Movie Gallery, the parent company of stores of the same name as well as Hollywood Video and Game Crazy, announced Wednesday it has filed for bankruptcy protection the second time since 2007 and will close about 760 locations, including some in Kentucky.
"We are closing these because they are not profitable and because funds from liquidating them can help us moving forward," the company said in a statement.
Among the stores that will be shuttered in Kentucky are Hollywood Video, 407 West New Circle Road, Lexington; and Movie Gallery locations at 1753 Alexandria Drive in Lexington, 516 Wilson Street in Falmouth, 205 Oakbrook Drive in Mount Washington, 3818 Winston Avenue in Covington, 2091 North Bend Road in Hebron, 7017 Alexandria Pike in Alexandria, U.S. 23 in Betsy Layne, and U.S. 60 West in Ashland.
Closing dates for each store were not immediately available. All other stores will continue to operate, and Movie Gallery expects the bankruptcy court to allow it to continue to honor customer programs and gift cards.
The company said it might continue to close other stores, "but we cannot speculate on the exact number," according to information provided on its Web site. The documents say there are about 900 stores that are producing positive cash flow "and will form the core of our ongoing business."
Customers with questions about the bankruptcy proceedings are invited to call a toll-free hot line, 1-877-244-6684.
The company cited "changes in the economic and competitive realities we face" in explaining the bankruptcy filing. Traditional movie rental stores have encountered great obstacles in recent years with the skyrocketing success of DVD-by-mail service Netflix and self-serve kiosks such as Redbox. Netflix also has branched out to offer streaming movies and shows using set-top boxes and gaming consoles like the Xbox 360. Late last month, the company announced it added more than 1.1 million customers during its previous quarter, the most in any three-month period in its history.
Movie Gallery rival Blockbuster also has been beset with problems and has shuttered many stores nationwide. It recently closed its store on Euclid Avenue in Lexington.