Movie Gallery Files for Chapter 11 Bankruptcy

2/3/2010
Lauren DuBois
Hollywood Video parent company files for the second time in three years.

Chances are, third time won’t be a charm.

In its second trip through bankruptcy court since 2007, Movie Gallery Inc., owner of the Hollywood Video movie rental chain, plans to close 805 stores, almost a third of its remaining total, according to ABC News.

The company has already closed more than 2,400 of its stores since the first filing in 2007. The same filings indicated that the chain has about 2,600 stores now.

The company claims it is struggling with competition from Netflix Inc.’s mail delivery service, and Redbox’s $1-per-night kiosk rentals, which contributed to a total revenue loss of 28 percent, losing the company $546.3 million.

According to the Lincoln Journal-Star, among the stores closing is the last one located in Lincoln, Nebraska. According to the Movie Gallery Web site, all Nebraska locations will close except for one.

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