Move over, Blockbuster. You’re not the only B&M rental chain being decimated by Redbox, Netflix and VOD. Movie Gallery, the second largest video rental chain in North America, has announced that it may be closing as many as 200 stores by the end of 2009. These closings will be in addition to the 250 Movie Gallery and Hollywood Video (which it owns) locations that the company has already closed this year. In aggregate, the 450 shuttered stores would represent about 14% of the company’s total locations.
Movie Gallery, which just emerged from bankruptcy last year, is apparently struggling to keep up with the leases on at least some of its locations. According to Video Business, the rental chain has set up a “real estate hotline” for its landlords. One landlord consulted by Video Business stated that Movie Gallery was 20 days past-due on rent that was owed to him.
The embattled chain’s Chief Marketing Officer, Clifford Torng, had the following to say about the situation:
“I don’t think it’s any secret that the industry is experiencing quite a radical shift. . . We’re looking to position ourselves as best we can for the long term.”
Despite the closures and likely continued bleeding of customers to Redbox and Netflix, Torng says that Movie Gallery will be staying in business:
“We certainly see a continued role for brick-and-mortar stores like ourselves,” Torng said. “There is a significant number of customers who still enjoy the process of browsing in a physical store for movies.”
Is there hope for Movie Gallery yet, Insiders? Are you one of Torng’s “significant number” that enjoy the traditional rental store experience?