Blockbuster U.K. Enters AdministrationBy: Sean Patterson - January 16, 2013
Coming just one day after U.K. electronics retailer HMV announced it would seek administration, auditing firm Deloitte has announced that it has been commissioned to administrate Blockbuster U.K. Deloitte was also mentioned as a possible administrator for HMV.
Deloitte claims that Blockbuster U.K.’s “core” business is still solid. A buyer for the company’s 528 stores across the U.K. will be sought. Blockbuster U.K. currently employs 4190 people.
Unlike HMV, which suspended trading of its stock on the London Stock Exchange, Blockbuster stock will continue to trade normally. Deloitte also made a point to assure customers that all gift cards will be honored.
“In recent years Blockbuster has faced increased competition from internet-based providers along with the shift to digital streaming of movies and games,” said Lee Manning, a Deloitte partner and one of the people assigned to jointly administer Blockbuster U.K. “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.”
Blockbuster U.K. is just another in a line of British retailers of physical media to run into financial trouble. In addition to HMV, GameStop closed its stores in the U.K. last year and Game Group entered administration in March of last year. These failures are almost certainly a sign of things to come in the U.S. and the rest of the world, as media consumption shifts from physical discs to downloadable and streaming options.