The fate of Blockbuster UK appears to be ‘safe’ for the time-being, after the movie rental business was prized from administration following a buyout of the group by Gordon Brothers Europe, ending a 2-month period of uncertainty surrounding the brand in the region.
Gordon Brothers are a private equity group who have chosen to take on full ownership of Blockbuster UK ‘for an undisclosed sum’, in a deal believed to have guaranteed the safety of 264 stores in the British Isles (all of which will now run as ’business as usual’) and ’2,000 British jobs’, although it is precisely half of the stores that were present at the start of the year (528), and around 47% of the staff numbers at that point (4,190).
However, the brand will be full of praise for their new owners for preventing an even deadlier fate, and will now look to restrategise to avoid similar danger in the future for a company that has been in operation in the region since 1989. This will almost certainly need to include some sort of streaming presence, as rival movie rental platforms Netflix and Lovefilm operate in the UK market exclusively through online streaming.
Gordon Brothers Europe’s chief executive Frank Morton was confident of Blockbuster’s abilities, however, as he stated: “We know that we have a challenge ahead but there is still a market to be served. Blockbuster has a strong brand affinity and we believe that with the right mix of new product offering, new technologies, strategic management and marketing, we can bring new life to this high street staple.”
Lee Manning, who served as an administrator during the interim period, added: “Having identified a profitable core portfolio of stores we are pleased to have achieved this sale for creditors. Together with the previously announced store sales more than half of the original estate has been secured for ongoing use. This transaction provides Blockbuster a future in the UK and we owe a special vote of thanks to all the company’s employees, suppliers and customers for helping us rescue the business.”
However, the first move of the new owners might not be filling many with confidence, as Gordon Brothers recruited Gary Warren, an ex-’commercial director’ at fellow high street disc specialists HMV (a company who have experienced a similarly uncertain 2013) as Blockbuster’s managing director. Looking at the coincidences, the pressure is now on Warren to avoid being branded as one of the unluckiest omens in the home media industry…