Blockbuster to close up to 960 outlets by 2010 end
Company plans to shutter stores to "improve four-wall profitability"
Blockbuster has revealed plans to close up to 960 of its retail stores by the end of 2010 in a move it hopes will "improve four-wall profitability".
According to a SEC filing it plans to close unprofitable stores, which account for 18 per cent of Blockbuster's more than 7000 outlets.
The company will close 280-300 stores as part of 'normal closures' this year, then add additional stores to an 'accelerated closures' category to be shuttered by the end of the year. This total will amount to 300-385 locations.
2010 will see 100-125 normal closures for the retail chain, and 130-150 accelerated closures. By the end of 2010, the company expects to have closed 810-960 retail outlets.
"All these stores are candidate stores," spokesperson Randy Hargrove told CNet of the move. "Although we may in fact close that many stores, if we can renegotiate leases or remodel stores to make them more profitable, that number might go down."
In addition to the store closures, Blockbuster also indicates it has 275-300 stores subject to the company's "lease mitigation/termination efforts". Another 250-300 could also be converted into outlets, bringing the possible number of rental outlets that could be closed up to 22 per cent of all its stores.
The company's kiosk business however is expected to grow, and in a separate filing with the SEC it reports it has 497 kiosk units available to US customers which it hopes to grow to 2500 by the end of 2009 and 10,000 by mid-2010.
Kiosks will help the company turn a corner, said Hargrove, who points out that even though some stores will close, these will "increase the points of distribution, thus getting our product in front of more people. This whole plan is part of a multiplatform strategy to get those additional points of distribution."