Some of Blockbuster’s 650 UK stores could be at risk as the company seeks to slash property costs.
MCV understands that the retail giant has recruited KPMG to help renegotiate rents and leases with landlords, which could result in the closure of UK stores if agreements can’t be reached.
However, the firm denies that it has sought a company voluntary agreement (CVA) – which was suggested by Property Week – and insists there’s no risk of administration as it attempts to re-position itself in the US and internationally.
“We’ve not sought a CVA in the UK,” said a Blockbuster spokesperson.
“Here in the US we launched a store optimisation plan in September last year, and we announced that we could potentially close 960 stores. That said, we are also deploying 10,000 kiosks, which is like a little Blockbuster store in a box.
“Over 90 per cent of our US stores have another Blockbuster nearby, so it’s not about us leaving a market. We are just optimising stores that are profitable – just like any retailer. Even Starbucks closed stores last year.”
Blockbuster has struggled in the face of growing online competition and falling DVD sales. As a result, the company has placed more emphasis on its video games offering, as well as its online and digital services.
“We are in the process of transforming the business to be a multi-channel provider, so it’s not just about stores,” added the representative.
“In the US we have kiosks that is being deployed with our partner NCR, we also have a digital offering that we are unveiling here in the States, and that will go international as well. We are on Blu-ray players and internet-connected TV devices – so it is part of transforming the business to be more than just stores. Although stores are still an important part of our business.”
“We are heavy into games. Game prices are much higher [than DVD], so it makes our rental offer more attractive.”
The firm reported a $434.9 million loss in Q4 last year. The company’s debt is now said to have reached $1bn.