Two months after closing seven video rental stores locally amid a changing entertainment market, Movie Gallery Inc. has said it will shutter its remaining stores nationwide and liquidate its assets.
A notice filed last week with the bankruptcy court in Virginia will mean the closing of six remaining Movie Gallery stores in Genoa, Waterville, Swanton, and Wauseon, Ohio, and Tecumseh and Morenci, Mich., and Hollywood Video stores in Monroe and Adrian.
The company said it would terminate its business operations after defaulting on a loan from one of its creditors.
In March, the company closed what it said were unprofitable stores in Bowling Green, Clyde, Lambertville, Perrysburg, Springfield Township, and two in Oregon.
An agreement filed with the court says the move to close more than 1,900 remaining stores is in the "best interests" of the company and its creditors. The agreement does not specify a time line. It is subject to approval by a bankruptcy judge.
The company, based in the state of Oregon, filed for Chapter 11 bankruptcy in 2007, when it closed hundreds of stores, and filed again in February. It had faced competitive pressure from movies-by-mail service Netflix, DVD kiosk company Redbox, and delivery of movies and TV shows over the Internet.
Digital Entertainment Group, an industry trade group that tracks consumer spending habits, said that DVD-based entertainment revenues dropped in 2009 to $16.4 billion, the third straight year of declines.
The medium peaked in 2006 at $20.2 billion in revenues; the sales of digitally delivered media such as video on demand rose 31 percent last year to $2.1 billion.