Blockbuster Closing 1,000 Stores By The End Of 2010
Reported by Outsiders - 2009.09.15
With the rise of competitors such as movie-mailer Netflix and Redbox, whose flick-dispensing machines can be found in grocery stores all over, Blockbuster is being forced to reset, saying it may close nearly 1,000 stores by the end of 2010 as its once-certain dominance continues to be threatened by rivals.
According to a regulatory filing Tuesday, Blockbuster expects to shut between 810 and 960 locations by the time next year wraps up, a number that would exceed more than one-fifth of its current U.S. shops.
That's quite a step up, or back depending on your perspective, from Blockbuster's previous plan, which anticipated 380 to 425 closings in that time frame. Here's how the corporate office see it: Blockbuster characterizes 35% of its stores as "core," while saying 47%, or nearly half its total, are profitable, but still "non-core." The remaining 18% aren't turning a profit.
The company's filing with regulators show that it's taking a multifaceted approach to its future offerings. Currently, it has 4,356 domestic stores, of which 606 are franchised. With those brick-and-mortar sites it battles against Hollywood Video and others. In addition to shrinking overall, Blockbuster expects to have more of its stores be the smaller city-based variety, with fewer large structures.
Meanwhile, Blockbuster's Total Access service, with 1.6 million subscribers, has a way to go before it can match the 9.4 million users Netflix claimed at the end of 2008. That makes it the undisputed leader of the 12 million-strong estimated market. Not surprisingly, Blockbuster hopes to grow its own base, and with Americans always looking for convenience -- walking to the mailbox beats driving to the store any day -- perhaps it can.