New closings: Solution to Oversaturation?

[Ghost of AtlanticVamp]

Since the announcement of more closings, I kind of blew it off. After all, analysts predicted our demise twice this year: once at the beginning of the year with the infamous "15 businesses that won't make it past 2009" article, and again with the refinancing situation in August. But when my DM came for a visit and told me about another closing in our nearest metro area, Jacksonville, FL, I was taken aback.

But then, I did a search online, and noticed something very interesting.

I looked up Jacksonville, FL's Blockbusters: currently, ten stores. One is closing in October, so down to nine.

I got curious as to how they might weed out over a thousand stores, so I Googled for Blockbusters in other major cities in their "proper" area, and this is what I found. ("Proper" meaning that specifically to their actual area, not suburbs or surrounding cities.)

1. New York, NY: 10 stores, all clustered on Manhattan* (*note: I didn't look for Brooklyn, Queens, Harlem, etc.)

2. Atlanta, GA: 10 stores, again, in Atlanta proper, not looking at suburbs or surrounding metro---all within just a few miles of each other

3. Los Angeles, CA: 10 stores, just in LA proper

4. San Francisco, CA: 10 stores, again SanFran proper, not in surrounding areas---all clustered close together

5. Dallas, TX: 9, not counting corporate headquarters, and only in Dallas proper

6. Minneapolis, MN: 9

7. Milwaukee, WI: 10 and all within blocks of each other on Lake Michigan!

8. New Orleans, LA: 7 and all within blocks of each other, but did have 10 before recent closings.

9. Miami, FL: 8 in Miami proper

10. Detroit, MI: 10 (includes Dearborn and Grosse Pointe)

This went on for a while, as I continued through Phoenix, AZ; Philadelphia; Pittsburgh; Charlotte, NC; Nashville, TN; and various other metros. What I noticed was every major metro has or has had ten locations in their "proper" area. More important is that a lot of those locations were almost atop each other, within miles or even blocks of each other. It was a real saturation point in some cases. For instance, in Jacksonville, we literally passed three or four to get to our meetings in yet another store, in a span of about five miles. In other cases, such as the New York area, Google search revealed that while 10 were in Manhattan, another five popped up in Brooklyn, and another 8 or 9 in Queens. Ten in San Francisco were surrounded by ten in Berkley, ten in Sacramento, and eight in Bakersfield. There are nine in Las Vegas, ten in Reno/Sparks, 6 in the Tahoe area.

What I'm trying to say in this rant is this: When you factor in that many stores in one city or county, and they're talking about closing 1000+, it averages out to closing maybe half of those in the metro areas. While that's still not good---and I don't advocate anyone losing their job, especially me---it still doesn't spell the end of the company. If they're doing what they say they're doing, which is to not renew expensive lease agreements and closing low profit stores, it makes good financial sense. When you also factor in letting overseas stores go franchise, and closing those on ending leases there, it actually pans out very well for U.S. Blockbuster locations. The money for advertising, product, labor and overhead are more concentrated on remaining stores.

I say this with a some trepidation, considering that I live in a county with only two and one of them is a very low profit store. One just got there in the past eight years, while the other has been in that location, between franchise and corporate, for almost twenty years. (Hopefully, they're going to stick with the more established one, as it's my home store.)

It's just a theory, and I'm mostly just thinking aloud, but this might be how they handle it. If I'm wrong, then I'm wrong.

Thoughts?

[johnlow71]

youre so smartttttttttttttttt

yea in my area we have 9 make that 8 store and i already have inside word on 2 more closing shop soon. my store wont be as we make tons of money and our rent is low being a small store. i guess its true good things really do come in small packages

[BUYMECAR]

phoenix here. i can only think of 2 stores in my district that they would let close...the rest make too much money.

ooh, can't wait! they have so much BSI we need!

[jwspice]

Originally Posted by Ghost of AtlanticVamp

Since the announcement of more closings, I kind of blew it off. After all, analysts predicted our demise twice this year: once at the beginning of the year with the infamous "15 businesses that won't make it past 2009" article, and again with the refinancing situation in August. But when my DM came for a visit and told me about another closing in our nearest metro area, Jacksonville, FL, I was taken aback.

But then, I did a search online, and noticed something very interesting.

Been searching all over for closing in generalized locations. Can you give me a heads up where you found the stats? I've been googling all over the place. Did they have specific locations?

[djblade]

Has this "Blockbuster is closing stores" effecting sales? like selling rewards?

[Ghost of AtlanticVamp]

Originally Posted by jwspice

Been searching all over for closing in generalized locations. Can you give me a heads up where you found the stats? I've been googling all over the place. Did they have specific locations?

Put Blockbuster (your city, your state; Los Angeles, CA, for example) into Google. It will bring up a small map and "pins" on it representing where the stores are located, along with a listing that ends with a link to more stores.

[Ghost of AtlanticVamp]

Originally Posted by djblade

Has this "Blockbuster is closing stores" effecting sales? like selling rewards?

Sorry to double dip...but...

I have actually been working in a store in which the only other competition besides the beloved RedBox was Movie Gallery. Now, Movie Gallery in that town is closing. People have been flocking back, at least in that store. Most of our Rewards sales have been renewals from people who left angry once upon a time, and are now back.

See? It's not just us.

[empbal]

May as well post this here, too:

2009 Normal Closures
280-300

2009 Accelerated Closures
300-385

2010 Normal Store Closures
100-125

2010 Accelerated Store Closures
130-150

Total Stores Closures
810-960

Stores w/additional lease mitigation/termination efforts
275-300

Stores that may be converted to outlets
250-300

Total store closures and other actions
1,335-1,560

http://www.sec.gov/Archives/edgar/da...744/dex991.htm



This is sort of interesting, too: http://yahoo.brand.edgar-online.com/...y7eWHsaa9aWUz7
It compares the different services, their costs, and present/future states

[KAWLIGA]

Excellent.....

"Who is more fool?...The fool or the fool who follows the fool"?

[zooworker]

Originally Posted by Ghost of AtlanticVamp

Sorry to double dip...but...

I have actually been working in a store in which the only other competition besides the beloved RedBox was Movie Gallery. Now, Movie Gallery in that town is closing. People have been flocking back, at least in that store. Most of our Rewards sales have been renewals from people who left angry once upon a time, and are now back.

See? It's not just us.

Actually, i work in a district that has already closed 6 stores. Our TNR has shot way up making us very profitable and one of the top stores in the region.