October 29, 2013 / 2:35 PM / 4 years ago

Blockbuster UK set to fall back into administration

LONDON (Reuters) - Blockbuster’s chain of film and computer game rental shops in Britain is set to go into administration, a form of bankruptcy protection, for the second time in 10 months after its private equity owner failed to turn the business around.

The logo of a Blockbuster shop is seen in south London January 16, 2013. REUTERS/Paul Hackett

The firm’s British shops originally fell victim to increased competition from supermarkets, the shift towards people watching films over the internet and a harsh economic backdrop.

Gordon Brothers Europe, which purchased Blockbuster for an undisclosed sum in March, said on Tuesday it was filing a notice of intention to appoint an administrator to the retailer, which trades from 264 stores and employs 2,000.

The firm said it had striven to turnaround the historically loss-making company by restructuring the business, investing in marketing activities and negotiating with the landlords of its retail outlets.

Gordon Brothers said it had also tried to develop a new digital platform but was unable to broker a licensing deal with Blockbuster UK’s parent company in the United States.

“Regrettably, the months since the acquisition have also coincided with a period of poor trading performance across both rental and retail sales,” it said, adding that the need to reduce costs whilst a buyer is sought will result in 32 redundancies at Blockbuster UK’s head office.

All stores will continue to trade whilst a buyer is sought for the business.

Several British retailers collapsed in the economic downturn, including Woolworths, Comet, HMV and Jessops.

Reporting by James Davey; editing by Rhys Jones

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