Blockbuster Closing 300 Stores Due To Online Video Rentals; What's Next For Chain?
Video stores continue to die a slow death as the once immensely popular Blockbuster has now announced plans to close yet another 300 of its stores across the country. This announcement followed the closure of about 500 underperforming Blockbuster locations last year.
According to Blockbuster spokesman John Hall, the closures mean that there will only be 500 store locations left within the United States. Hall also says all store closures in the coming weeks will either be due to underperformance or an expiring lease.
"Really, from the time of acquisition there has been a strategy to evaluate stores on a case-by-case basis in an effort to look at their production."
3,000 employees will be affected (read: lose their jobs) from the mass closures. Blockbuster had the courtesy to inform those 3,000 employees of the major changes in the weeks ahead.
Blockbuster was bought by the Dish Network in March 2011 for $320 million following the video store's bankruptcy. Contemporary companies like Netflix offer the same service as Blockbuster in a significantly more convenient package as the movies are mailed straight to a member's home.
Despite the state of Blockbuster's obsolete in-store video rental business model, Dish Network believes the brand still possesses value. Dish Network is the second-largest US satellite-TV service provider and currently holds approximately 14 million subscribers. Now, the company has plans to spearhead the mobile phone business and sell smartphones and wireless services via the line of distribution of its 500-odd Blockbuster stores.
"We're still evaluating that," said Dish chief executive Joe Clayton. "We've looked at possible fixturing, how it would be done, who would our partners be, but nothing has been done yet. It's still in exploratory phase."
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