Movie Gallery was formed in 1985 by Joe Malugen and Harrison Parrish in Dothan, Alabama. Through its wholly-owned subsidiary, M.G.A., Hollywood Video declared bankruptcy in February 2010 and announced that it would shut down three months later.the company’s founders began operating video specialty stores in southern Alabama and the Florida panhandle, and franchising the Movie Gallery store concept. By June 1987 the company owned five stores and had a franchise operation of 45 stores. In 1988, the company began to consolidate the franchisees into company owned stores. By 1992, 11 of the United States Bankruptcy Code, according to the company’s Website. … of 760 Movie Gallery, Hollywood Video and Game Crazy store locationsThe company had a total of 37 stores and annual revenues of $6 million.
In August 1994, the company completed an initial public offering of its stock. With the proceeds from this offering, the company began to quickly complete acquisitions of various video chains, primarily in the southeast. In early 1995, the company raised additional public funds and continued the acquisition and development of stores. By the middle of 1996, only 22 months after beginning its aggressive expansion strategy, FYI…. The following companies just filed for Bankruptcy: Hollywood Video Levitz Sharper Image Performance Team Freight Linens n Things Circuit CityMovie Gallery had grown to over 850 stores through over 100 separate acquisitions.
In 1999, Movie Gallery announced plans to build 100 new stores. The company completed an 88-store acquisition of Blowout Entertainment in May, and ended the year with more than 950 locations in 31 states. In 2000, Movie Gallery again set its goal at opening 100 new stores and relocating 25. This goal was surpassed.
The company moved forward with its largest single-chain acquisition to date, expanding its base of stores by 30%, in late December 2001. This addition of Video Update stores to the Movie Gallery family launched the company’s international presence with 100 retail locations in Canada. 3 May 2008 … Which of the following retail stores have filed for bankruptcy? > Hollywood Video > Levitz > Sharper Image > Performance Team FreightFollowing the completion of the Video Update acquisition, Movie Gallery achieved the 2,000 store mark in 2003.
In 2005, the company completed the largest acquisition to date with the Hollywood Entertainment merger. Performance Team Freight File For Bankruptcy · File Bankruptcy. The Web’s most remarkable stories, determined by people like youThis combination of companies increased the store total to 4,700 with revenues in excess of $2.5 billion. In addition, Movie Gallery opened 61 new stores in Western Canada with the acquisition of VHQ Entertainment.
[edit] Movie Beam
MovieBeam was a set top service offered in larger cities in which customers could download movies to a set top box. Most movies expired within 24 hours. The company was originally founded by Disney and other investors as an alternative to online movie downloads. A special set top box had to be purchased by consumers for the service. Most major movie studios provided New Release content to the service. MovieBeam was shut down on December 15, 2007.[4] As of June 2008 Movie Beam was sold to an outside investors group for approximately $2 million as part of the company’s restructuring. All in-store kiosks for the service have been removed as well.
[edit] Hollywood Video
Hollywood Video logo.
A typical Hollywood Video store
Hollywood Video store in Laredo, TexasHollywood Video, a subsidiary of Movie Gallery, Inc. operates from Wilsonville, Oregon, as a DVD and video game rental shop chain in the United States. It was started in 1988 by former CEO Mark Wattles and his wife. The chain was the largest direct competitor of Blockbuster Video until it was purchased by Movie Gallery in 2005. Hollywood Video declared bankruptcy in February 2010 and announced that it would shut down three months later.[5]
[edit] Purchase of Hollywood Video
Hollywood Video was the target of a hostile takeover attempt, initially announced at the end of December 2004 by competitor Blockbuster Video. In February 2005, Blockbuster announced an exchange offer of $14.50 per share ($11.50 cash and $3.00 in Blockbuster shares).[6]
In order to create a stronger position against the hostile takeover, Hollywood Video agreed to a buyout on Monday, January 10, 2005 by its smaller competitor Movie Gallery. Movie Gallery paid $860 million, $13.25 per share, and the assumption of $380 million in debt. Stocks closed at $13.85 on January 10 after these news. Blockbuster then dropped its purchase plans, citing anti-trust concerns. Movie Gallery completed its purchase of Hollywood Video on April 27, 2005.
[edit] Downfall
The company began having financial difficulties and announced the closure of 520 stores in September 2007.[7] At the time Movie Gallery had about 4,500 locations.[7] The next month, the company filed for Chapter 11 bankruptcy protection under the U.S. Bankruptcy Code.[8][9] Due to these troubles, the stock price dropped below $1 per share at were removed from listing on the NASDAQ stock exchange in November 2007.[10]
An additional 400 stores were scheduled to close during the bankruptcy reorganization.[11] MovieGallery emerged from Chapter 11 in May 2008[8] and appointed C.J. Gabriel, Jr. as the new chief executive officer. Founder and former CEO Joe Malugen continued to serve on the Movie Gallery Board of Directors until leaving on July 30, 2008.[12] The company relocated its headquarters to Wilsonville, Oregon, (home of the Hollywood Video subsidiary) in late 2008.[13][14][15] In January 2009, they closed their Wilsonville distribution center.[15]
Early 2009, Movie Gallery operated about 2,700 Movie Gallery and 1,300 Hollywood Video locations in the United States.[16] Canadian operations include over 200 “Movie Gallery” branded stores, as well as approximately 60 under the VHQ brand in western Canada.
Movie Gallery’s stock fell from $1.25 at close in October 2009 to $.05 a share at close on December 3, 2009,[17] and many locations fell behind on rent.[18] Movie Gallery hired restructuring firm Moelis & Co. on December 15, 2009, meaning that it will have a 30-day grace period to renegotiate with lenders and landlords, or it may be forced into bankruptcy a second time.[19]
On February 1, 2010 stores received a report stating that about 800 stores were to be shut down. The company hired the law firm of Sonnenschein, Nath & Rosenthal to prepare for a second filing of bankruptcy,[20] and on February 3, 2010, they filed for Chapter 11 bankruptcy protection.[21]
During a company-wide conference call on April 30, 2010, it was announced that all US Hollywood Video, Movie Gallery, and Game Crazy stores would begin the liquidation process in May 2010.[2] Stores would stay open for up to eight weeks after liquidation begins, and the status of the company’s Canadian stores was not yet known.[2]