Blockbuster to Shutter Another 100 Stores6 Aug, 2013 By: Erik Gruenwedel
Parent Dish Network vows to maintain operations of rental icon on a break-even basis. Blockbuster to operate 350 domestic stores by the end of October
Blockbuster LLC Aug. 6 said it plans to shutter 100 domestic stores during the current third quarter, leaving it with 350 locations in operation.
At its peak in 2004, Blockbuster operated 9,000 stores in 17 countries and employed 60,000 people.
In a regulatory filing, Blockbuster parent Dish Network said it continues to evaluate the impact of certain factors, including, among other things, competitive pressures, the ability of significantly fewer Blockbuster domestic retail stores to continue to support corporate administrative costs, and other issues impacting the store-level financial performance of the stores.
In Dish’s fiscal call, company executives reiterated support for Blockbuster, saying there was no time frame or store count that would trigger shuttering the entire brand.
Dish CFO Robert Olson said Blockbuster is a seasonal business, with typically stronger first and fourth quarters. He said existing stores would be evaluated individually going forward.
“We think of Blockbuster operating on a break-even basis,” Olson said.
Indeed, the Englewood, Colo.-based chain reported a second-quarter (ended June 30) operating loss of $5 million, compared with an operating loss of $13.3 million during the previous-year period.
By comparison, Dish said it spent $18 million on legal and related fees associated with its unsuccessful acquisition of Sprint Nextel.
Blockbuster generated revenue of $120.6 million, down from revenue of $253.3 million last year.
The decrease in revenue for the quarter was primarily related to the deconsolidation of Blockbuster U.K. on Jan. 16, and Blockbuster domestic store closings during 2013 and 2012.
Blockbuster U.K. filed for the British equivalent of bankruptcy late last year, with its assets liquidated in the first quarter.