Financial News
- 17 January 2013, 13:25
Blockbuster Collapses: 4,200 Jobs At Risk
The crisis on Britain's high streets is continuing after Blockbuster UK, the DVD rental chain, called in administrators in a move which puts more than 4,000 jobs at risk.
Blockbuster UK has appointed the accountancy firm Deloitte to handle an insolvency process less than 48 hours after it was hired to oversee the administration of HMV, the entertainment retailer.
The move was confirmed following a report by Sky News.
The spate of administrations threatens to make this one of the grimmest periods in the history of the high street as retailers face up to the prospect that they can no longer compete with digital competitors.
Blockbuster has been especially hurt by the growth of online film rental companies such as Lovefilm. A plan for Blockbuster to offer its own version of a film-streaming service appeared to stall in recent months.
Blockbuster UK, which is headquartered in Uxbridge, employs almost 4,200 staff and operates from 528 stores.
Its parent company, Blockbuster LLC in the US, is owned by The Dish Network, a US telecoms and media group which is headed by Charlie Ergen, a billionaire businessman.
Lee Manning, a partner at Deloitte, said: "In recent years Blockbuster has faced increased competition from internet-based providers along with the shift to digital streaming of movies and games.
"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.
"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."
A spokesman for the administrator said the company's pension scheme was fully funded and gift-cards would be honoured at Blockbuster stores.
The recent flurry of retail collapses threatens to remove some of the famous names on British high streets.
If buyers cannot be found for HMV and Blockbuster, they will join the likes of Jessops, JJB Sports, Clintons Cards and Comet, which have all been forced to call in administrators.
The fact that the collapses of Blockbuster, HMV and Jessops have happened within just a few days of each other - with the potential combined loss of more than 10,000 jobs - also threatens to escalate the crisis into a broader political issue.
what do you think?
Steven Tracey
Before anyone start blaming the internet again, both blockbuster and HMV should have moved about 90% of their business online leaving a few city centre shops. Neither gave enough credit to the ever more money savvy consumer and both reduced their customer service levels by using low grade staff. By now, blockbuster would have been out performing most of the more recently founded streaming companies and HMV could have been a real alternative to iTunes. They've both had plenty of time to adapt and now the staff and voucher holders who will pay the cost.
davenlesley
Steven. It certainly looks as if someone in the higher echelons of the company should have been far sighted enough to have seen this coming. Adapt or die
Steven Tracey
Especially blockbuster - they had a large loyal membership base who could have been seemlessly added to a Netflix style streaming version. This would have provided income for the new venture while a program of downsizing their retail arm could have began.
Mark Ashpole
totally agree.Any business standing still may aswell be going backwards.Lazy business planning on their part
Nick Bowden
This country's is finished how many jobs and companies are going bust get Cameron out now
davenlesley
Nick. And come the 2015 election Woolworths Hughes, Comet, Jessops, HMV and Blockbuster are all going to rise miraculously from the ashes. You are deluding yourself my friend. Nothing will change other than the name of the person at the dispatch box saying its all the other lots fault.
Vladtheinhaler .
instead of blaming someone else, blame the man in charge.
davenlesley
Vlad. If only it was so simple. Sack the man in charge and everything will be hunky dory. To be replaced by what pray? Another millionaire career politician who knows nothing of life other than Uni, political researcher, political advisor then MP. God help us.
Lorgar Aurelian
Didn't realise Cameron ran Blockbuster and HMV...
Juliet Smith
Im not Surprised & i think There will be a lot more yet.I believe Argos are stuggling.Also,i think if some shops in certain places aren't making money they're being closed as our Co-Op closed last month.And,Marks &Spencies closed here a while ago.
robert
our m&s closed in the town centre and moved 1 mile out of town to privately owned retail park,probably paying more rent.Wonder why the town council didn't try to get them to stay by offering same premises at a lower rent. Beats me.
ali baba
if your company dont have interests in the "bric block" (brazil, russia, india and china) and you only work in european markets, highly likely you will go under that Phillip Green is such a nasty man, when he shouted out a few weeks ago that all is ok, then next thing he sells 25% of his business. talk about giving misinformation in order to get a better price.
Adrian Wagstaff
Most people switch on their television set and say, "This is boring." They watch a film and say it's rubbish. They watch the second part of the film and say it's worse, as though that was made just to make money. They watch some of the third part of the film and don't bother watching the rest. Why has Blockbuster gone bankrupt? Simply because it is selling total rubbish films which people wondered why they bothered buying them. If that wasn't the case, they'd be making a profit. Clearly, people don't like films about twins, films about mountain climbing or caving or talking animals. People can't afford brand new cars and don't want to watch idiots driving around on their televisions in big sports cars. People don't like films about schools. It's not making money due to all the stupid films it's selling.
ffreem200
Well Adrian if u read other news sites u will see some are profitable as of film choice they do not make the films they merely lease ones that have been created by stars n producers so its not there fault if u have a bad taste in films.
