The UK DVD rental store has gone into administration putting 4,190 jobs at risk, just a day after high street DVD and music store HMV suffered a similar fate.
Deloitte, who are also overseeing HMV, will now take over the day-to-day running of the firm. The accountancy firm have said that Blockbuster could not keep up with competition from internet-based film rental services.
Blockbuster, which has 528 stores across the UK, confirmed it will continue to accept gift cards and credit acquired through a trade-in scheme offered in-stores.
Speaking for Deloitte, Lee Manning from the Restructuring Services practice said: “We are working closely with suppliers and employees to ensure the business has the best possible platform to secure a sale, preserve jobs and generate as much value as possible for all creditors.
“The core of the business is still profitable and we will continue to trade as normal in both retail and rental whilst we seek a buyer for all or parts of the business as a going concern.”
Blockbuster launched in the UK in 1989. It has closed more than 100 stores in recent years.
Lavinia Carey, director general at the British Video Association said: “The BVA is saddened by the news that Blockbuster has followed HMV into administration today. This is a bad start to the year for video entertainment.
“Like HMV in sales, Blockbuster was the last significant specialist rental retailer, whose stores had 32% share of the rental volume in 2011, down from 35.6% in 2010, in a market that is being challenged by digital video models that are starting to fulfil consumer demand amongst younger viewers with connected devices and those with smart TVs via internet services.
“Although video rental stores have declined in number in the last 10 years, when there were several rental chains in the UK apart from market leader Blockbuster, generating over £500 million in consumer spend and 86% of that on physical formats, in 2011 consumers were still spending £464 million on renting video, but by then it had declined to 59% physical and 41% on digital video rentals.
“Nevertheless, Blockbuster still has significant market to fulfil, with 8.8 million people saying they rented a disc in 2011, according to Kantar Worldpanel.
“The BVA truly hopes that administrators, Deloittes, will be able to oversee a successful restructuring of the Blockbuster business so that access to disc rentals can maintained where there is a market and consumer choice can be satisfied.”