Movie Gallery Weighs Closures

DOTHAN, AL-Movie Gallery executives plan to close about 100 stores this year but could shut more, they said during their fourth-quarter conference call. “We will continue to evaluate the possible closure of stores as market conditions warrant,” says Joe Malugen, the company’s chairman, president and chief executive officer.

During the fourth quarter, which ended Jan. 1, the retailer shut 64 stores where there were duplications of units as a result of the company’s acquisition of Hollywood Entertainment’s more than 2,000 stores a year ago. This year, the company, which operates about 4,800 stores, also plans to open 140 units.

Movie Gallery’s quarter was marked by deep losses and drops in sales. Year-over-year same-store sales plunged 8.6%, and the company’s net loss totaled $546.5 million, due to a $527.9-million non-cash impairment of goodwill, and other factors. Executives blame weak sales on last year’s less-than-stellar performance last year by movies at the box office.