Adrian Wagstaff
I don't watch films. If other companies are profitable then other companies are profitable and that's a reasonable statment to make, so far as I'm concerned.
Lorgar Aurelian
Same films as the ones people download. It's cost, not quality.
Diane Rogers
Feel sorry for staff.Hope something gets sorted. Apparently there are over 60 empty unuts un Shrewsbury,Probably more to come.Blockbusters is out of town here
shirley sutton
It's getting like that in most towns ours is full of charity shops or empty units and the landlords answer is higher rents forcing more to close - how can shops compete when they've got overheads that the Internet doesn't have not do most of them pay tax either as based god knows where
Diane Rogers
That's exactly right high rent, business tax, etc
michael jones
when is there going to be a vote of no confidence in this shambles of a government? 10000 retail jobs gone this winter , construction industry on its knees, not that cameron osborne and clegg care while they sip their gin n tonics in their mayfair clubs
Mark Ashpole
these are a victim of technology not the economic state.Online rentals and downloads are at an all time high and growing
bjnk
Time to shut down the internet and spread the wealth its stealing.
Peter Coates
Left overs from Gordon Brown I'm afraid. A monkey could see this coming in 2005. (obviously GB is no monkey) Cameroon can't see the next lot arriving. Get us out of this eec outfit pdq or we will all be broke.
davenlesley
Peter. A bit unfair blaming it all on Brown although he certainly contributed to it in a big way. This lot have beeen in power over 2.5 years and the excuse that it is all Labours fault is wearing a bit thin. It is hightime the policies(if any) of this coalition were having some effect.
Ben Ralph
And how on Earth is this Brown's fault?? What it is is the crossover into the digital, online age. There were regretably always going to be high street casualties. Ultimately the only safe shops are charity shops and takeaways.
Andy Smithies
Only ones to make money out of this are the leeches called administrators who ALWAYS get their big slice!!!!!
shaun spencer
Some of these firms really ought to have seen what was coming with the new technologys available to peaple and adjusted to demand.in other words future proof themselves.though this is proberly easier said then done.
davenlesley
Shaun. I suspect they thought that sticking with the tried and tested business model which has worked for years would see them safe. Times have changed, technology has changed and its a case of adapt or go under.Few seem to have adapted of late
shaun spencer
Yes internet shopping taking over.all the firms that have gone bust recently havent taken advantage of this.i tunes, you tube, downloading, all things hmv should have competed in.
Brian Quinn
It is apparent that the company to work for is Deloitte. If current trends persist they will be the only Company left.
robert
But only for the short term BRIAN,then when all the big outfits have gone bust DELOITTE will go under then we will all be going back to the corner shop.What go'es round comes round.
Vladtheinhaler .
I see the usual comments, blaming labour , are still popping up. You have got to be joking. Shaun... P E O P L E......... there is no A. How many times.
shaun spencer
Im not on hear to watch my p,s and q,s vlad as long as.others no wat im sayin it does not mater.its not like im wrighting too the prime minister.
Valerie Wood
Just like new machinery caused loss of jobs in the 19th century and the Luddite revolts, so today the internet is causing many job losses.
Louisa Gieldon
We certainly seem to be in a time of transition away from high street shopping. I feel so sorry for all those who are losing their jobs
Lorgar Aurelian
Best comment yet.
MKetteringham
Lack of vision on the part of their top management Too little too late should have go to online.
shirley sutton
When are the government going to so something before our towns and cities become ghost towns as most of these websites where down load films etc are foreign owned and not paying tax same as electronics etc etc More needs to be done to find these people new jobs preference needs to be given to Brits before immigrants and if this trend continues they need to be sent home
Name witheld
This comment has been removed for violations of our Terms and Conditions.
movvi
I just read Silas Marner again... It's the Industrial revolution again, isn't it? An electronic version. Small companies were devastated last time, skills and traditional crafts vanished and the thousands who slumped into poverty are no more now than an historical statistic or interesting primary school project. Change has to happen, of course - in 100 years this may be seen as progress, but the victims need looking after now. It's 2013.
Lorgar Aurelian
This comment has been removed for violations of our Terms and Conditions.
TIM x
Soon the only retail stores left will be supermarkets. You'll need to buy all your other stuff online. Retail jobs will be behind a keyboard or on a delivery van. Scary isn't it?
Lorgar Aurelian
This comment has been removed for violations of our Terms and Conditions.
john byrne
2:42pm on 16/1/2013
Not surprised, but feel for all the staff being made Redundant. where are the private sector jobs now?