Just wanted to make a quick post in follow-up to the one on Wednesday. As of Thursday morning Blockbuster officially filed for chapter 11 bankruptcy protection, looking to wipe out $900 million in debt and find a way out of the hole they ave been digging for themselves for many years.
In the announcement, Blockbuster said that, for now, all of their 3000 stores would remain open. It is believed, however, that this will not be possible and many more stores will close, as previously reported. This will likely come at the hand of Carl Icahn, renowned investor, who owns about 1/3 of all of Blockbuster’s senior debt, which he recently purchased in order to get a controlling interest in the company.
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Can Icahn stage a major a turnaround for the company, or is chapter 11 really the end of this story?
Over the coming days, Shane and I will each put down our thoughts on what we think the Blockbuster’s future might look like. No matter what, it looks to be an interesting story, with at least 1 chapter left in it. I look forward to reading this one all the way to the end.
What about you? Any additional thoughts on what the future holds for Blockbuster?
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[via reuters]
Icahn has met his match (and then some) in Blockbuster. Movie Gallery/Hollywood Video couldn’t make it despite dumping hundreds of under-performing stores and a load of debt through two Chapter 11 filings. While Blockbuster is a minor player in kiosks and on-demand, its brand equity has suffered tremendously due to high rental prices, those wildly unpopular late fees and lackluster customer service at its bricks-and-mortar stores. It’s nearly impossible to turn that kind of impression around. In all likelihood the liquidation value of Blockbuster’s DVD and game inventory is greater than its value as a going concern. Then, maybe, some sucker will pony up some cash to buy the Blockbuster name for another similar venture. But that new venture will be like the new Circuit City, CompUSA, Montgomery Ward, Service Merchandise, or Tower Records – a very faint echo.
I think they are done. Your average person doesn’t go to BB anymore. They are just going to lose more money and fade away
I have to agree with the User comments above, that Blockbuster (“BB”) is finished! They did several things wrong, and I foresaw this years ago!
1. Late Fees – and often, I was charged late fees even when items were returned timely. In fact it happened so many times, I started making them sign it in and give me a receipt on the spot!
2. BB’s -The End of the Late Fees – Yeah, they changed their policy and got rid of late fees, in the sense that after a few days (30?) you’d automatically become the new owner of the DVD, and be charged automatically too. Guess this was OK (better) BUT…
3. The Late Fees at BB (that ended, are back once again)- Yes, that’s right, they changed back once again, now charging late fees – and this confused me, because I wasn’t notified! Oh well, just had to go back to getting a receipt for items I turned in.
4. Requirement of a credit card on file, to rent newer games. This would be OK, if BB had not already lost my faith in handling my information and DVD returns, but they messed those up, so I was cautious to give them a credit card to possibly mis-use.
Good Riddance!
I got an email from BBV stating they were being bought buy NCR?
NCR owns and operates the rental kiosks (the automated machines). They basically pay a fee to use the name. I got that e-mail too and they are just stating the fact that despite the fact they are using the Blockbuster name, they are not really part of the Blockbuster company.
I think there is still a place for Blockbuster stores. I used to enjoy browsing there on weekends, but I haven’t been inside one in about two years. Here’s what I would do:
1. Close redundant stores
2. Focus on rentals, not sales
3. Charge no more than $3/night for new releases and $2/night for catalog titles. If you keep it for 5 days, you pay for 5 days. (And after 30 days, it’s not a new release anymore!)
4. Eliminate most of the crap and accessories they sell. A candy counter is okay, but forget about keyrings, dolls, accessories, satellite dishes, clothing.
5. Clearly state that rentals when rentals are due back and make sure employees check them in when received.
In other words, go back to what they used to do when they started out. They managed to put everyone else out of business, then started doing stupid stuff.
Mr. Icahn, if you are reading this and it works, please send me several million dollars. Thank you.
It’s too late to role back the calendar for Blockbuster. They’ve already spent too much time in the past, not adapting quickly enough to become a viable competitor. Between Netflix & Redbox (who just passed a billion rentals) they are done. Plus the increase in electronic downloads is putting another nail in the brick and mortar coffin. People have moved on, and won’t be going back. Too little, too late!
I thought BBuster was learning a lesson when Netflix 1st arrived…then with stores like Circuit City and CompUSA closing, you’d think it was a clear statement to them that they needed to jump in on the Kiosk movement. Poor business decision to keep 3000 stores open, while Redbox was expanding to 24,000 Kiosk locations. I wish I had the money to buy BBuster 3 years ago, I would’ve converted to Kiosk and sold all remaining video/dvd/game stock.
Now, I believe, it’s too late. Sorry BBuster…