Movie Gallery, the parent company of video game retailer Game Crazy and movie rental chain Hollywood Video, intends to close its remaining 2,415 U.S. stores (which includes 250 Game Crazy shops), and is already in the process of shutting down more than half of its outlets.
The company filed for bankruptcy last February for the second time in two and a half years. The Wall Street Journal, which reported on Movie Gallery closing its shops, points out
that its financial troubles can be traced back to the $600 million debt it took on when acquiring Hollywood Video and Game Crazy in 2005, in a time when on-demand movie streaming services were rising in popularity.
Game Crazy had roughly 680 locations, most of which were attached or adjacent to Hollywood Video establishments, but last October the retailer closed around 200 of its stores. It then cut its number of shops down to 250 after Movie Gallery filed for bankruptcy three months ago.
Movie Gallery had hoped to restructure in bankruptcy court and continue operating with a leaner set of stores, but evidently that strategy failed.
The Wilsonville, Oregon headquartered company has not revealed whether it intends to close its 180-plus Canadian outlets -- those operations were unrelated to the chain's bankruptcy filing last February.
Movie Gallery notified its U.S. employees about the closure last Friday. The company is considering hiring a liquidation firm to oversee remaining store consumers, according to a source close to the matter.