By : Erik Gruenwedel | Posted: 14 Dec 2009
Movie Gallery has hired a financial advisor to help the parent of Hollywood Video plot a course through fiscal challenges brought on by recession and a challenged packaged media business, according to FinancialTimes.com.
Wilsonville, Ore.-based Gallery hired New York-based Moelis & Co. to help it deal with vendors and landlords, according to Debtwire.com, an online finance newsletter owned by FT.com.
The chain, which emerged from Chapter 11 bankruptcy May 20, 2008, and is owned by private investors, reportedly is operating under a 30-day grace period with lenders after failing to file required financial reports with auditors.
Gallery in October set up a toll-free hotline for landlords as online reports suggested the Wilsonville, Ore.-based No. 2 DVD rental service had escalated store closures, some with little advance notice to store managers, staff and customers.
In a statement, Gallery said at the time the closures were the result of operating in an “unprecedented consumer/retail environment.”
Gallery reportedly has a $100 million senior secured revolver loan due 2011, a $600 million term loan, $117 million second lien facility due 2012, and a $26 million letter of credit.
Movie Gallery in September said it would close 200 underperforming Gallery, in-store Game Crazy and Hollywood Video locations by the end of the year — bringing the total number of shuttered stores in 2009 by the No. 2 DVD rental chain to more than 400.
Gallery operates more than 2,000 stores, including about 680 Game Crazy locations.
Representatives from Gallery and Moelis were not immediately available for comment.