Movie Gallery files for bankruptcy again; closing 31% of stores
Summary.... The number-two rental chain in the US, like Blockbuster which leads it, is feeling the pain of the debt it took on to achieve its market position; again filing for Chapter 11 bankruptcy protection less than two years after emerging from its previous reorganization. Movie Gallery will immediately close 760 stores and may eventually close another similar number if they cannot be made profitable following restructuring and new initiatives, such as $1 rentals of catalog titles for preferred customers. We think there's still a place for bricks-and-mortar rental outlets, though the bloodletting may not be over for some time to come as competition from newer rental models and other forms of media consumption continue to grow.