The BBC has just confirmed that the UK arm of the once omnipresent DVD/game rental firm is entering into administration, which includes 528 stores across the UK, employing more than 4,000 staff.
Accountancy firm Deloitte will now oversee the day-to-day running of the firm, and has unsurprisingly noted that competition from “Internet-based film services” has hit business hard.
The good news, if you can call it that, is that vouchers can still be used in Blockbuster, unlike Jessops (which closed all stores shortly after) and HMV, which is no longer accepting pre-paid gift vouchers until its future is sorted out.
“We are working closely with suppliers and employees to ensure the business has the best possible platform to secure a sale, preserve jobs and generate as much value as possible for all creditors,” says Lee Manning, from Deloitte’s Restructuring Services practice.
“The core of the business is still profitable and we will continue to trade as normal in both retail and rental whilst we seek a buyer for all or parts of the business as a going concern. During this time, gift cards and credit acquired through Blockbuster’s trade-in scheme will be honoured towards the purchase of goods.”
This is the third major UK High Street company to enter administration in the space of a week, with camera retailer Jessops making its announcement a week ago today, and HMV following suit yesterday. Previous to this, electrical retailer giant Comet entered administration back in November.
It perhaps goes without saying that there will be many more casualties of the e-commerce revolution, and it seems that a failure to innovate and evolve has played a big part in their downfall. Indeed, some may even be surprised that Blockbuster has survived as long as it has.
As with HMV, however, Blockbuster may well have some stores that are profitable, so it could just be a case of closing some and keeping the ones it feels can still draw customers in. After all, not everyone is on-board with the online streaming revolution yet, even though the likes of LoveFilm are continuing to sign deals with the major media companies such as NBCUniversal, as we reported earlier today.