Movie Gallery stores in Columbus, Phenix City survive latest cuts

The Movie Gallery stores in Columbus and Phenix City have survived a second round of closures as the Dothan, Ala.-based company works through bankruptcy reorganization.

None of the seven stores in the local market are on a list of 400 Movie Gallery and Hollywood Video outlets scheduled to close and liquidate inventory. The company said the affected stores are "underperforming and unprofitable."

The closest store on the hit list is in Montezuma, Ga., about 40 miles east of Columbus.

Last September, Movie Gallery Inc. announced it was shutting down 520 locations to cut costs following its 2005 acquisition of Hollywood Entertainment Corp. The purchase cost Movie Gallery $1 billion.

The nation's No. 2 video rental chain — behind Blockbuster Inc. — also is facing pressure from slumping box-office offerings, big-box retailers selling DVDs for under $10, and emerging technologies such as online video rental and video-on-demand.

The company filed for Chapter 11 bankruptcy protection in October.

"The decision to close stores is always difficult, but we are confident that we are taking the right steps to emerge from bankruptcy as a stronger company, better positioned for long-term success," Joe Malugen, president and chief executive officer of Movie Gallery, said of the lastest phase of closures.

The company has said its expects to file a reorganization plan with the U.S. Bankruptcy Court in Virginia in the second quarter of this year, then emerge from bankruptcy shortly thereafter.

After more than 900 store closures, the firm said Tuesday there is no way of knowing if more cuts may come before Movie Gallery exits bankruptcy.

"I know the company's continually assessing its fleet of stores," said Andrew Siegel, a company spokesman. "I don't know if there will be more or not. I couldn't provide you any kind of assurance on that."

The company operates nearly 3,900 stores in the U.S. and Canada under the Movie Gallery, Hollywood Video and Game Crazy brands. The new closures will leave it with 3,500.