Video and games rental company Blockbuster UK has called in administrators after internet competition led to a huge loss in sales.
The high street retailer, like HMV just two days ago, has appointed accountancy experts Deloitte to seek a buyer for all or part of the business.
The fierce competition from the rise of internet film rental services such as iTunes, LoveFilm and Netflix, have caused Blockbuster to struggle to stay afloat during the recession. With 528 stores and 4190 jobs at risk, Blockbuster will continue to trade until Deloitte can find a buyer.
As far as it is known, Blockbuster’s Dutch and American arms are still trading as normal.
After consumer outrage over now void HMV gift cards, Deloitte made a quick decision to still honour any Blockbuster gift cards and credit earned through trading in films, games and consoles in store.
“In recent years Blockbuster has faced increased competition from internet based providers along with the shift to digital streaming of movies and games,” said joint administrator of Deloitte’s Restructuring Services practice, Lee Manning. “We are working closely with suppliers and employees to ensure the business has the best possible platform to secure a sale, preserve jobs and generate as much value as possible for all creditors”, he added.
Blockbuster opened its first UK store in South London in 1989, but has had to close over 100 stores over the past few years due to financial difficulties.
The news about Blockbuster shows the devastating affect the internet is having on the British high street, especially as Blockbuster is the fourth store to enter administration after HMV, camera retailer Jessops who closed all its stores last week, and electrical chain Comet just before Christmas.