Yesterday in New York, the 25-year-old Blockbuster Inc. filed for bankruptcy after losing sales to Netflix Inc.’s Web and mail-order movie service and Coinstar Inc.’s Redbox DVD rental kiosks.
In the year 2009, the earnings of the Company dropped by 20% to $4.06 billion, after reporting a $558.2 million net loss.
As per a court document, Blockbuster has closed as many as 1,061 U.S. Company-operated stores in the last two years.
The Company said that all the U.S. stores, DVD vending kiosks, mail and digital will operate as usual.
Video rental chain, Blockbuster Inc. is reported to have filed for bankruptcy, following its approval to enter a pre-arranged deal with bondholders, in a view to recapitalize the firm by transferring the senior debt into equity.
The deal would assist in lowering the Company's debt by about $900 million.
Blockbuster, which offers online DVDs and movies, brought in the market its Android app. It is noteworthy that Company’s rival Netflix hasn’t launched its Android app yet.
This application will help the customers to hire or buy a variety of films that they want to watch on their mobile phone.
In order to activate the Android app, the users will have to register online on the Blockbuster website, blockbuster.com/activate/2 and not Blockbuster.com, because the later website will lead to a page, which will ask for a monthly fee to avail the service.
Blockbuster Inc. has proclaimed that there is a need for recruiting a chief restructuring officer in the company as soon as next week in order to manipulate the acquittal to the debt providers.
The appointment of the officer will help the company avail a tine period of six-weeks for paying off the debts worth $42 million.
The payment of the debts is likely to undertake job cuts, and austerity measures in the company.
Blockbuster Inc, the video game rental chain, revised its earnings forecast for the fiscal year 2009 downward, citing weaker-than-expected rentals and sales during the holiday season.
The Dallas-based company now expects adjusted earnings between $195 million to $205 million for the full-year to January 3, which represents a net loss in the range of 183 million to $193 million.
Previously, Blockbuster had expected earnings before interest, taxes, depreciation and amortization to be in the range of $270 million to $290 million.