Sky news is reporting that Blockbuster UK, the DVD rental chain, has called in administrators in a move which puts more than 4,000 jobs at risk.
Blockbuster UK is the third major high street store to go bust or on the verge of going bust in the last week and fourth in the last two months. Recently Jessops and HMV went into administration, while Comet closed its stores at the end of 2012.
According to the Sky report, “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 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,” Mark Kleinman reports for Sky News. “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.”
Lee Manning, a partner at Deloitte, in an interview with Sky News stated that:
[quote] 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.[/quote]
Blockbuster UK is a subsidiary of Blockbuster LLC in the US, owned by The Dish Network, which is headed by billionaire businessman Charlie Ergen, according to the report.
