Movie Gallery Closing 520 Stores Nationwide
Joe Malugen, chairman, president and CEO of Movie Gallery, said the closure of the "underperforming and unprofitable" stores should reduce costs and help get the company back on track financially.
"Closing these stores was a difficult but necessary decision to help protect the future of this company," he said. "These stores are being closed after evaluating a number of factors, including store profits and the terms of the leases at each location."
The company has 4,000 remaining stores that, according to Malugen, "have a stronger operating performance and prospects for future growth."
The closures are the latest move in a restructuring effort that has included extension of debt agreements in August and the resignation of Movie Gallery's chief development officer on Sept. 18. Movie Gallery incurred an estimated $1 billion in debt after buying the Hollywood Video chain in 2005.
Movie Gallery has retained outside professional services firm Great American Group to conduct sales of the inventory at the closing stores. Great American oversaw the liquidation of Tower Records stores in 2006.