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Tuesday, 29 October 2013

Blockbuster to go into administration again!

10 months on and Blockbuster UK will be put into administration by its latest owner, Gordon Brothers Europe, following an intention to appoint administrators filing.   They said that the turnaround plan had failed. It seems that the problems stem from the fact that they were unable to agree a proper digital licensing deal with the US parent company, problems agreeing rental terms with the landlords, and disappointing trading.

Perhaps the Landlords were less optimistic of a recovery than the owners and were seeking guarantees from the parent company. In addition, it has been reported that they are taking a harder line against companies that wish to restructure by opposing CVAs and pre packs.  However it should be remembered that the insolvency laws have not changed and landlords position is much as it was when dealing with a struggling company.

The company has already been trimmed from employing 4200 people to 2000 following the last administration.  The collapse of the business is response ultimately due to the changing habits of buying entertainment which have increasingly switched to online.

Many of the existing outlets are to remain open while a buyer is sought.  There must be some value for the brand if it were to move online?  But it is becoming a crowded market place with Blinkbox, BT, Virgin media, Sky, Lovefilm, Netflix, and others all selling and renting movies online

We are not involved in the administration but according to reports in the FT, Moorfields are expected to be appointed.

If you are an employee of the business and are worried, then please listen to the video below as it will tell you your rights as an employee of a business that is insolvent.  There is a link at the end of the video to the Government website which expands further on what you need to know.

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