Blockbuster to Sell Australian Operations22 Feb, 2007 By: Erik Gruenwedel
Blockbuster Inc. Feb. 22 announced it had entered into agreement to sell its 29 company-owned Australian stores and master franchise rights to 341 licensed locations.
Financial terms of the deal with Video Ezy, an Australian-based franchisor of 518 stores, were not disclosed.
Video Ezy would continue to operate Blockbuster corporate stores under the Blockbuster logo with franchisees doing likewise.
The deal follows similar international sell-offs by Big Blue as the Dallas-based movie rental company continues to streamlines overhead costs and focus efforts on domestic operations, including Blockbuster Online.
Last December, Blockbuster sold its Taiwan subsidiary and master franchise license, to Webs-TV, and in January the company sold its 72-store, U.S.-based Rhino Video Game chain to GameStop Corp.
Most recently, in conjunction with the Blockbuster Brazilian franchisee's sale of its stores to Lojas Americanas, the company signed a 20-year licensing agreement with Lojas, giving the Brazilian retailer rights to the Blockbuster brand for the rental and retail of video products.
Blockbuster, which operates and franchises more than 8,000 stores globally, doesn't report revenues from individual countries and a spokesperson wouldn't discuss the Australian segment's impact on overall revenues.
In a 2005 10K regulatory filing, 32.5% of Blockbuster's worldwide revenues were generated outside the United States. That is compared to 30.5% of global revenues generated outside the United States in 2004.
“We have some valuable international and non-Blockbuster-branded assets, and we are exploring our options for these assets in support of our goal to grow our share of the domestic rental market through our stores, online rental, and eventually through digital downloading,” said John Antioco, Blockbuster chairman and CEO. “We want to be able to invest in our North American business even as we strive to continue strengthening our balance sheet and creating shareholder value.”