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Movie Gallery, Inc.
Type Public (Pink Sheets: MVGR)
Founded 1985
Founder(s) Joe Malugen, Harrison Parrish
Headquarters Wilsonville, Oregon (USA)
Key people Neil Subin CEO
Industry Retail
Products DVD, Blu-Ray and video game rentals and sales
Revenue Green Arrow Up.svg$2.54 billion USD (2006)
Net income Green Arrow Up.svg -$25.1 million USD (2006)
Employees 45,000
Subsidiaries Movie Gallery, Hollywood Entertainment, Game Crazy,, VHQ
Website [1]
Hollywood Video with attached Game Crazy location.

Movie Gallery, Inc., headquartered in Wilsonville, Oregon,[1] is the second largest movie and game rental company in the United States, behind Blockbuster Video. It rents and sells DVDs, movie videos, and video games. It has over 2,200 stores in North America, operating mainly under the Movie Gallery, "Game Crazy", and Hollywood Video brands. The company emerged from bankruptcy on May 20, 2008.



Movie Gallery

Movie Gallery was formed in 1985 by Joe Malugen and Harrison Parrish in Dothan, Alabama. Through its wholly-owned subsidiary, M.G.A., the company's founders began operating video specialty stores in southern Alabama and the Florida panhandle, and franchising the Movie Gallery store concept. By June 1987 the company owned five stores and had a franchise operation of 45 stores. In 1988, the company began to consolidate the franchisees into company owned stores. By 1992, The company had a total of 37 stores and annual revenues of $6 million.

In August 1994, the company completed an initial public offering of its stock. With the proceeds from this offering, the company began to quickly complete acquisitions of various video chains, primarily in the southeast. In early 1995, the company raised additional public funds and continued the acquisition and development of stores. By the middle of 1996, only 22 months after beginning its aggressive expansion strategy, Movie Gallery had grown to over 850 stores through over 100 separate acquisitions.

In 1999, Movie Gallery announced plans to build 100 new stores. The company completed an 88-store acquisition of Blowout Entertainment in May, and ended the year with more than 950 locations in 31 states.

In 2000, Movie Gallery again set its goal at opening 100 new stores and relocating 25. This goal was surpassed.

The company moved forward with its largest single-chain acquisition to date, expanding its base of stores by 30%, in late December 2001. This addition of Video Update stores to the Movie Gallery family launched the company's international presence with 100 retail locations in Canada.

Following the completion of the Video Update acquisition, Movie Gallery achieved the 2,000 store mark in 2003.

In 2005, the company completed the largest acquisition to date with the Hollywood Entertainment merger. This combination of companies increased the store total to 4,700 with revenues in excess of $2.5 billion. In addition, Movie Gallery opened 61 new stores in Western Canada with the acquisition of VHQ Entertainment.

The company began having financial difficulties and announced the closure of 520 stores in September 2007.[2] At the time Movie Gallery had about 4,500 locations.[2] The next month, the company filed for Chapter 11 bankruptcy protection under the U.S. Bankruptcy Code.[3][4] Due to these troubles, the stock price dropped below $1 per share at were removed from listing on the NASDAQ stock exchange in November 2007.[5]

An additional 400 stores were scheduled to close during the bankruptcy reorganization.[6] MovieGallery emerged from Chapter 11 in May 2008[3] and appointed C.J. Gabriel, Jr. as the new chief executive officer. Founder and former CEO Joe Malugen continued to serve on the Movie Gallery Board of Directors until leaving on July 30, 2008.[7] The company relocated its headquarters to Wilsonville, Oregon, (home of the Hollywood Video subsidiary) in late 2008.[8][9][10] In January 2009, they closed their Wilsonville distribution center.[10]

Movie Beam

MovieBeam was a set top service currently offered in larger cities in which customers could download movies to a set top box. Most movies expired within 24 hours. The company was originally founded by Disney and other investors as an alternative to online movie downloads. A special set top box had to be purchased by consumers for the service. Most major movie studios provided New Release content to the service. MovieBeam was shut down on December 15, 2007.[11] As of June 2008 Movie Beam was sold to an outside investors group for approximately $2 million as part of the company's restructuring. All in-store kiosks for the service have been removed as well.

