Financial News

  • 6 December 2013, 9:16

Blockbuster To Shut With 1,200 Job Losses

The movie and games rental chain Blockbuster is on course to be closed down by the end of the year with the loss of the remaining 1,200 jobs, it has been confirmed.

The news comes as a bitter, but hardly surprising, pre-Christmas blow to the staff after store numbers were cut by administratorsMoorfields Corporate Recovery in the weeks after the retailer's collapse - its second of the year - following the failure of the new owner's turnaround plan.

The administrator, which has already presided over the closure of more than 100 stores as part of the administration process, confirmed no buyer had been found for the outstanding 153 shops and 62 of them are to be shut immediately with the loss of 427 posts.

The other 91 stores are set to close by the end of the year, resulting in the remaining 808 jobs being axed, unless a deal can be done for the firm to continue as a video and games chain.

The sources believe there has only been some interest in Blockbuster's customer lists and its sale-by-post business.

The statement also confirmed that all rental activity will cease from Saturday and stock will be sold off at discounts of up to 70% as stores close down.

Blockbuster was snapped up in March by private equity group Gordon Brothers Europe after its initial collapse in January.

But the new owners said the chain had continued to suffer from poor trading and it was placed in administration last month.

Gordon Brothers also failed to broker a licensing deal with US company Blockbuster LCC, which owns the brand, for a new digital platform though that was likely due to the demise of the US chain, which is also closing down.

The failure of the brand's fortunes - on both sides of the Atlantic - was largely blamed on shifting consumer trend towards online movie rentals and on-demand TV.

Blockbuster in the UK was also hit hard by intense competition from supermarkets and online DVD sales.

The devastating impact of web-based sales on Britain's high streets has been laid bare in the past year by the demise of camera chain Jessops and electricals group Comet, which also cited competition from online players as a major reason for their declines.

Jessops was later reborn under the control of entrepreneur Peter Jones of TV Dragons' Den fame.

A string of high street retailers have been reporting tough trading conditions, with the pick-up in the economy failing to spark a spending spree because of the continuing squeeze on living standards through low wage growth and high price rises.

Barratts Shoes entered administration for the third time in four years last month with more than 1,000 jobs at risk while Sky News learned this week that Midlands-based stationers Osbornes was to fold.