SUMMIT — The Movie Gallery in the Summit Plaza on U.S. 60 is one of more than 750 locations the chain has targeted for closure as part of its plan to reorganize under Chapter 11 bankruptcy.
However, the Movie Gallery stores in Catlettsburg and Russell will be spared, as will the one in Ironton, according to the company’s Web site.
Oregon-based Movie Gallery Inc. on Tuesday filed a Chapter 11 petition in U.S. Bankruptcy Court in Richmond, Va. The filing included Movie Gallery and its subsidiaries, Game Crazy and Hollywood Video, according to a news release posted on the company’s Web site.
The company said its restructuring plan would include “the immediate liquidation and closure” of 760 of its U.S. locations. Movie Gallery also said it anticipated more stores would be closed during the Chapter 11 process.
Following the initial closures, Movie Gallery will still operate more than 1,900 stores, more than 1,100 of them under the Movie Gallery name.
In its Chapter 11 filing, the company cited the economic and competitive challenges facing its business and said the measures it has taken to respond to them over the past two years — including shutting down several hundred under-performing stores across the country — haven’t been sufficient.
“After consideration of all available alternatives, the company determined that a Chapter 11 filing was the appropriate next step in ongoing restructuring,” the company said. “Movie Gallery’s goal is to emerge from the restructuring process with a new and sustainable business model centered on a smaller base of profitable stores.”
KENNETH HART can be reached at khart@dailyindependent.com or (606) 326-2654.
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