Blockbuster Eyes Q4 Turnaround29 Nov, 2005 By: Erik Gruenwedel
Calling video rentals a “momentum business,” Blockbuster Inc. CFO Larry Zine today told a group of investors he expects strong November box office results (up 24 percent) would help jumpstart Big Blue's sagging fortunes in the fourth quarter.
During a presentation at the J.P. Morgan Consumer & Retail Holiday Conference in New York, Zine reiterated that 2005 “has been a very tough year for us,” and that the Dallas-based retailer was undertaking steps designed to increase revenues and reduce capital expenditures to about $90 million in 2006.
He said the company is evaluating underperforming “non-core assets,” including possibly selling foreign properties Xtravision and GameStation with 200 stores each. In the U.S., Blockbuster is considering selling properties Movie Trading Co., Movie Brands, Rhino Games and GameRush, among others.
“As a matter of focus and a matter of cost reduction … we are looking to maximize our profitability and in some cases maximizing the profitability would be to eliminate them or severely prune them back,” Zine said.