Blockbuster U.K. Shutters 129 Stores19 Jan, 2013 By: Erik Gruenwedel
Blockbuster LLC’s bankrupt operations in the United Kingdom Jan. 19 said it would close 129 stores, including 23 locations in Scotland.
The closures underscore changing consumer habits toward home entertainment, including online rental sources Lovefilm and Netflix. Amazon-owned Lovefilm is the largest by-mail disc rental service in Western Europe. It’s Lovefilm Instant subscription video-on-demand service reportedly has more titles while Netflix’s year-old service in the U.K. and Ireland claims more subscribers.
Blockbuster U.K., which filed for administrative relief Jan. 16 – a form of British bankruptcy – operates 528 stores employing more than 4,000 people. It is a subsidiary of Blockbuster LLC, which is owned by Dish Network.
Lee Manning, who is with Deloitte, the risk management firm overseeing Blockbuster U.K. administrative process, said the closures are a natural result when a company faces significant fiscal challenges.
"Having reviewed the portfolio with management, the store closure plan is an inevitable consequence of having to restructure the company to a profitable core which is capable of being sold,” Manning said in a statement. "We would like to thank the company's employees for their support and professionalism during this difficult time. We are also grateful to the customers for their continued support."
Blockbuster store closings in Scotland leave just 43 locations remaining operational.
Deloitte said an employee helpline has been established in addition to a program assisting terminated employees in finding another job.
Dish, which acquired Blockbuster Inc. out of bankruptcy in 2011, currently has 850 stores operating nationally. The satellite TV operator says it will continue to operate Blockbuster on a breakeven basis as it explores new revenue opportunities, including mobile phones.
Dish reports quarterly financials next month.