The news that Blockbuster has once more entered administration broke last month, with industry experts concerned that the chain is no longer in touch with the needs of modern consumers. Sadly, it appears that these worries were justified as administrators from Moorfields Corporate Recovery have thus far failed to find a buyer for the stricken chain.
As a result, administrators now have no choice but to start a phased closure of the Blockbuster chain, beginning with 30 stores which will close over the next few days. This will have severe repercussions on the movie rental chain’s employees, 182 of whom will be made instantly redundant as their stores cease trading for good.
While joint administrators Nick O’Reilly and Simon Thomas are still hoping to secure a last minute sale on the brand, or at least a number of the franchised stores, they admit that there have so far been no “acceptable” bids which would allow them to proceed further.
In a statement, the administrators said; “It is unfortunate that we have been unable to secure a buyer to date, and therefore we have had to take the decision to make further store closures.
“We are continuing to review the profitability of the portfolio and may have to make further closures over the next couple of weeks.”
Blockbuster was once one of the leading lights in the retail entertainment sector, with customers from the UK and USA choosing the chain over all others when looking to rent a movie or video game.
However, with the advent of the internet retailing sector and establishment of low-cost online services such as Netflix and Love Film, the brand was priced out of the market, especially as consumers were able to instantly access databases containing hundreds of television shows and new release films.
Although Blockbuster attempted to address the boom in online activity by setting up a customer delivery service, whereby customers could order a movie from their closest outlet online and have it delivered to their door, this did not prove cost effective and further added to the financial woes facing the brand.
So far, a total of just over 100 stores in Blockbuster’s current 264 commercial property portfolio have closed under Moorfield Corporate Recovery administrators, cutting around 630 retail jobs in a variety of locations throughout the country. Sadly, it appears that this trend is set to continue, as the brand which only 11 months ago operated 528 stores in the UK alone prepares to say its final goodbye to the high street.
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