Movie Gallery is undergoing massive restructuring under Chapter 11 bankruptcy protection. The Dothan, Ala., company, which rents adult titles, hoped to emerge from Chapter 11 in early 2008, according to the Wall Street Journal.
Movie Gallery, which operates more than 4,600 video rental stores in the U.S., Canada and Mexico, has been facing performance issues since acquiring competitor Hollywood Entertainment in 2005.
After late and missing payments to its creditors, the movie rental chain filed for bankruptcy protection last fall. The company is restructuring in order to turn itself over to its principal lender, Sopris Capital Advisors.
The store closures will affect both the Movie Gallery and Hollywood Video-branded stores.
After the closures, more of which may be on the way, Movie Gallery will operate approximately 3,500 locations. The company is working with Los Angeles-based Great American Group to liquidate its inventory.