Hollywood Video

Hollywood Video logo.
A typical Hollywood Video store
Hollywood Video store in Laredo, Texas

Hollywood Video, a subsidiary of Movie Gallery, Inc. operates from Wilsonville, Oregon, as a DVD and video game rental shop chain in the United States. It was started in 1988 by former CEO Mark Wattles and his wife. The chain was the largest direct competitor of Blockbuster Video until it was purchased by Movie Gallery in 2005. Hollywood Video has its own unique brand of customer service—called "Star Treatment"—an innovation that has fueled the growth of the chain across the country. In 1990, Hollywood revolutionized the home entertainment industry with the national rollout of 5-Day Rentals on everything in the store, and again in 1992 with Guaranteed New Releases. In 1999, Game Crazy (currently with 350 free-standing locations) was launched, as a store-within-a-store that gives gamers a place to buy, sell and trade video games.

Purchase of Hollywood Video

Hollywood Video was the target of a hostile takeover attempt, initially announced at the end of December 2004 by competitor Blockbuster Video. In February 2005, Blockbuster announced an exchange offer of $14.50 per share ($11.50 cash and $3.00 in Blockbuster shares).[12]

In order to create a stronger position against the hostile takeover, Hollywood Video agreed to a buyout on Monday, January 10, 2005 by its smaller competitor Movie Gallery. Movie Gallery paid $860 million, $13.25 per share, and the assumption of $380 million in debt. Stocks closed at $13.85 on January 10 after these news. Blockbuster then dropped its purchase plans, citing anti-trust concerns. Movie Gallery completed its purchase of Hollywood Video on April 27, 2005.

The take over, and the failed attempts to integrate the brands, resulted in Movie Gallery filing bankruptcy in 2007, though the company recently emerged from this with plans of revitalization and consolidation.

iPhone App

In October, 2009, Movie Gallery unveiled an application Apple iPhone owners can use to find the nearest Movie Gallery or Hollywood Video outlet, run searches on titles or actors and play previews on their mobile devices, marking the No. 2 U.S. movie-rental chain’s efforts to boost sales from a growing base of mobile-phone users.

The application, called “Didja C?,” lets users get information on as many as 35,000 titles and play back high-resolution trailers from an inventory of about 10,000 movies, Movie Gallery said on its Web site. The free application also provides instant movie recommendations, as well as alerts users when new titles are available.

Movie Gallery today

Today, Movie Gallery operates about 2,700 Movie Gallery and 1,300 Hollywood Video locations in the United States.[13] Canadian operations include over 200 "Movie Gallery" branded stores, as well as approximately 60 under the VHQ brand in western Canada.

As of November 4, 2009 - Movie Gallery is currently behind rent in many locations. They have set up a hotline for distressed building owners.[14]

Movie Gallery has also announced that it will close an additional 450 stores.[15]

Movie Gallery's stock fell from $1.25 at close in October to $.05 a share at close on December 3, 2009. [16]

Movie Gallery hired restructuring firm Moelis & Co. on December 15, 2009, meaning that it will have a 30-day grace period to renegotiate with lenders and landlords, or it maybe forced into bankruptcy a second time.[17]


  1. ^ "Contact Us." Movie Gallery. Retrieved on September 16, 2009.
  2. ^ a b "Troubled Movie Gallery is closing 520 stores". Portland Business Journal. September 25, 2007. Retrieved 2009-08-22.  
  3. ^ a b "Movie Gallery Inc. exits bankruptcy". Portland Business Journal on. May 20, 2008. Retrieved 2009-08-22.  
  4. ^ "Movie Gallery files for Chapter 11, outlines plans to reorganize". Portland Business Journal. October 16, 2007. Retrieved 2009-08-22.  
  5. ^ "NASDAQ to remove Movie Gallery on Nov. 19". Portland Business Journal. November 7, 2007. Retrieved 2009-08-22.  
  6. ^ "Movie Gallery closures approach 1,000". Portland Business Journal. February 5, 2008. Retrieved 2009-08-22.  
  7. ^ "Founder Malugen out at Movie Gallery". Portland Business Journal. August 4, 2008. Retrieved 2009-08-22.  
  8. ^ Culverwell, Wendy (August 14, 2009). "Movie Gallery quietly moves to Wilsonville". Portland Business Journal. Retrieved 2009-08-22.  
  9. ^ "Wilsonville gains corporate video titan". Wilsonville Spokesman. August 17, 2009. Retrieved 2009-08-22.  
  10. ^ a b "Movie Gallery shuts Wilsonville facility". Portland Business Journal. January 22, 2009. Retrieved 2009-08-22.  
  11. ^ Movie Gallery Inc - Home
  12. ^ Press Releases
  13. ^ Company Profile|
  14. ^
  15. ^
  16. ^
  17. ^

External links

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