Blockbuster Buying Movie Gallery Assets?

An article in today’s Wall Street Journal says that Blockbuster Inc. is in talks with bankrupt Movie Gallery to buy some of the latters assets. It did not specify what assets Blockbuster wants to purchase.We would assume that it won’t take on Movie Gallery’s Hollywood Video leases. Blockbuster is already closing about one-fifth of its 5,000 stores around the world. The Journal says the movie-rental company hired a law firm and an investment firm to help it cut $1 billion in debt and remake itself into a business that can compete with mail-order service Netflix, kiosk-based-rental-outfit Redbox and digital downloads.However, one analyst quoted in the report says that if Blockbuster’s stores aren’t profitable and traffic doesn’t pick up by mid year, “we may just kiss this whole story goodbye.”Can Blockbuster change its situation, or is the outfit doomed to fail?ALSO: Walmart’s Sales Are Down…The Recession Is Over!