Hollywood Video Files for Bankruptcy

The Associated Press has reported that Hollywood Video, a movie and video game rental store, has filed for Chapter 11 bankruptcy.

The owners of the video chain, Movie Gallery Inc., say they are planning to close a little over 800 locations, which equals about a third of its retail stores.

The Oregon-based company originally filed for bankruptcy back in 2007, just two years after it acquired Hollywood Entertainment Corp. Movie Gallery was unable to sustain the $350 million debt it agreed to assume as part of the acquisition deal with Hollywood Entertainment.

Movie Gallery has also been struggling as more and more customers are renting movies from Netflix, streaming movies online, or renting movies from Redbox kiosks, where it only costs a $1 to rent a flick.

Over the last three years the company has had to close more than 2,400 stores.

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