More than 300 movie rental stores, including a Hollywood Video store in Brooklyn, will be on the block at a New York City bankruptcy auction next month.
Hollywood Video’s parent company, Movie Gallery, is selling assignments of leases at the March 7 auction. The 327 stores include a Park Slope store as well as 17 fee-owned properties.
Movie Gallery is closing “underperforming and unprofitable” video stores, a company press release said. A Movie Gallery spokesperson, who asked not to be named, said the closures are being done “in an effort to continue to position the company to re-emerge from bankruptcy.”
In Brooklyn, the lease for sale is at a 4,440-square-foot Hollywood Video store at 420 Fifth Avenue. The rent is $29 per square foot and the lease expires Feb. 11, 2010, with two five-year options.
Another 11 stores are subject to closure in upstate New York and Long Island, including stores in Oneonta, Massapequa and Port Jefferson Station. In total, the retail leases up for grabs span 44 states and the District of Columbia.
The auction follows Movie Gallery’s October auction of another 530 locations, said Matthew Bordwin, managing director and co-group head at Keen Consultants, which will hold the auction.
While the sites were not fruitful for Movie Gallery, Bordwin assured that they would be good locations for other retailers. He would not reveal the starting prices prior to the auction.
Auction buyers would pick up the existing rent at the stores, and pay the debtor cash up front. The cash is what’s subject to bidding, Bordwin said.
Movie Gallery is a home entertainment specialty retailer with 3,890 stores in all 50 states and Canada under the brands Movie Gallery, Hollywood Video and Game Crazy. After acquiring Hollywood Video in April 2005, Movie Gallery had 4,700 stores, the company Web site says.
Bordwin said the auction location has yet to be determined, but it will be in the city. Bidders have a March 4 deadline.
If Movie Gallery fails to sell the leases at auction, they will be returned to the landlords, subject to a capped fee.