Usually, in hard economic times such as the Great Depression, Americans go to the movies for entertainment. However, this past recession did not mean very good times for many video rental stores. Now, America's second largest video store chain, Movie Gallery and Hollywood Video are closing all of stores under chapter 11 bankruptcy liquidation. 2,700 Movie Gallery stores will close, and 1,300 Hollywood Video stores will be closing in the U.S. as well. In addition, in Canada, more than 200 Movie Gallery and 60 VHQ video stores will likely be affected, and possibly close as well.
Movie Gallery and Hollywood Video were once one of Oregon's largest national corporate business enterprises, centered in Wilsonville, Oregon. The company boasted sales of over $2.54 billion in recent years, but lost around $25million a year as customers just didn't rent videos in the numbers required for the company to be profitable.
Online services to acquire videos, Netflix, Redbox and other competition seems to have given Movie Gallery and Hollywood Video more competition than they could handle, despite some great deals that Hollywood Video always offered.
Around 45,000 employees are expected to lose their jobs as the company liquidates over the next eight weeks.
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