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Published: Tuesday, 4/10/2012 - Updated: 2 years ago

Liquidation under way for Monroe Street video store

BY JON CHAVEZ
BLADE BUSINESS WRITER
The Blockbuster Video store on Monroe Street is closing.
The Blockbuster Video store on Monroe Street is closing.
THE BLADE/JEREMY WADSWORTH Enlarge | Buy This Photo

Toledo's last Blockbuster Video store is in the process of closing, a move that will leave the area, which once boasted four video rental chains, with just one.

The video rental chain, which is headquartered in Texas and owned by Dish Network, had disclosed in its fourth-quarter filing that it planned to close more than 500 of its 1,500 domestic stores sometime in the first half of 2012.

But a company spokesman was reluctant to disclose whether the remaining Toledo store, at 4558 Monroe St., was in jeopardy.

However, the store's employees were notified at the end of March that the site would close. The store began a liquidation sale last week.

Blockbuster LLC said it intends to relocate as many employees as possible to other stores. But the closest two Blockbuster stores are in Fremont in Sandusky County and in Monroe.

As of early 2010 the video chain, which was founded in 1985, had six Toledo-area locations.

The company has struggled with $900 million worth of debt and a Chapter 11 bankruptcy in 2010 before it was acquired at auction by Dish Network in April, 2011.

The remaining area video chain is Family Video, based in Glenview, Ill. At one point, stores owned by Blockbuster, Movie Gallery, Hollywood Video, and Family Video were in the metro area.

Movie Gallery acquired Hollywood Video in 2005, then both filed Chapter 7 bankruptcy liquidation in 2010.

Wall Street analysts have cited increasing competition from video-by-mail companies such as Netflix, video kiosk rental firms such as Redbox, and online video-streaming companies as reasons for Blockbuster's struggles.

John Kobylanski, regional director of Family Video, said his company has proved that a video rental store concept can succeed if the strategy is executed correctly.

"The store concept is not dead. We plan to open 40 or 50 stores this year to get to the 800 mark," Mr. Kobylanski said. " We're looking at another record year of growth."

Where Family Video and Blockbuster differ is that the former is privately owned and the latter was a public company forced by shareholders to expand and possibly take on numerous unprofitable leasing deals, Mr. Kobylanski said.

"We've always been a low-cost entertainment value. We're privately owned and free to operate the way we need to. We like to be involved in communities and we own our own property. We probably have over $600 million in real estate," he said.

"They're involved in a public business, whereas we don't have to meet with shareholders," Mr. Kobylanski added.

"Blockbuster's problem was they took on a lot of debt they couldn't pay and they didn't position themselves well. And I think they got away from the core concept of just renting movies," he said.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.



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