Movie Gallery Assesses Leases

DOTHAN, AL-Movie Gallery has hired Hilco Real Estate to restructure the leases at about 1,100 of the entertainment retailer’s stores. The deal does not include an initiative announced by the company’s management last month to explore subleasing opportunities at 2,200 of its 4,800 stores.

“This program, together with our previously announced subleasing program, represents our on-going initiative to restructure approximately 70% of the company’s real estate portfolio,” says Keith A. Cousins, Movie Gallery’s executive vice president and chief development officer, in a statement. “We anticipate that these efforts will significantly improve our operating results and enhance shareholder value.”

Movie Gallery executives have already stated that they plan to close at least 100 stores this year, on top of 64 that were shut during the company’s fourth quarter, which ended Jan. 1. The last round of closures were due to store duplications as a result of the retailer’s acquisition last year of Hollywood Entertainment’s more than 2,000 units.