Blockbuster To Shut Shop In Canada, Leaves Wind Mobile In A Lurch

by Gaurav Kheterpal on September 1, 2011

It was meant to be a Blockbuster dream, but it has turned out to be a box office disaster. Though the Netflix vs. Blockbuster contest has been widely projected as a clash of the titans, the former seems to be inching its way towards pole position. It may be the ‘Netflix decade of movies’, but I strongly believe Blockbuster has thrown in the towel earlier than expected.

After more than two decades, Blockbuster Canada will be closing its doors and shutting down its stores. The receiver in charge of the bankrupt movie rental company is seeking a court order to shut about 253 locations and wind down the business.

The move is bound to impact WIND Mobile’s 100 kiosks located within Blockbuster Canada stores. Though the carrier says it “started thinking about backup plans months ago”, there is little doubt that Blockbuster’s demise will impact Wind Mobile’s retail distribution strategy.

Blockbuster’s Canadian unit had filed for protection from a New York bankruptcy court in May. Since then, Grant Thornton, the receiver in charge of the movie rental company has been busy consolidating operations and about 150 retail locations were closed in June. As many as 14 companies made offers to purchase Blockbuster, including Rogers, Bell, HMV Canada and Sobeys, but none of the proposals were acceptable to Blockbuster’s court-appointed receiver.

To be honest, I expected the sale to go through and I was surprised that secretive eleventh-hour negotiations failed to seal a deal. In fact, I believed Wind would aggressively pursue the deal as a part of its retain distribution channel is on the line. The carrier says it considered a draft proposal valuing the stores between about $25-million and $50-million. However, it was too “complicated” for the receiver and subsequently, the upstart wireless carrier didn’t even submit a formal bid.

“As a result, the receiver does not have a firm, binding offer that it can complete in order to obtain value in excess of the liquidation value of the company’s assets,” Michael Creber, senior vice-president at Grant Thornton Ltd., said in a report filed on Wednesday with Ontario Superior Court.

The remaining Blockbuster stores will be liquidated by Dec. 31, according to the receiver’s recommendation, allowing it to benefit from the heavy holiday shopping season. The hearing will take place on Sept 6

Perhaps, it’s a good case for Blockbuster Canada to go back to the VHS tapes on which it used to make money. What do you think?

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Written by: Gaurav Kheterpal. Follow TheTelecomBlog.comby: RSS,TwitterFacebook, or YouTube.

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Jen Schimanke September 1, 2011 at 10:37 am

Saying goodbye to Blockbuster will be bittersweet – it’s a bit strange to think we’ve reached the end of an era, and I will miss browsing the aisles, but I certainly won’t miss late charges. Progress was imminent in this case and it’s kind of shocking that Blockbuster started thinking of backup plans only a month ago.

Nick G September 1, 2011 at 1:54 pm

Very unfortunate for those employees who have been loyal all this time. And there’s been mentions that once Blockbuster Canada goes under, Blockbuster USA (Dish Network) might bring their stores here… So they are firing 2300 employees for the sake of bringing back the exact same product…

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