It’s A Wrap: Movie Gallery To Close All U.S. Locations

A milestone in the transition to alternate video rental models: Movie Gallery, the second largest video rental chain in the U.S., is closing all of its shops. The WSJ says the company will shut down the locations over the next several months; no comment from Movie Gallery yet.

The move comes four months after Movie Gallery — which also owns Hollywood Video and Game Crazy — filed for chapter 11 bankruptcy for the second time in less than three years, citing the “economic and competitive realities facing its business.” The company had said then that it would shrink its retail footprint by a third so that its business could be “centered on a smaller base of profitable stores.” Apparently, however, their prospects were too bleak to do so.

The winners here, which now get to compete for Movie Gallery’s $750 million in estimated sales: Blockbuster (NYSE: BBI), which now will have less retail competition, although it is also shutting down nearly 1,000 stores of its own and reportedly passed on an opportunity to buy some of those Movie Gallery shops; Netflix (NSDQ: NFLX), which keeps on posting rosy numbers; and Redbox, which just yesterday landed yet another distribution deal for its rental kiosks.