Movie Gallery, Inc., the owner of the Hollywood Video movie rental chain, has filed for Chapter 11 bankruptcy protection. Bloombergreports that a significant number of store closings are expected. This is Movie Gallery's second bankruptcy filing since 2007.
The company listed debt of $500 million to $1 billion and assets of as much as $50 million in Chapter 11 documents filed yesterday in U.S. Bankruptcy Court in Richmond, Virginia.
The owner of the Hollywood Video chain exited its first bankruptcy in 2008. Its traditional stores are losing customers to Netflix Inc., which rents movies by mail, and Coinstar Inc., operator of Redbox movie-rental kiosks.
"One of the most significant industry-wide factors affecting the company’s performance since the 2007 bankruptcy cases has been the cannibalization of rentals by DVD dispensing kiosks operated by Redbox which offer low priced rentals and convenience," Steve Moore, Movie Gallery's Chief Restructuring Officer, said in court papers.
Bloomberg says Movie Gallery will be closing 746 of its 2,600 stores immediately. More store closings could come later. Earlier reports suggested Movie Gallery could close about 1,800 stores. Movie Gallery faces the same problem as Blockbuster - increasing competition from kiosks, digital movie services and on demand services.
Movie Gallery, Inc., the owner of the Hollywood Video movie rental chain, has filed for Chapter 11 bankruptcy protection. Bloomberg 
