Gordon Brothers Advances Blockbuster Talks
The retail restructuring specialist Gordon Brothers Europe is hoping to move into exclusive talks to salvage the rump of Blockbuster's UK operation as soon as this week, Sky News can reveal.
Gordon Brothers, which has worked with struggling retailers including Focus, the DIY chain, is one of two remaining parties in active talks with Deloitte, which was appointed as administrator to Blockbuster UK in January.
Gordon Brothers has submitted a bid for the DVD rental firm predicated on retaining roughly 275 of the 528 Blockbuster shops that were open before the chain's collapse, according to insiders.
The other prospective bidder's identity was unclear on Tuesday, although it is understood that Gordon Brothers' offer has a more compelling 'going concern' status. People familiar with the process said the other party was not GA Europe, another restructuring firm, which had been reported last week as a rival bidder.
People close to the talks cautioned that there was "no done deal" and that any rescue of Blockbuster's UK business could yet collapse altogether.
Sources confirmed, however, that Deloitte was targeting a deal ahead of the 'quarter day' towards the end of the month when retailers make their rental payments for the following three months.
It is unclear how many of the 275 stores being sought by Gordon Brothers will be retained for a protracted period, given the structural challenges faced by Blockbuster's business.
Since the appointment of Deloitte, 293 stores have been put on notice of closure, some of which have now shut their doors. Nearly 50 shops have been sold to Wm Morrison, the supermarket chain.
Insiders said that Deloitte was in ongoing talks with Dish Network, Blockbuster UK's US-based parent, about the inclusion of the DVD retailer's brand as part of the package of assets that would change hands in any deal.
Blockbuster is one of several prominent chains to have fallen into administration this year, the latest being Dreams, the beds retailer. Others which have fallen victim to a combination of a downturn in consumer spending and the migration of shoppers to the internet include HMV and Republic, the youth fashion chain.
Deloitte and Gordon Brothers Europe declined to comment.