Hollywood Won't Change VHS Rental Depreciation Policy to Follow Blockbuster17 Sep, 2001 By: Hive News
Hollywood Entertainment Corp., owner of the 1,800-store Hollywood Video chain, said in a Monday press release that "it does not plan to change its depreciation policy nor does it plan any charges related to its rental inventory."
James Marcum, executive v.p. and c.f.o., said, "As a result of Blockbuster's recent announcement regarding a change in the depreciationpolicy of their VHS rental inventory, many of our shareholders have incorrectly speculated that a write down of our VHS inventory is forthcoming.
"I want to remind our investors that, as a result of the forecasted migration from VHS rentals to DVD, the company accelerated the depreciation of its VHS rental inventory in the fourth quarter of 2000 and took a charge at that time. The company depreciates its VHS cassettes over a one-year period to a salvage value of $2 per cassette."
Commenting on the Portland, Oregon-based chain's third-quarter performance, c.e.o. Mark Wattles stated, "Our business continues to perform well in the third quarter. Positive trends that began in the second quarter have continued through the current week. We are confident that we will meet or exceed our previously announced forecast of 4%-5% same-store sales increase for the thirdquarter."