Blockbuster's ailing UK stores sold to investment firm
LONDON (Reuters) - Blockbuster's chain of film and computer game rental shops in Britain has been sold to an investment firm, two months after the struggling retailer went into a form of bankruptcy protection, administrators said on Saturday.
Deloitte, which took control of Blockbuster's British operations after it entered administration on January 16, said the company had been sold to Gordon Brothers Europe for an undisclosed sum.
Under the terms of the deal, the global restructuring specialist will keep 264 of Blockbuster's 528 stores, safeguarding the jobs of nearly half its 4,190 staff.
Blockbuster's UK shops fell victim to increased competition from supermarkets, the shift towards people watching films over the internet and a harsh economic backdrop in Britain.
"This transaction provides Blockbuster a future in the UK," said Deloitte's Lee Manning, joint administrator.
The new owners said the surviving shops would reopen under the Blockbuster brand, licensed from U.S. satellite TV company Dish Network (DISH.O), which owns the American operation.
Gordon Brothers Europe said it would make a "substantial" investment in the stores, offering new products to try to return the company to profitability.
"We acknowledge the industry is in transition; we know that we have a challenge ahead but there is still a market to be served," Frank Morton, chief executive officer of Gordon Brothers Europe, said in a statement.
Blockbuster opened its first shop in Britain in 1989 and its blue and yellow branding soon became a familiar site in most high streets across the country. It had nearly three million members before it closed its doors.
It was one of a string of household names in British retailing hit by the internet, increased competition and years of weak economic growth.