Blockbuster LLC announced that it will close its remaining stores and end its DVD-by-mail service by January 2014. Dish Network Corp. (Nasdaq: DISH) which owns Blockbuster, will shut down the last 300 company-owned stores and distribution centers, the company announced Wednesday, Nov. 6, in a press release.
Each Blockbuster store has eight to 10 employees, so the move is expected to cut about 2,800 jobs.
"This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment," Joseph P. Clayton, Dish's president and chief executive, said in a statement.
Dish Network purchased Blockbuster in April 2011 after the video-rental company went bankrupt. This was during a time when the industry saw a surge in movie streaming services and online video. Netflix (Nasdaq: NFLX) and Redbox, owned by Outerwall, Inc. (Nasdaq: OUTR) eventually became Blockbuster's top competitors as the company's sales steadily declined. Blockbuster's revenue fell to $120 million in the second quarter, less than half the $253.3 million it generated in the same period last year.
Blockbuster will continue its Blockbuster @Home services to Dish customers, as well as its Blockbuster On Demand streaming service. An additional 50 Blockbuster stores not owned by DISH will intentionally remain open for the time being. Dish will keep the licensing rights to the Blockbuster brand and use it to sell other services.
For more see:
This Dish Network press release
This CNN article
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