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MOVIE GALLERY CLOSES IN ON THE CLOSURE OF 1000 STORES NATIONWIDE
By: Andy Powell, Staff Writer 02-06-08
Movie Gallery filed for Chapter 11 protection in October in the United States Bankruptcy Court in the Eastern District of Virginia.
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The company has now asked the court for permission to pay employees an incentive to expedite the additional store closings.
The company closed 520 of its stores last fall. The additional closures will leave the chain with approximately 3,500 locations. A statement from Movie Gallery points to "continued weakness in the company's industry" as a factor in the decision, which was made "to conserve cash and reduce the company's overall cost structure."
Movie Gallery became the nation's second-largest video rental chain with the $1.2 billion purchase of Hollywood Video in 2005. The current reorganization will turn the company over to one of its lenders, Sopris Capital Advisors LLC. It is official, Mega Retain Chain Movie Gallery will close another 400 Movie Gallery and Hollywood Video outlets as part of its restructuring package under Chapter 11 bankruptcy law.
Joe Malugen, Chief Executive Officer of Movie Gallery, Inc stated publicly that "the decision to close stores is always difficult, but we are confident that we are taking the right steps to emerge from bankruptcy as a stronger company. We've made significant progress in restructuring the Movie Gallery brand and this action will allow us to further focus our resources on those retail store outlets with the strongest operating performance and best prospects possible for the future growth of Movie Gallery."
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The closures will include outlets nationwide and are not singled out based on region. Customers who have accounts established at certain locations will be transferred to other Movie Gallery outlets. In 2005, Movie Gallery (MOVIQ) acquired Wilsonville-based Hollywood Entertainment Corp. for $1.2 billion to become the nation's second largest video rental company.
After missing payments to creditors last fall, it filed for bankruptcy protection in the United States Bankruptcy Court in the Eastern District of Virginia in October. Movie Gallery is now in the process of reorganization that will turn the company over to one of its lenders, Sopris Capital Advisors LLC.
The addresses of the Washington region stores that are closing are: 2845 Alabama Ave. in D.C.; 9000 Gorman Rd. in Laurel; 13424 New Hampshire Ave. in Silver Spring; and 5119 Waterway Dr. in Dumfries. Movie Gallery retained Los Angeles-based auction company Great American Group to help sell inventory at the locations that are After the closures, Movie Gallery will still have running 3,500 retail locations nationwide.
On Tuesday February 5, 2008, accoridng to marketwatch.com, the 52 Week High price for Movie Gallery stock was at $ 5.29 a share and as of 4:00 p.m. EST on February 5th, it traded 136,258 shares and closed the
day at $ 0.02 a share.
