Thu, Sep 23, 2010 | 21:19 BST
Blockbuster files for bankruptcy in US
Blockbuster has filed for Chapter 11 bankruptcy in the US.
The game and video rental chain, which planned to shutter 810-960 stores last year, has filed for restructuring in order to keep debts under control.
Stores outside the US will not be affected, as the chains are operated as separate franchises, with Blockbuster UK still in “very good shape” with an 18 percent profit gain in 2009.
The restructuring of US Blockbusters stores will cut the chain’s debt by around $1 billion (£638m) to $100 million (£63.8m).
“After a careful and thorough analysis, we determined that the process announced today provides the optimal path for recapitalising our balance sheet and positioning Blockbuster for the future as we continue to transform our business model to meet the evolving preferences of our customer,” said Blockbuster CEO Jim Keyes.
“The recapitalised Blockbuster will move forward better able to leverage its strong strategic position, including a well-established brand name, an exceptional library of more than 125,000 titles, and our position as the only operator that provides access across multiple delivery channels – stores, kiosks, by-mail and digital.”
Currently there no plans shut down some 3000 stores in the country.