UPDATE: Video Hut Sells to Blockbuster5 Nov, 2004 By: Kurt Indvik
Industry veteran Tom Warren has sold his 11-store Video Hut chain in Fayetteville, N.C., to Blockbuster Inc. The deal was finalized in mid October. No terms were made available.
Video Hut will continue to operate under its own name, as part of Blockbuster's Movie Brands subsidiary, according to spokesman Randy Hargrove. With the acquisition of Video Hut, Movie Brands now operates 107 stores with Video Hut in North Carolina, Video King in New York State, and Mr. Movies in a number of Midwestern states.
Warren, 58, said he felt it was time for him to leave the day-to-day retail business he began in 1983, but he's not retiring, by any means. “I am always looking for other opportunities, and right now am involved with some consulting work with clients that have software and hardware products associated with the packaged goods business who are looking to break into the video market,” Warren said. He is also testing an online video retail and subscription rental business in regions outside of the Fayetteville area where he is restricted by a non-compete clause, but declined to offer specifics.
Warren launched Video Hut in Houston in 1983, then sold the stores in 1986 (but not the name) and moved to the Fayetteville area, where he and his wife Mary were both from, and started up Video Hut again. The chain was ranked No. 24 in Video Store Magazine's Top 100 for 2003, with estimated revenue of $4.8 million. Warren has been active in the Video Software Dealers Association for many years, and served as chairman of the association's board of directors for four terms. He is currently vice chairman and said he plans to continue to be active with the association.
Hargrove said that while Blockbuster has fueled much of its store growth with new store openings, “acquisitions like this remain an option for us.” Such acquisitions, he said, often make sense to operate under their current name within the Movie Brands subsidiary. “You have an existing brand with an established and loyal customer base. In these cases, we have made the decision to keep the stores operating under the same name and pretty much the way they have operated in the past.”
In the case of Video Hut, that means the chain will continue to offer adult product, even though Blockbuster stores do not. Besides allowing Blockbuster revenue opportunities in markets where there are already established chains, “It helps us keep a pulse on the independent retail environment, too,” Hargrove said.