Blockbuster U.K. Sold to Investment Firm
Gordon Brothers will acquire 264 video and game rental stores two months after the company filed for insolvency protection.
LONDON -- Investment firm Gordon Brothers Europe has agreed to acquire the British business of video and video game rental store chain Blockbuster.
Financial terms weren't disclosed.
Blockbuster U.K. in January filed for bankruptcy protection and hired accounting firm Deloitte as an administrator to look for a potential buyer. The filing came a day after a similar move from British music and film retailer HMV.
Under so-called administration, Blockbuster U.K. continued operating under the oversight of Deloitte.
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 a bankruptcy auction in early 2011.
Blockbuster U.K. told customers in a blog post over the weekend: "We’re delighted to tell you that after several difficult weeks, Blockbuster U.K. has been bought by Gordon Brothers Europe."
Gordon Brothers, known as restructuring specialists, said in a statement that it would continue to operate the firm's 264 remaining stores in Britain, which have about 2,000 employees.
"Having identified a profitable core portfolio of stores, we are pleased to have achieved this sale for creditors," said administrator Lee Manning. "This transaction provides Blockbuster with a future in the U.K."
At the start of the year, the company owned more than 500 stores with about 4,190 staffers. Deloitte has closed about 200 and sold a few to a supermarket chain.
Gordon Brothers said it would invest in Blockbuster and enhance "the customer experience through the use of new product offerings, new technologies and better basic retailing."
Gordon Brothers CEO Frank Morton highlighted continued challenges of the video rental business in the digital age. "We know that we have a challenge ahead, but there is still a market to be served," he said.
Former HMV U.K. and Ireland commercial director Gary Warren has been appointed as managing director of Blockbuster U.K.