Austin’s Hollywood Video to close

Published 11:58 am Thursday, February 4, 2010

A hole in the retail hub along 18th Avenue continues to grow as Austin’s Hollywood Video will soon shut its doors.

Movie Gallery Inc., the company that owns the video store, announced Wednesday it’s filing for Chapter 11 bankruptcy.

Austin’s Hollywood Video, located at 1801 14th St. NW, Suite B, is listed on the company’s Web site as being scheduled to close, as are stores in Eden Prairie, Lakeville and a Movie Gallery in Algona, Iowa. Albert Lea’s Movie Gallery location closed in late 2009.

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The announced closing of the Austin store comes the same week as Sears Holding Corp. announced it will close the doors of Austin’s Kmart a few blocks away.

Currently, a Movie Gallery in Clear Lake, Iowa, and two Hollywood Video stores in Rochester are not scheduled to close.

Austin’s Hollywood Video opened in 1999.

About 760 Movie Gallery, Hollywood Video and Game Crazy stores will close as part of the restructuring process, and the stores will begin immediate liquidation.

According to a Movie Gallery press release, the company’s goal is to emerge from restructuring with a new business model that focuses on a smaller base of profitable stores.

“Over the past two years, Movie Gallery took a number of steps to respond to its business challenges and position the company for future success, including closing several hundred under-performing stores across the country; however, these actions were not sufficient,” a press release read. “After consideration of all available alternatives, the company determined that a Chapter 11 filing was the appropriate next step in its ongoing restructuring.”

About 1,906 stores will remain open in the U.S. after the initial closures: 1,111 Movie Gallery, 545 Hollywood Video and 250 Game Crazy locations. However, additional closings are expected.