Movie Gallery has filed for chapter 11 bankruptcy for the second time in less than three years, citing the “economic and competitive realities facing its business.” As rumored, the rental chain — which also owns Hollywood Video and Game Crazy — will shrink its retail footprint by at least a third. Movie Gallery says it will immediately close and liquidate 760 stores in the U.S., leaving it with 1,906 locations. The company also says it “anticipates closing additional stores during the Chapter 11 process.”
This could definitely speed the transition to alternative film distribution models — like Netflix (NSDQ: NFLX) and Redbox — although as commenters pointed out when we wrote about Movie Gallery’s woes last month it could also provide a boost to Blockbuster.
Movie Gallery still doesn’t seem very interested in pursuing any alternative distribution models of its own — saying its goal is to emerge from restructuring with a new business model “centered on a smaller base of profitable stores.”
Here are all the filings.