Blockbuster to close 500 or more stores, restructure debt

Blockbuster Inc. said Wednesday that it will close at least 500 stores and is exploring ways to restructure debt.

Blockbuster has been working with Rothschild Inc. since February 2009 on financing and strategy, the Dallas-based company said. The company has total debt of $963.9 million, including leases.

The company closed 253 stores in January as more consumers turned to Coinstar Inc.’s Redbox movie vending machines and mail-order and online rental services such as Netflix Inc. Blockbuster, which licenses its name for rental kiosks owned by NCR Corp., said the partnership plans to add 7,000 additional such outlets this year.

“While we believe the future is bright, the next 12 to 18 months will remain challenging as we balance the secular decline of a single channel with the ascension of emerging channels; such as vending and digital,” said Jim Keyes, chairman and chief executive.

The company today also reported its fourth-quarter net loss widened to $434.9 million, or $2.24 a share, as revenue declined 18% to $1.08 billion.

The company said in January its 2009 loss would exceed analysts’ estimates because of a shortfall in holiday revenue.

Blockbuster fell 4 cents to 32 cents in extended trading. The shares lost 1.6 cents to 36.4 cents in regular trading.