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Another 500 Blockbuster Stores? Sales Plunge 21% Date: 11/19/2009 |
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Blockbuster reported Q3 sales down 21% last Friday, and now one analyst is suggesting that the chain will have to close another 525 to 600 stores beyond the 950 previously announced ( see ?Blockbuster Closing Nearly 1,000 Stores?). The company lost $114 million in the quarter. Blockbuster is losing market share on all fronts. Same store revenues from product sales were down over 35% vs. a market decline of only 14% (see ?DVD Sales Dropping?); and rental revenues were down 14.5% vs. an increase in the rental market of around 10%. In the sell-through business, Blockbuster is getting pounded by mass merchants, who have now decided to make DVDs loss leaders to bring traffic into their stores this holiday season (see ?Best Buy Fires Back?). And in the rental business, kiosks and Netflix are gaining market share at blinding speed. The analyst, Michael Pachter of Wedbush Morgan Securities, believes the additional store closings will be necessary to offset the declines in revenues, according to Home Media Magazine. With Movie Gallery also shedding stores rapidly (see ?Movie Gallery Closing 400+ Stores?) it seems clear that the world of home video is going to be dramatically different in only a few years. It may even be that for niche titles, independent retailers may once again have a shot at what?s left of the packaged media business. |
| Source: ICv2 |
