Dothan, Ala. – Movie Gallery, the nation’s No. 2 video rental chain, has defaulted on its senior credit facility, citing second quarter results that were “significantly softer than expected.”
The company, comprised of the Movie Gallery, Hollywood Video and Game Crazy chains, said it may seek a waiver from its lenders to remedy the defaults, and will try to conserve cash by accelerating store closings and consolidations. Other options it is considering include divesting assets, recapitalizing, forming a strategic alliance, or merging with or selling to a third party.
The company, comprised of the Movie Gallery, Hollywood Video and Game Crazy chains, said it may seek a waiver from its lenders to remedy the defaults, and will try to conserve cash by accelerating store closings and consolidations. Other options it is considering include divesting assets, recapitalizing, forming a strategic alliance, or merging with or selling to a third party.
The article in TWICE goes on (and on!) to list the litany of woes that affect not only Movie Gallery, but also Blockbuster, and the category as a whole.
I've noticed that the Rogers Video and both Blockbuster locations in my neighborhood have been looking more and more shabby over the past year. I can't help but believe that the sun is definetely setting on the video rental store business. When the bandwidth capacity for high-definition pay downloads hits us, expect the deterioration of the retail category to accelerate.
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