Erik Gruenwedel

movie gallery

Movie Gallery’s reported plan to shutter 1,000 underperforming stores, including Hollywood Video locations, could make $200 million in annual rental revenue available to competitors such as rental kiosks, Netflix and Blockbuster, according to Merriman Curhan Ford analyst Eric Wold.

The Wall Street Journal Jan. 14 reported that Wilsonville, Ore.-based Gallery was working with financial advisors to eliminate 37% of its 2,700 stores as it grapples with $600 million in debt and an evolving DVD/Blu-ray Disc rental market.

“Obviously, when a location closes, those customers that previously frequented that location are not going to stop renting DVDs completely — they will have to find a new source of DVD rentals,” Wold wrote in a note.

The analyst said consumers would likely gravitate toward Redbox kiosks and Netflix, the latter most likely to deliver movie rentals within 24 hours.

Wold, of course, covers Redbox and Netflix.


Add Comment