Blockbuster UK Seeks Insolvency Protection, Buyer
LONDON -- DVD and video game rental firm Blockbuster UK said Wednesday that it has filed for insolvency protection, a day after iconic British music and film retailer HMV did so.
Blockbuster UK has 528 stores and about 4,190 employees, according to the company. It will go into so-called administration, which will allow its business to continue operating under oversight of accounting firm Deloitte. The administrator will help the company explore its options for reducing costs, including layoffs, or a possible sale.
The U.K. business is legally separate from the parent company's Blockbuster U.S. business, which went into Chapter 11 bankruptcy a few years ago, with Charlie Ergen's Dish Network beating out activist investor Carl Icahn in an auction in early 2011.
"In recent years Blockbuster has faced increased competition from Internet-based providers along with the shift to digital streaming of movies and games," Deloitte said. "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."
It added: "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."