Blockbuster to close 182 stores by early 2011
Dallas –Blockbuster said in a Friday filing that it plans to close 182 stores in the next few months as part of the movie rental company’s move to get its business back in shape in bankruptcy court.
Blockbuster, which filed for Chapter 11 bankruptcy protection in September, has already closed more than 1,000 underperforming stores in the past two years. It had about 3,000 stores when it entered bankruptcy.
Originally, the company planned to keep the stores operating, but analysts anticipated hundreds of stores would eventually shut their doors.
The company revealed in documents filed in Manhattan bankruptcy court on Friday that it plans to close 72 stores before the end of the year and another 110 stores in the first few months of 2011. The store locations weren’t disclosed.
Blockbuster also said in the documents that it is renegotiating leases on stores it is looking to keep open.
Blockbuster is expected to emerge from bankruptcy protection later in 2011 under new owners led by billionaire investor Carl Icahn.
A winning wish for kids
The small ad was a little lost on the bottom of page 36 of Target’s 40-page holiday circular this week, but there among an offering of floor care products was a reminder of a Facebook initiative that could be worth as much as $50,000 to the Kids In Need Foundation. The ad encouraged readers to visit Facebook.com/TargetGiveJoy to create a wish list of up to five items for a chance to win a gift card equal in value to those items with Kids In Need receiving a $5 donation for each wish list submitted up to a total of $50,000. The program ends at midnight on Christmas.
Target is the national sponsor of Kids In Need Teacher Resource Centers, a network of 25 facilities nationwide that provide free school supplies. The Give Joy Facebook initiative was a month long effort that involved a different charity each week. Beginning on Nov. 28, Target featured St. Jude Children’s Research Hospital, followed by the Salvation Army, First Book and now Kids In Need.
Toys under pricing scrutiny
Competition in the toy category is intense every holiday season, but it seems to have been ratcheted up a few notches this year, and Target was one of the companies doing the ratcheting. The company’s aggressive pricing moves put it in close proximity to Walmart early in the season and more recently Target’s toys were less expensive than Walmart’s, according to a pricing survey conducted by Citigroup retail analyst Deb Weinswig.
“Target has promoted a consistent value message throughout the season and we believe the company has the lead as we approach Dec. 25,” Weinswig wrote in a research report last week. “We performed our third toy pricing survey of the season and for the first time, Target was priced lower than Walmart on our basket of toys, even without including the 5% rewards discount!”
Weinswig noted that Target had narrowed and reversed the pricing gap with Walmart over the course of the holiday season to the point where Walmart’s basket of toys is now 70 basis points more expensive than Target’s compared to 180 basis points cheaper when the survey was first conducted on Oct. 21.
“Also, if you apply Target’s 5% Rewards discount, the basket becomes 600 basis points more expensive at Walmart versus 340 basis points pricier in our 1st survey,” according to Weinswig.
Walmart’s toy pricing has been the subject of considerable scrutiny this season with Eric Johnson, director of the Center for Digital Strategies at Dartmouth’s Tuck School of Business, calling the company a non-player in the toy category in a Bloomberg article.
“Most of their hot toys are out of stock and the stuff that is there is not low-priced,” Johnson was quoted as saying in the Bloomberg article on price adjustments that took place at Walmart following Thanksgiving weekend.