Blockbuster Falls Into Administration As The Year Of Retailer Death Continues

Blockbusted

Blockbuster, the high street video and games retailer, has become the latest victim of the recession after going into administration.

Its decline means it is the third major retailer to fall into administration in 2013 - occurring days after Jessops and HMV closed their doors.

Blockbuster UK has 528 stores and 4,100 staff. Deloitte has been appointed as administrators. Deloitte is also acting for HMV.

Unlike HMV, Blockbuster has said it will honour gift vouchers.

Reaction to the news has been one of sadness, but not surprise.

Blockbuster is understood to have been struggling for a while, having come under pressure from more modern ways of accessing film and games content.

Services through streaming sites such as Amazon's Lovefilm, Netflix and Tesco's Blinkbox, as well as online retailers such as Amazon, have made the retail space for games, films and box-sets increasingly crowded.

Sales at Tesco's Blinkbox were up 220% in 2012 over the Christmas period, as an example. Michael Comish, chief executive of blinkbox, said in a statement on Tuesday: "A solid pre-Christmas movies and TV selection and the ever-growing consumer love affair with technology created the perfect storm.

"Tablets and games consoles have proven to be increasingly dominant platforms, with Smart TVs also showing significant signs of traction. We won't be complacent - great TV and movies aren't just for Christmas. We go into 2013 laser focussed on bringing the latest great entertainment with the flexibility of no subscription."

UPDATE: 14:55, 16 January, 2013

A statement from Deloitte published on Wednesday revealed that Lee Manning, Matthew David Smith and Neville Kahn, all partners at Deloitte, will be working as joint administrators to Blockbuster Entertainment Limited and Blockbuster GB Limited who trade as Blockbuster.

Manning said: "In recent years Blockbuster has faced increased competition from internet based providers along with the shift to digital streaming of movies and games. We are working closely with suppliers and employees to ensure the business has the best possible platform to secure a sale, preserve jobs and generate as much value as possible for all creditors.

"The core of the business is still profitable and we will continue to trade as normal in both retail and rental whilst we seek a buyer for all or parts of the business as a going concern. During this time gift cards and credit acquired through Blockbuster's trade-in scheme will be honoured towards the purchase of goods."

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