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movieGallery-main_FullMove 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?

[via Bloomberg and Video Business]

11 Responses to “Movie Gallery to Close up to 450 Locations”

  1. Member [Join Now]
    rshanley [rshanley]

    I used to work at a Movie Gallery, until we were closed down in February 2008. What was the reason? Because our lease was up on the building and the owner was going to raise it to $14,000 a month. Crazy, right? So we got put on the chopping block, and by the time the builing owner was willing to negotiate, it was our last week to be open for business. Talk about a bunch of bad luck! I do miss those free rentals… :(

  2. Visitor [Join Now]
    Davis Freeberg [visitor]

    There’s an old Hollywood Video near where I work that has been vacant for over three years now. I’ve called the leasing company a half a dozen times to inquire about renting it and they started at approx. $22k per month and now have it at $17K. At those kinds of premiums, you’ve got to be selling something a lot more valuable then Videos to afford it. Still don’t understand why the leasing company hasn’t adjusted it to the market, but it may have something to do with Movie Gallery having to still pay something each month.

  3. Visitor [Join Now]
    John Small [visitor]

    Movie Gallery / Hollywood was heading into non-existence well before Redbox showed up.

    They are doomed because they are carrying too much debt.

  4. Visitor [Join Now]
    The Turnip [visitor]

    I think my Hollywood Video was one of the first to close due to poor management. After a minor remodel, it took them over EIGHTEEN MONTHS to transform multiple vertical piles of cases into an organized, alphabetized store instead of a “rummage sale.” I still wish I had ratted them out to HQ; maybe they would have lasted a little longer. They had a decent selection of movies including classics and “semi-obscure but wildly-popular” TV series like Firefly and Dead Like Me . Now the next closest store I would considering visiting is a 40 mile round trip to rent/return and that’s just not worth it.

    But no, I don’t have any interest in the Store Experience. High prices, long lines, empty cases where the new releases should be and what I consider an embarrassingly poor selection of older, quality titles. Blockbuster HAS to be the worst experience ever. Netflix + the Library + Redbox is the best combination for me, but to each his own.

  5. Visitor [Join Now]
    Redbox User [visitor]

    Anyone know of a “master list” of remaining stores closing? We still have one Movie Gallery still open, the other 5 or 6 closed 2 years ago.

  6. Member [Join Now]

    Local Blockbuster closed for the same reasons of having lease prices increased and never re-opened. I hated them personally but at least they gave the consumer some rental options. Now all we have to rent from anymore is Hastings or Redbox. I love Redbox but hate not being able to rent any Mini-series or TV series from the 5 local boxes.

  7. Visitor [Join Now]
    anony [visitor]

    Lack of competition is bad for the consumer.

  8. Visitor [Join Now]
    vio [visitor]

    Movie Gallery is still around? Unfrickinbelievable. I NEVER see their stores anywhere and I never hear a damn thing about them anymore. Same goes to Hollywood Video stores, which of course are now just a “brand” for parent company Movie Gallery. I had thought for sure this company had gone belly up. I still see Blockbuster stores all over town and their name is constantly in the headlines, but who actually rents movies from Movie Gallery these days? Simply incredible that they’re somehow still in business.

  9. Visitor [Join Now]
    evilangel217 [visitor]

    I work @ the Movie Gallery in LaPorte,IN. We just got a 48 hr. notice on our store. Either pay rent or they will lock it up and seize all of our inventory!!! Unemployment here I come!! bleh!!

  10. Member [Join Now]

    The Hollywood Video in Springfield, OH. closed up almost two years ago, and though some of the space has been taken over, half of it still sits vacant. The only B&M(Brick and Mortar)video stores left is one Blockbuster Video(The second one in town closed down last month)and one Family Video(We had three of them just three years ago, now down to the last one). We have 14 Redbox kiosks here, though, with all the local Kroger stores getting them within the last two months. Also to note, the ePlay machine that was at a local Speedway gas station is no longer there as of this week.

  11. Visitor [Join Now]
    ex-employee [visitor] then type movie gallery in the search. Click on the link about 450 movie gallery stores closing by years end.

    Everyone who is interested in store closings should rant at that link. Tell us where your store is or was and what bs you have heard. 10 years I spent working my tail off for the company and got screwed overnight.

    The store closings will continue. Noone is safe. The CEO is like the Wallstreet thieves and should be ties and quartered.

    Rent not paid for 4 months in ANY location. There will be MANY more than 450 closings.