A Lot Has Happen At Blockbuster
Blockbuster Inc. is an American-based chain of DVD, Blu-ray, and video game rental stores. As of January 3, 2010, there are over 6,500 Blockbuster stores in the U.S. and in 17 other countries worldwide. It is headquartered in the Renaissance Tower in Downtown Dallas, Texas. Blockbuster is recognized around the world as a leader in rentable home entertainment. The brand has more than 2,600 stores outside the United States.
The first Blockbuster store opened in Dallas, Texas on October 26th, 1985 at the corner of Skillman and Northwest Highway. The founder of the company was David Cook, who grew the business and brought it public. The innovation was derived from Cook’s experience with managing huge databases. After the first few stores opened, he built a $6 million warehouse in Garland, TX that could pull and package multiple stores in a day. Key to the early success of Blockbuster, was their ability to customize a store to its neighborhood, loading it up with films geared specifically to demographic profiles in addition to the popular new releases, and a sizeable collection of catalog titles. The logo was created by Lee Dean, working for the now defunct Rominger Advertising agency.
Filing for bankruptcy
Blockbuster Inc. is preparing to file for Chapter 11 bankruptcy within the next few days, a source familiar with the video rental chain’s plans said on Wednesday.
The Dallas-based retailer said earlier this year it would close nearly 10 percent of its stores. Customers have moved away from renting films through its outlets in favor of online services such as Netflix.
It is carrying some $900 million of debt, according to filings with the U.S. Securities and Exchange Commission.
The company is working with debt holders on a plan, under which it would continue operating but shutter hundreds more stores, said the source, who was not authorized to speak publicly about the situation. A bankruptcy filing is expected as early as Wednesday.
Blockbuster Inc.’s chief financial officer has left the struggling home video rental chain with a possible bankruptcy filing looming.
Thomas Casey’s last day as CFO was Saturday, according to documents filed with the Securities and Exchange Commission. His departure came a few days after renegotiating the terms of his severance package. The revisions qualified Casey for a lump-sum payment of $100,000, besides money owed for his unused vacation. He will also receive $7,000 to cover moving expenses, according to the SEC filing. Casey had been Blockbuster’s CFO for three years. Blockbuster hired Dennis McGill as its new CFO. McGill formerly was CFO of Safety-Kleen Systems Inc.
Icahn takes debt
The 74-year-old Icahn led a proxy fight in 2005 that led to him and two of his nominees being appointed to the Dallas-based chain’s board. Icahn resigned from the board in January and in March reduced his 16.87 percent stake to 3.5 percent by selling 13.2 million Class A shares and 1.2 million Class B shares, according to a regulatory filing.
Icahn has remained close to Keyes even after leaving the board, says an official with knowledge of their dealings. Keyes joined the company in 2007 after Icahn sparred with then CEO John Antioco over pay, triggering Antioco’s departure.11