Gallery to Shutter Additional 400 Stores4 Feb, 2008 By: Erik Gruenwedel
Bankrupt Movie Gallery Inc. Feb. 4 said it will close 400 underperforming Gallery and Hollywood Video stores as part of a second round of property downsizing.
The Dothan, Ala.-based No. 2 DVD rental service last September announced the closure of 520 stores during phase one restructuring.
The new round of closures, which include 222 Hollywood and 178 Gallery stores, will reduce Gallery's retail footprint to about 3,550 stores.
Last month, Gallery filed a motion with U.S. Bankruptcy Court in Richmond, Va., seeking authorization for funds of about $1 million to compensate employees, store and district managers during going-out-of-business sales.
Great American Group, the Woodland Hills, Calif.-based outside professional services company that oversaw similar efforts for defunct Tower Records and Video, will spearhead the liquidation sales, which are expected to last from three to seven weeks.
Joe Malugen, chairman, president and CEO of Gallery, said the additional closures will help expedite the company's planned exit from bankruptcy protection in the second quarter.
“The decision to close stores is always difficult, but we are confident that we are taking the right steps to emerge from bankruptcy as a stronger company, better positioned for long-term success,” Malugen said. “We have made significant progress in restructuring Gallery, and this action will allow us to further focus our resources on those stores with the strongest operating performance and best prospects for future growth.”