By : Erik Gruenwedel | Posted: 30 Jun 2010
May was a bad month for now-defunct Movie Gallery.
The two-time bankrupt movie rental chain and subsidiary Hollywood Video reported a net loss of more than $100 million during the four-week period from May 10 to June 6, according to a U.S. Bankruptcy Court filing.
Gallery, which started the month of May undermined by news it would cease operations and begin liquidation, generated $57.2 million in revenue (36.2% margin) from the rental and sales of DVD/Blu-ray Disc movies and video games.
The chain generated rental and sellthrough margins of 42.5% and 9%, respectively, underscoring the sustained value of packaged media and why independent video stores are scrambling to fill the void left by departing Gallery/Hollywood Video locations.
The results also exposed the Achilles heel of brick-and-mortar operations: Store operating expenses topped $78.7 million. Overall operating expenses exceeded $82.6 million.
Since filing for bankruptcy a second time Feb. 3, Gallery reported a net loss of $170.7 million on revenue of nearly $344 million. A constant throughout the company’s last months was more than $985 million in liabilities and debt — the majority accrued when Gallery acquired Hollywood Video for $1.2 billion in 2005.
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