Hollywood Video Store Closures Underscore California Retail Industry Problems

The Movie Gallery's Chapter 11 bankruptcy filing is slated to lead to the closure of 760 American stores operating under the 'Movie Gallery,' 'Hollywood Video' and 'Game Crazy' names. Impact on the California retail industry is enormous and ... foreseeable?

California Retail Landscape Loses Several Hollywood Video Locations

The Movie Gallery is the number two operation in the video rental business. It owns Hollywood Video, a common sight in local strip malls. In February of 2010, the Movie Gallery filed Chapter 11 bankruptcy papers that will affect its American operations. The company reports that about 760 stores will be closed while the rest are said to be sufficiently profitable to allow the company to continue "moving forward."

Los Angeles Area Impact of Hollywood Video Store Closures

Out of 16 Hollywood Video locations in the Los Angeles area, 10 are scheduled to close. They include the locations in Torrance, Redondo Beach, Whittier, Garden Grove, La Habra, Fullerton, Montebello, Monterey Park as well as the Venice and Wilshire Boulevard stores in Los Angeles.

Going the Way of Betamax?

Back in the day, JVC's VHS and Sony's Betamax defined the VCR format landscape. Eventually the VHS format beat out Beta and machines supporting the latter format became e-waste. Video rentals are now going the way of the Beta format.

Daily Finance points out that the February, 2010 Chapter 11 filing for the Movie Gallery is its second stint in bankruptcy court. Ever since its heyday in 2005 - when it operated in excess of 4,500 locations - the gradual influx of Internet-based movie rentals and alternative methods of taking in the flicks have eaten away at the bottom line. At this time, the company hopes to scale back to 1,610 stores and become (and remain) profitable.

Hollywood Video and Its Impact on the California Retail Landscape

In an October 2009 interview with The Sun Magazine, James Howard Kunstler pointed out that American business moved away from manufacturing and embraced an economy revolving around "suburban-sprawl-building." In his estimation, the overage of strip malls is now meeting its "terminal decline." It would appear that he described California.

One in a long list of California retail bankruptcies, Hollywood Video shines another light at the problems facing the state's economic climate. Best Places highlights the issues facing Lancaster and its surrounding areas, but they are by no means germane only to that locale.

Ineffective politicians majoring in the minors, government cronyism, outside meddling with local politics, an uncontrolled building boom and subsequent project abandonment as well as skyrocketing foreclosures are affecting the business landscape.

Compound this with the reliance of a retail industry, such as Hollywood Video and its parent company Movie Gallery, on soon-to-be obsolete technologies or business models, and the fate of the California retail landscape is all but sealed.

Sources
Hollywood Video. "Movie Gallery Restructuring" (accessed March 10, 2010)
Daily Finance. "Movie Gallery Bankruptcy, Take Two: End of the Road for Video Rental?" (accessed March 10, 2010)
The Sun Magazine. "The Decline And Fall Of The Suburban Empire" (accessed March 10, 2010)
Best Places. "Lancaster, California SperlingViews" (accessed March 10, 2010)