Dish Network Corp. (NASDAQ:DISH) Network announced its plans, this week, to close 300 stores. It’s been a trend for more than a decade now, and more Brick-and-mortar Blockbuster retail stores are disappearing.
A company spokesman said about 300 Blockbusters outlets will be closed in coming weeks, which will leave about 3,000 employees with jobs. The specific locations of stores have not been revealed yet, but most of the closed stores will be under-performing stores or those nearing the end of their lease. After this, only 500 stores will remain, of which 26 are located near Dish’s Colorado headquarters.
Dish acquired the once-popular video rental chain out of bankruptcy for $320 million in 2011, at that time it had 1,700 physical stores and a streaming service. Dish Network Corp. (NASDAQ:DISH) still believes in the brand saying “we continue to see value in the Blockbuster brand.
“While Blockbuster’s business faces significant challenges, we look forward to working with its employees to re-establish Blockbuster’s brand as a leader in video entertainment,” Tom Cullen, executive vice president of sales, marketing, and programming for Dish said in an April statement following the acquisition announcement.
The decision to close stores comes almost a year after the company announced similar plans to shut 500 retail locations. Basing the decision on store by store basis, a spokesman says “we will continue to analyze store level profitability and — as we have in the past — close unprofitable stores.”
Dish even considered selling its Blockbuster subsidiary to rival Netflix’s Watch Instantly, but decided otherwise in October. The company, however, still offers a Blockbuster streaming and DVD movie rental service along with its pay TV service.
In an interview in December with DBJ, answering to a question related to the number of stores Blockbuster had open, Dish Network CEO, Joseph Clayton said, “Yeah, ” as our business model changes, they might not be the right square footage, or the leases might not be right once we’ve right-sized the economic equation and the merchandizing situation. We’ll look at it in an individual, store-by-store basis. We’re determined to make money in this business, and we’ll make the model work to make money.”
Dish posted a loss of $158.5 million last quarter compared to a year-earlier profit of $319.1 million. The earnings were mainly impacted by rising customer acquisition costs as the company’s subscriber base continued shrink.
Dish Network Corp. (NASDAQ:DISH) shares were down 2 percent to $37.11 in recent trade. The stocks were up almost 29 percent from 12 months ago.
