Irish Video Chain Xtra-vision Liquidating27 Jan, 2016 By: Erik Gruenwedel
Netflix and Amazon Prime Video’s global expanse has claimed another retail victim. Irish video rental chain Xtra-vision has petitioned a court to liquidate operations at 80 stores — a move that will likely see 580 employees lose their jobs.
Xtra-vision Entertainment Ltd., which is owned by Hilco Capital in the United Kingdom, sought Grant Thornton International, a Chicago-based corporate consultant, to oversee liquidation efforts after reportedly claiming to be insolvent due to a rapidly eroding disc rental market and poor Christmas sales.
An Xtra-vision representative told media outlets it would honor existing rental vouchers, but that the liquidation would only save a few jobs. Last November, the chain began shuttering stores with leases set to expire Feb. 1.
“Reflecting the changing dynamic in consumer behavior … Xtra-vision is condensing its store portfolio to a smaller number of focused retail locations,” parent Hilco Capital said in a statement at the time.
Ireland’s largest video rental chain with 186 stores was sold by Blockbuster in 2009 to Irish-based Birchhall Investments Ltd. for about $45 million in cash. Hilco Capital, which owns British entertainment retailer HMV, bought Xtra-vision out of bankruptcy in 2013 for $8.7 million.
Netflix entered Ireland and the U.K. in 2012, and ended 2015 with nearly 5 million subscribers, according to eMarketer.com. That tops the previous top foreign territory, Canada, which has about 4 million subs. Netflix has 330,000 subs in Ireland.
A year ago Netflix claimed it could become profitable globally by 2017. It lost $109 million in foreign operations through Dec. 31, 2015, and expects to lose $114 million in Q1.