Blockbuster Planning to Close Nearly 1,000 Stores

The days of a Blockbuster on every corner may be coming to an end: the company is planning to close nearly 1,000 "unprofitable" stores by the end of 2010.

In a filing with the Securities and Exchange Commission, U.S. video rental firm Blockbuster has outlined plans to close nearly 1,000 "unprofitable" store locations by the end of 2010. The closures include 380 to 425 "normal" store closures slated for 2009 and 2010, along with an additional 430 to 535 "accelerated" store closures over the same period—with the bulk of the accelerated closers slated for 2009. In addition, Blockbuster is eyeing converting some full-fledged stores into outlets; all told, as nearly 1,600 Blockbuster locations may close or change their status by the end of 2010.

Blockbuster currently operates over 4,300 retail locations around the United States. According to the regulatory filings, some 18 percent of those stores are unprofitable and another 47 percent are somewhat profitable, while the core of the company’s retail profits are coming from just 35 percent of the company’s "core" locations.

While Blockbuster eyes closing retail locations, it is also attempting to ramp up its rental operations outside retail stores, including rent-by-mail operations, retail kiosks, and Blockbuster On-Demand online rental operations. Blockbuster has faced serious competition from Netflix, and is also going up against kiosk-based video rental operation Redbox.