SAN FRANCISCO - Blockbuster Inc. may close as many as 960 stores by the end of next year, shedding more dead weight as the struggling video rental chain tries to reverse its losses and fend off rapidly growing rivals Netflix Inc. and Redbox.
The cuts outlined in documents filed yesterday would leave Blockbuster with about 20 percent fewer US stores.
Blockbuster hasn’t yet conclusively decided to close all the stores mentioned in the previously confidential documents, chief executive James Keyes said. Keyes described the closures as something that Blockbuster is considering as it sets up more DVD-rental kiosks in the stores of other merchants. It’s a concept that has been popularized by Coinstar Inc.’s Redbox.
By the middle of next year, Blockbuster hopes to have 10,000 kiosks around the country. It had just 500 kiosks at the end of August.
Blockbuster’s shift serves as another reminder of video stores’ waning appeal as consumers buy and rent movies through the mail, on the Internet, through cable connections, and at standalone kiosks.
About 18 percent of Blockbuster’s stores aren’t making money, according to the documents filed with the Securities and Exchange Commission.
Blockbuster is thinking about closing between 810 and 960 of its US stores before 2011, up from the 380 to 425 stores that normally would be closed during that time span.
As of mid-August, Blockbuster had closed 276 stores so far this year. Besides closing stores, Blockbuster indicated that it will convert at least 250 stores into smaller outlets.
If Blockbuster hits the high end of the new target for store closures, it will represent 22 percent of its 4,356 US stores.