Hastings files for bankruptcy

Hastings Entertainment has filed for Chapter 11 bankruptcy and plans to close stores and sell assets in order to fund further operations.

Finding a buyer is an urgent matter for Amarillo, Texas-based Hastings, which only has enough money to fund operations through the middle of July, according to court documents.

The company asked the court for permission to continue with the planned closure of 40 MovieStop locations. Hastings operates a total of 123 stores in 19 states.

Hastings blamed the growth of digital media and online sales models for its current predicament as sales of multimedia entertainment have moved to the internet.

"We have made significant progress with our remerchandising strategy and with other initiatives aimed at increasing profitability," management wrote in a note to customers on the company's website. "However, these challenges combined with the financial strain caused by the MovieStop and SPImages acquisitions, weakened our balance sheet to a point where we do not have the necessary cash on hand to continue operating our businesses or refresh all of our stores on a timely basis without new sources of financing."

"A sale process, facilitated by Chapter 11, will help us determine how we can best maximize the value of our assets for the benefit of our stakeholders."

Hastings has 20 "refreshed" locations and is hoping that a buyer will emerge to fund a continuation of that program. 

For more:
- see this Hastings announcement 
- see this Star Telegram story