Blockbuster to Shutter 282 Stores28 Jun, 2007 By: Erik Gruenwedel
Blockbuster Inc. said it would close 282 company-owned stores in 2007.
The Dallas-based video rental giant made the announcement June 28 during a presentation to its lenders.
The company said first-half 2007 in-store rentals fell 13.1%, compared to previous projections of a 7.5% decline.
Blockbuster expects a 15.7% drop in second quarter (ended July 31) domestic revenue, followed by projected increases of 18.9% and 15.9% in the third and fourth quarters, respectively, due to a more favorable release slate.
Citing internal research, Blockbuster said it expects 60% of future Total Access subscribers to utilize both online and in-store locations, compared to 23% online only and 17% in store only.
It expects 4 million Total Access subscribers by the end of the year.
The company said Total Access increased combined same-store and online rental revenues 3.2% in the first quarter, compared to a 4.7% decline for in-store rentals.
Blockbuster projects the total online rental market (including Netflix) to top 11.4 million subscribers this year, 13.4 million in 2008, 14.5 million in 2009 and 15.3 million in 2010.