Movie Gallery seeks Chapter 11
Video rental giant Movie Gallery Inc. filed for bankruptcy protection Tuesday and indicated that it could close additional stores to save money, but said it had no plans to shake up management in the process.
Movie Gallery, the nation’s No. 2 video rental chain, sought Chapter 11 after months of struggling with debt from its purchase of rival Hollywood Entertainment Corp. for $1 billion in 2005.
The Dothan, Ala.-based company, which also has tried to fight off online competition, announced plans last month to close about 520 unprofitable stores, and said on its website that it might shut down stores during the reorganization.
It also said parts of the company might be sold.
Movie Gallery said Chairman and Chief Executive Joe Malugen and other managers would remain. Movie Gallery shares fell 7 cents to 21 cents. Shares sold for as much as $5.29 in the last year.
Movie Gallery reported a loss of $14.9 million in the first quarter compared with a profit of $40.3 million in the same period last year.
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