Blockbuster heading into administration for the second time this year

Blockbuster, the DVD and game rental chain, is finally throwing in the towel as the company will soon go into administration for the second time in 2013. As a result, 2,000 workers will likely be made redundant.

The rental business was one of the big three retail shops to fall at the start of the year as they entered administration along with Jessops cameras and HMV music stores. All three were able to bounce back a bit, but Blockbuster is now forced to acknowledge that their turnaround failed because games and DVD rental is now done mainly online.

Restructuring specialist Gordon Brothers said that the company will have to enter administration because of the very poor sales that it was currently pulling in. Chief Executive of Gordon Brothers, Frank Morton, explained that after the acquisition they worked very hard to build the brand and attempt to get a new footing for Blockbuster. He added that even though they worked hard to preserve the company they are going to have to make some redundancies and are grateful to those who stuck with them over the last few months.

When Blockbuster was purchased there were around 264 stores; which is half as much as the chain originally owned. They planned to put a lot of money into reviving the company but efforts stalled when they could not get a license from the US parent company to put Blockbuster online.

Immediately affected will be thirty jobs at the head office in London and while stores will trade for the moment there are another 2,000 jobs at risk if a buyer does not step up to take over the company. Most experts in the industry claim that the problems with Blockbuster lie with the shift online for rentals instead of the economic decline.