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DVD/games rental chain Blockbuster calls on administrators the second time

DVD and games rental chain Blockbuster UK is set to go into administration for the second time in 10 months after its private equity owner failed to turn the business around.

The company had called the administrators a first time in January, before being bought by private equity firm Gordon Brothers Europe for an undisclosed sum two months later. Loss-making Blockbuster employs 2,000 people at 264 stores nationally.

Restructuring the business, investing in marketing and renegotiating with landlords was not enough. Gordon Brothers said it had also tried to develop a new digital platform, but was unable to broker a licensing deal with Blockbuster UK's parent company in the United States.

These developments came as Blockbuster had relaunched its loyalty scheme from being a 'predominantly online' rewards initiative to a multichannel programme. The Blockbuster VIP Rewards programme allowed Blockbuster members to earn points when they shop at the company's remaining 260 high street stores, its website and the recently re-launched online Blockbuster Market.

Restructuring specialists Gordon Brothers, which previously worked with fashion retailer Republic when it went into administration, said the months since the acquisition of Blockbuster have also coincided with a period of poor trading performance across both rental and retail sales, adding that the need to reduce costs whilst a buyer is sought will result in 32 redundancies at Blockbuster UK's head office.

All the stores will continue to trade while a buyer is identified.

Story filed 30.10.13

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