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Blockbuster set to disappear from high street with loss of 1,200 jobs Blockbuster set to disappear from high street with loss of 1,200 jobs
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Blockbuster is set to disappear from the British high street with the loss of more than 1,200 jobs, after administrators failed to find a buyer for the DVD and games rental chain. Blockbuster is likely to disappear from the British high street with the loss of more than 1,200 jobs, after administrators failed to find a buyer for the DVD and games rental chain.
A further 62 stores will close from Friday with 427 job losses, following a spate of closures since the chain went into administration in October for the second time this year. A further 62 stores will close from Friday, with 427 job losses, following a spate of closures since the chain went into administration in October for the second time this year.
Administrators at Moorfields Corporate Recovery said they may be forced to close the remaining 91 stores employing 808 staff because they had not received "any acceptable offers" to buy the business.Administrators at Moorfields Corporate Recovery said they may be forced to close the remaining 91 stores employing 808 staff because they had not received "any acceptable offers" to buy the business.
Simon Thomas, a partner at Moorfields, said business rates were "a significant burden" for large and small retailers on the high street. Simon Thomas, a partner at Moorfields, said business rates were "a significant burden" for large and small retailers on the high street.
"Having recently been appointed as administrators of Blockbuster we understand the impact that business rates can have on retail firms, even the size and scale of Blockbuster," he said."Having recently been appointed as administrators of Blockbuster we understand the impact that business rates can have on retail firms, even the size and scale of Blockbuster," he said.
The chancellor in his autumn statement today announced that he would cap next year's business rate rise at 2% rather than the expected 3.2%, following lobbying from a host of business groups. But he did not bring forward a revaluation which remains scheduled for 2017. The chancellor in his autumn statement announced that he would cap next year's business rate rise at 2%, following lobbying from business groups against a projected 3.2%. But he did not bring forward a revaluation, which remains scheduled for 2017.
However speaking before the announcement Thomas said a 2%cap would not have helped Blockbuster. Speaking before the announcement, Thomas said the 2% cap would not have helped Blockbuster.
"At 2% Blockbuster would have faced an increase of £75,000 on an already sizeable £3.8m, a figure which highlights the significant hurdles facing retailers and pushing many over the edge," he said."At 2% Blockbuster would have faced an increase of £75,000 on an already sizeable £3.8m, a figure which highlights the significant hurdles facing retailers and pushing many over the edge," he said.
He also warned that the four-year wait until rates are reviewed in 2017 would be "too much for the sector to bear".He also warned that the four-year wait until rates are reviewed in 2017 would be "too much for the sector to bear".
"Retail space is not as desirable as it once was and we need to take urgent action. We are not blind to the fact, however, that this would need to be paid for but are confident that by stimulating retail activity across the country the exchequer should increase the direct and indirect tax take." "Retail space is not as desirable as it once was and we need to take urgent action. We are not blind to the fact, however, that this would need to be paid for but are confident that by stimulating retail activity across the country, the exchequer should increase the direct and indirect tax take."
But retail analysts have suggested Blockbuster's problems ran deeper, with the chain overtaken by rivals such as Netflix and Lovefilm that allow consumers to rent films over the internet, as well as supermarkets offering cutprice DVDs. Neil Saunders at retail consultancy Conlumino recently said reviving Blockbuster was "as logical as trying to open a chain of blacksmiths". The store is only one of several high street brands to struggle in the face of internet competition, with music retailer HMV calling in the administrators and camera chain Jessops bought out of administration by Dragons Den star Peter Jones. Patrick O'Brien at Verdict Retail said: "It is ridiculous to suggest that a change in rates could have possibly saved them from their fate." He added that it looked "unlikely" Blockbuster would find a buyer to revive the brand or take on its stores, with many of the best locations already "cherry-picked" in previous sales. At the start of the year Blockbuster had 528 stores employing 4,190 staff.
Blockbuster has fallen into administration twice this year, but trade remained lacklustre after its first rescue by private equity group Gordon Brothers Europe in March. In October the new owners admitted that its turnaround strategy had not worked. At the start of the year Blockbuster had 528 stores in the UK employing 4,190 staff. The next round of closures, affecting outlets across the country, gets underway tomorrow and continues through the weekend, with stock likely to be sold at discounts of 70%. Retail analysts have suggested Blockbuster's problems ran deep, with the chain overtaken by rivals such as Netflix and LoveFilm that allow consumers to rent films over the internet, as well as supermarkets offering cut-price DVDs. Neil Saunders at retail consultancy Conlumino recently said reviving Blockbuster was "as logical as trying to open a chain of blacksmiths".
If no last-minute buyer steps forward, it will be high street switch-off for a brand that arrived in Britain in 1989, taking over Ritz videos and expanding rapidly under the slogan "wow, what a difference". Blockbuster's woes are mirrored in its US home market, where 300 Blockbusters will be gone by January, leaving only 50 franchised stores remaining.
The store is only one of several high street brands to struggle in the face of internet competition, with music retailer HMV calling in the administrators, and only one in six Jessops camera shops rescued by Dragons' Den star Peter Jones after the company's collapse.
Blockbuster has fallen into administration twice this year, but trade remained lacklustre after its first rescue by private equity group Gordon Brothers Europe in March. In October, the new owners admitted that its turnaround strategy had not worked. The next round of closures, affecting outlets across the country, gets under way tomorrow and continues through the weekend, with stock likely to be sold at discounts of 70%.
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