ABOUT TIME....Blockbuster Will Close Remaining 300 Stores And Stop DVD-By-Mail Service After Getting Pummeled By Netflix For 10 Years..2,800 People Will Lose Their Jobs.. Blockbuster, the video rental chain thats been pummeled by the rise of digital and on-demand entertainment, said it will close its 300 remaining U.S. stores by early January. The Blockbuster By Mail service will end in mid-December. Blockbusters current owner, DISH Network Corp., said there will be about 50 U.S. stores operated by franchises not affected by the announcement. But DISH said it is also closing all its U.S. distrubution centers. Theres currently only one Blockbuster location in the Chicago area -- on North Ave. in Elmwood Park. Dish plans to lay off as many as 2,800 employees. Dish had initially planned to keep 1,500 stores open and retain 15,000 employees, or about 90 percent of the outlets at the time after its acquisition. It has been gradually shutting stores and laying off employees. DISH will keep the licensing rights to the Blockbuster brand and its video library. DISH said it will focus on the Blockbuster streaming and on-demand services currently offered to customers. This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment, said DISH President and CEO Joseph P. Clayton. Despite our closing of the physical distribution elements of the business, we continue to see value in the Blockbuster brand, and we expect to leverage that brand as we continue to expand our digital offerings. Blockbuster filed for bankruptcy in September 2010, with $1 billion in assets and $1.46 billion in debt, according to Bloomberg. It was purchased by DISH in a bankruptcy auction for $320 million the next year, as a way for the satelitte TV provider to expand its offerings and compete against rivals like Netflix. It was a dramatic fall for a brand that at its peak had a market value of $5 billion. Online retailers like Amazon Inc and online sites such as iTunes and Netflix have eaten away at Blockbusters business model for years. Blockbuster was founded in 1985 when video cassette recorders were becoming a fixture in U.S. homes. When Blockbuster filed for bankruptcy in 2010, it originally proposed to emerge under the control of a group of investors that included activist Investor Carl Icahn and several hedge funds. However, those investors never agreed on a business plan and after poor holiday sales Blockbuster was put up for sale in 2011. Icahn had wrote in a letter to the Harvard Business Review in 2011 that Blockbuster was the “worst investment I ever made.”
Posted on: Thu, 07 Nov 2013 01:02:30 +0000
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