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Deloitte: We're "Fighting In The Trenches" For Blockbuster

Matt Gardner
Administration, Blockbuster, Deloitte, High street, HMV, UK retail

Deloitte: We're "Fighting In The Trenches" For Blockbuster

Administrators aren't robots, you know. Deloitte's Lee Manning, a man who's attempted to drag many a UK high street chain out of the financial quicksand into which poor management has led them, is currently acting as administrator for Blockbuster UK, and likens the process to  being caught in trench warfare.

"We try and save as many jobs as we can. But we can't save all of them," he told The Telegraph.

"We have to deal with people that are in distress both emotionally and financially. With people who want their money back. We are basically fighting in the trenches - but we get shot at by all sides."

At the time of writing, around 160 of Blockbuster's 528 UK stores have closed, with a rumoured 60-100 of HMV's stores due to close too. For Manning, the problem extends beyond the decline of the high street itself, and he points to failure to deal with the technological revolution - particularly when it comes to online shopping - that has crippled two of the UK's largest entertainment stalwarts.

“There is a real reason HMV and Blockbuster are distressed and that goes beyond the problems of the high street. That is much more driven by technology and the fact that the delivery method of their product had been fundamentally challenged by technology. Simply put, there is less demand for the physical product when people can buy it easier and cheaper online.

“There is a technological revolution, And Blockbuster’s online business has been underinvested and that has caused their demise. They can’t get footfall in relation to the rent. Also the margins are too slim from the supplier. It is the same problem for HMV.”

Add a comment2 comments
Late  Feb. 5, 2013 at 12:08

I can attest to Blockbuster Online being a bit crap.

Bought 4 second hand games a few months back (one of which was 4 disks - so 7 disks in 4 cases) in their regular "4 for £20" promotion. All four boxes were dirty and/or damaged, all seven disks were badly scratched, and one of the disks wouldn't play. (To their credit they did replace it FOC, with another dirty disk but at least this one played okay.)
Partly the fault of the previous owners, but definitely demonstrates a lack of quality control on Blockbuster's part. Swore I wouldn't buy second hand from them again.

Around two months ago I signed up with their online rental service. One month free trial, two rentals at a time. A few days later I received two games - and both were sent back the next day (one was completed, the other wasn't my cup of tea at all).
Nearly three weeks later I received a third disk. I sent it back next day and cancelled my membership. I'd been on a similar rental scheme with Lovefilm a few years back and those guys knew what they were doing. You'd get a new disk around 3 days after returning your last one - not three weeks later.
(n.b. I did send several emails in the intervening period, but none was replied to. And I did have a full list of requested title - I hadn't just put a handful of obscure things in there.)

Went back on my vow not to buy second hand from them a week and a half ago, and bought Assassin's Creed 3. Couldn't resist at £13.00.
Actually £14.10, in the end, as I got the game this morning when I went to the local sorting office and paid £1.10 due to underpaid postage by Blockbuster.
The disks are of course scratched - but fortunately they don't look too bad. No instructions or online pass, but that's to be expected with second hand games from anywhere.

As much as I hate to see a mainstay like Blockbuster struggle/disappear I do think their service in the last couple of years has left a lot to be desired. The rental service is very weak. Their second hand sales service is very weak. It's understandable if lots of people lost faith and stopped using them a while back, to be honest...

botheredmuch  Feb. 10, 2013 at 20:34

Rents are too high, have been for a long time, high street stores cannot generate the same profits they used to and therefore unless the rent is adjusted the units will go empty, situation is worse if stores are paying for common areas and facilities which is split between surviving stores as it pushes the costs up further.

My own town has been okay until a couple of weeks ago, this weekend I see Blockbusters is going, an electrical resellers and a leather store all closing and the domino effect is starting to kick in, I hear the other stores talking about the landlord increasing costs on surving tenants, which will just force them in to closure.

Add that to the new taffic calming measures, double yellow lines, parking detection units and you could be forgiven for thinking the powers that be want it to fail.

Govt needs to act on helping small business's and start ups if they want the high street to survive beyond takeaways, hairdressers and supermarkets (which all seem to be increasing).

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