Rental giant Blockbuster is looking to sell off its entire international business, including its 650-store UK operation.
MCV understands that the retailer is in negotiations with landlords to reduce its store count to make it more appealing to potential buyers – placing some of its 5,000 UK employees at risk.
Blockbuster has significantly ramped up its presence in games following falling revenues for its rental and DVD business.
Futhermore, with the collapse of Woolworths and Zavvi, plus WH Smiths' withdrawal from the entertainment market, Blockbuster has become one of the UK's most significant DVD and games retailers.
We are divesting our international assets,” a Blockbuster rep confirmed.
In our last earnings call our international assets generated over $1bn in revenue. These are valuable assets and are worth a lot.”
The Times reported this week that US finance house Winchester Capital has been assigned by Blockbuster's American HQ to find a buyer.
If a buyer cannot be found, there's a risk the firm could close its entire UK operation – as it did in Portugal last month.
The actions Blockbuster is taking – particularly around renegotiating its leases – are so it can exit from some of its less profitable stores,” said Screen Digest senior video analyst Richard Cooper.
This allows the firm to streamline its business in preparation for a sale.
Blockbuster is looking to change its operations in its core US market. In order to fund that it is looking to sell off its European arms – not just the UK, but Ireland, Italy and Denmark as well.
Once Blockbuster UK has been scaled back to its profitable stores, there's no reason why it wouldn't be an attractive proposition for a potential buyer.
If it came to a point where no potential buyer was found for Blockbuster as a going concern, then it would probably mean the closure of the Blockbuster chain in the UK.”
Blockbuster's debt is said to have reached $1bn.