Blockbuster Continues to Struggle; September 30th Deadline
If you’ve been following our news surrounding Blockbuster for a while you won’t be surprised by their Q2 quarterly financial filings. While I don’t like to see any company have financial issues like this, for years Blockbuster has failed to evolve their business model and continued to charge ridiculous prices for movie rentals.
It’s not a fair fight: Blockbuster has been struggling with a huge debt for years while nimble competitors like Netflix and Redbox stole DVD rental market share. Blockbuster issued Q2 results that revealed increased losses, the closure of another 507 stores in the first half of 2010, renegotiated leases, and announced a temporary reprieve to restructure the debt payments before a September 30th deadline.
Blockbuster warned that even if they do recapitalize the debt, "It is possible that even a successful and efficient implementation of the recapitalization initiatives we are pursuing will require us to make a filing for protection under Chapter 11 of the U.S. Bankruptcy Code."