Blockbuster will close 300 more stores while also eliminating 3,000 jobs in the first quarter of 2013, a decision motivated by the consolidation strategy of parent company, Dish Network.
Spokesman John Hall reported the new closures will leave the movie rental company with about 500 stores remaining in the United States. Since Dish bought the video rental chain in 2010, Blockbuster has struggled to stay relevant, investing in digital technologies and projects to counter the devastating effects on the rental business of Redbox and Netflix.
The company’s 2012 performance failed to meet the profit requirements set by Dish, which seemed more interested in expanding into telecommunications.
As a result, the most unprofitable stores will be closed immediately, while other stores over the coming weeks and months will close up as their leases expire. This does not mean that Dish Network is going to end the Blockbuster name entirely. In an email sent to media agencies, Hall he reported that, “We continue to see value in the Blockbuster brand and we will continue to analyze store level profitability and — as we have in the past — close unprofitable stores.”
The store closures are a continuing part of the Dish acquisition. Hall confirmed that Dish had bought Blockbuster with the intent to examine each store and shut down those with poor sales. This latest wave of Blockbuster closings is the next step of that plan, although where it will end is still unclear.
Hall did not mention the more modern services that Blockbuster has tried to use as a lifeline, such as on-demand streaming of movies and Blockbuster Express kiosks that competed with the popular Redbox service. It is possible that Dish will eventually close down all stores and leave these remnants as the profit center of a streamlined Blockbuster.
However, Dish CEO mentioned to the Denver Post at CES 2013 that the firm had looked at “possible fixturing” for smartphones and wireless data plans. This could lead to Blockbuster restructuring entirely into a storefront for Dish Network mobile solutions, competition for the many Verizon, Sprint and AT&T businesses that have already moved into Blockbuster’s empty buildings.
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