Rental chain Movie Gallery, which also operates Hollywood Video and Game Crazy, today announced that the company is filing for chapter 11 bankruptcy "to address the company’s capital structure and reorganize its business operations." As a result, 760 stores will be immediately liquidated and closed.
It's not clear exactly how many of those stores will be Game Crazy locations, but after the closings the company will be down to just 250 Game Crazy stores. Last year, Game Crazy closed around 200 stores out of 680 locations, so that would seem to indicate that well over 200 stores are being closed yet again.
Movie Gallery as a whole will have a total of 1,906 stores left in the U.S., including 1,111 Movie Gallery stores, 545 Hollywood Video and the aforementioned 250 Game Crazy locations.
Movie Gallery said its plan is to use the cash on hand "to continue normal operations" and "emerge with [a] new and sustainable business model." The company wants to focus on fewer, more profitable stores. This is the second time the company has filed for bankruptcy in the last three years. "Over the past two years, Movie Gallery took a number of steps to respond to its business challenges and position the company for future success, including closing several hundred underperforming stores across the country; however, these actions were not sufficient," Movie Gallery said in a statement. "After consideration of all available alternatives, the company determined that a Chapter 11 filing was the appropriate next step in its ongoing restructuring."
