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UPDATE: Home Video Execs Struggle to Assess Damage in Hurricane Katrina's Wake

1 Sep, 2005 By: Kurt Indvik

Lack of communications services continued to make it difficult to gauge the extent of damage from Hurricane Katrina to home video retailers along the Gulf Coast and inland in the hardest-hit states of Louisiana, Mississippi and Alabama, said executives from the major chains, the VSDA and buying groups contacted by Home Media Retailing.

Meanwhile, Movie Gallery and Wal-Mart announced relief efforts and donations for victims of the hurricane.

About 57 Blockbuster stores have been closed as a result of the hurricane, said spokesman Randy Hargrove, with some eight franchise operations also shut down.

“We are still evaluating the extent of damage caused by Hurricane Katrina,” he said late yesterday. Hargrove said he was not aware of any employee injuries or to what extent the stores have been damaged. “Over the course of the next several days, we expect to learn more. We're still trying to monitor the situation in very difficult circumstances.”

“Of course, we have some stores impacted,” said Tom Johnson, SVP, corporate finance and business development, at Movie Gallery Inc. “Hard to tell right now how many or to what extent, given the limited communications.” The Dothan, Ala.-based chain, including both Movie Gallery and Hollywood Video, has more than 300 stores in the three hardest-hit states.

Movie Gallery today announced a $100,000 donation to the American Red Cross to support disaster relief in the wake of Hurricane Katrina. The chain said it would organize a donation program through its 4,700 Movie Gallery, Hollywood Video and VHQ Entertainment stores in North America. Customers can donate funds to the Red Cross Disaster Relief Fund at these stores through Sept. 30.

“We have numerous customers, associates and partners that live and work in the affected areas, and we want to do our part in supporting the relief efforts,” said Joe Malugen, Movie Gallery's chairman, president and CEO.

Wal-Mart, the nation's biggest home video retailer, reported that more than 40,000 of its employees have been affected by the hurricane, and at least 50 facilities have sustained some sort of damage.

The chain has contributed $1 million in cash each to the Red Cross and Salvation Army for immediate disaster relief aid. The retailer is sending 10 truckloads of water, batteries and emergency medical kits to Baton Rouge, La., where many relief efforts are being managed. Wal-Mart also is accepting donations on behalf of the Red Cross and Salvation Army at its 3,800 Wal-Mart and Sam's Club stores as well as on its related store Web sites.

The Independent Dealers of Entertainment Association (iDEA), the indie retailer arm of the Video Software Dealers Association, has more than 140 member stores in the Texas/Gulf Coast and Southern Central chapters, with several significant Blockbuster franchise operations in the areas, but spokesperson Andrew Mun said attempts to reach chapter presidents in these areas have not been successful as of early today.

“We know we've got big problems,” said Ted Engen, president of the Video Buyers Group, who said Tuesday he figured Katrina might have hit as many as 100 members' stores hard. “We've had someone on the phone this morning trying to reach anyone down there, but right now we can't get a hold of anybody.”

Additional reporting by Holly J. Wagner.

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