Blockbuster names former 7-Eleven chief as its new CEO and chairman

Blockbuster Inc. on Monday named James W. Keyes, former president and chief executive of 7-Eleven Inc., as chairman and CEO of the struggling movie-rental company.

Keyes, 52, replaces John F. Antioco, who announced in March that he would leave by the end of the year after nearly a decade leading the Dallas-based company.

Blockbuster has been fighting for survival as consumers increasingly look online to companies such as Netflix Inc. for movies.

“As the technology continues to evolve, it will be my job to have Blockbuster front and center as a player in those areas of technology,” Keyes said.

Keyes, who was with 7-Eleven for 21 years, retired when the convenience-store chain was sold in 2005 and has since served as chairman of Key Development, a private investment company.

In May, Blockbuster said its first-quarter loss widened because of a soft market for movie rentals and heavy spending on its online-rental program, which now competes with Netflix.

Last fall, Blockbuster introduced its Total Access plan, which gives its online subscribers the option of returning DVDs to a store instead of through the mail to obtain another movie more quickly.

“They created this Total Access carrot where you’re getting people into the stores; now you need them to spend money,” said Rick Munarriz, a senior analyst for the Motley Fool, a finance website.

“The big problem with Blockbuster is it can’t become the place where people go to get movies,” he said. “That’s a dying business model if you look at it in that sense.”

He said that Keyes was a good choice for Blockbuster because of his retail experience.

“I don’t know if Blockbuster can be saved, but if it can, it will be with someone like this,” Munarriz said.

Blockbuster has more than 8,000 stores worldwide, including about 5,000 in the U.S. The company said last week that it would close 282 U.S. stores this year, which Keyes described as a normal progression for a major retailer.

“The stores themselves remain one of Blockbuster’s strongest competitive advantages,” Keyes said.

Netflix settled a patent-infringement lawsuit against Blockbuster last week, ending an attempt to slow the growth of Blockbuster’s online business. Terms were confidential.

Keyes, who has a three-year contract, will receive an annual salary of at least $750,000 and a bonus of at least $500,000, according to a regulatory filing with the Securities and Exchange Commission.

Keyes will also be issued $3 million in shares that will vest in full on the third anniversary of his start date. Keyes also agreed to buy $3 million in shares within 30 days after starting at the company.

Shares rose 15 cents to $4.46 on Monday.