On September 25, Movie Gallery Inc., the parent company of Hollywood Video, announced it was closing approximately 520 underperforming stores including the store in Beavercreek. On October 15, the company filed bankruptcy.



Beavercreek’s Hollywood Video on N. Fairfield announced closing in September. Photos © C. Barhorst


The local Beavercreek Hollywood Video located on North Fairfield Road is now closed. The store had displayed a “Store Closing” banner for the last month and customers filled the parking lot looking for bargains. Now the parking lot is empty, the doors are locked and a bankruptcy sign for the property hangs in the window.


According to company officials, the decision to close this store and 519 others was made in an attempt to conserve cash and reduce overhead to deal with mounting losses and stiff competition from online and pay-per-view alternatives. As a whole the DVD rental industry has experienced many challenges in recent years.


Joe Malugen, Chairman, President and Chief Executive Officer of Movie Gallery, said, “Closing these stores was a difficult, but necessary decision to help protect the future of this company.” Malugen continued, “We thank our many associates and partners who have remained loyal to us over the years. Where possible we will work with the customers at these locations to transfer their accounts to other nearby Movie Gallery and Hollywood Video locations.”


Twenty one days after announcing the store closings, Movie Gallery filed voluntary chapter 11 petitions in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division on October 16, 2007 to restructure it’s debt among other things.



A bankruptcy sign for the property now hangs in the window alongside another sign directing customers to other locations that are still open. Photos © Craig Barhorst


During it’s first day of hearings in U.S. Bankruptcy Court, the company received court approval to pay pre-petition employee wages, health benefits, and other employee obligations during its restructuring under chapter 11. The company is authorized to continue to pay ordinary expenses and was given approval to honor its current customer policies regarding merchandise returns and to honor outstanding gift cards and loyalty programs.


“We are pleased with the prompt action by the Bankruptcy Court in approving our first day motions,” said Joe Malugen, Movie Gallery’s Chief Executive Officer. “This approval will allow our stores to continue to operate so that we can continue to serve our customers while implementing strategies to enhance our financial performance.”


Movie Gallery is the second largest North American video rental company with approximately 4,430 stores located in all 50 U.S. states and Canada operating under the brands Movie Gallery, Hollywood Video and Game Crazy. Movie Gallery has retained an outside professional services firm, the Great American Group, to assist it in conducting sales of the inventory at the closing stores.


Source: Movie Gallery, Inc. news releases.