Blockbuster Gets Bought Over
Although it is believed the deal will mean stores will be kept open and staff still employed, no one can say for sure how long that will be the case.
Frank Morton, CEO of Gordon Brothers Europe said,
“We are delighted to announce the acquisition of Blockbuster. We acknowledge the industry is in transition; we know that we have a challenge ahead but there is still a market to be served.
“Blockbuster has a strong brand affinity and we believe that with the right mix of new product offering, new technologies, strategic management and marketing, we can bring new life to this high street staple. We look forward to working with employees, suppliers, landlords and other stakeholders to make this happen.”
Gordon Brothers Group is specialised in buying companies or brands which have the potential to be profitable but need some investment or a change of strategy.
According to Access Web Solutions director Craig, the problem Blockbuster had was too many overheads compared to it’s competitors, he said,
“Blockbuster has more staff, store costs and general overheads per-customer than companies making more money by keeping their business online.
“The market clearly shows there is little need for Blockbuster to have so many staff or stores when it’s more convenient to have it as an online-only business.”
However after the deal was agreed for an undisclosed sum, Blockbusters administrators Deloitte said at least half of the stores will still be used.
Joint administrator Lee Manning said,
“Having identified a profitable core portfolio of stores we are pleased to have achieved this sale for creditors. Together with the previously announced store sales, more than half of the original estate has been secured for ongoing use.”
Companies such as Netflix and Itunes have managed to revolutionize the video, music and game rental market by making it cheaper and easier.
Customers can now buy and watch a film without having to leave their home or return it a few days later, making it more competitive than Blockbuster or similar stores.