Despite its well-publicized struggles, the chairman and CEO of Blockbuster Inc. wants to banish any perception that the company will not recover.
The Dallas-based company filed for Chapter 11 bankruptcy in September with debt of nearly $1 billion. But Jim Keyes says customers shouldn't count the company out.
"Blockbuster is here to stay," said Keyes, who joined the company in 2007.
He said the company is adapting to the increasing electronic needs of customers.
Blockbuster opened its first store in Dallas 25 years ago and went on to long dominate the movie rental business. But more Americans now use services such as Netflix and Redbox or watching movies on demand via the Internet or satellite or cable service.
"So many companies have faced this with mounting debt and challenging financial times," Keyes said. "Blockbuster, too, has to restructure its balance sheet, but that doesn't mean our business isn't today and will not be viable for many years to come, as long as we change."
When the company emerges from bankruptcy, there will be fewer stores. Keyes said he expects Blockbuster to emerge from bankruptcy early in the second quarter of this year, but did not offer specifics on how many stores in North Texas will close.
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And while there are currently 7,500 Blockbuster Express kiosks, over the next year, that number will grow to more than 10,000.
Keyes said Blockbuster is also banking on the popularity of "Blockbuster on Demand," which allows customers to get instant access to movies on 100 different mobile and other electronic devices.
"We had traditionally been in stores and yet, now, we are not only in stores, we have Blockbuster Express kiosks, Blockbuster on Demand -- a great new digital service," he said. "We have Blockbuster by mail, and we have an advantage with newer movies than any of our competitors."
Keyes said the new Blockbuster will be stronger and better. To keep customers tuned in, the company recently launched its first national ad campaign in several years and is promoting its low-priced offerings.
He is predicting a turnaround similar to that of General Motors Co., which emerged from bankruptcy with fewer brands, factories and workers.
But for now, Blockbuster's connection to its brick and mortar stores will remain.
"As long as we adapt, which we're trying to do today -- adding video games, adding a whole host of other things to those stores -- then the physical store itself could remain indefinitely," Keyes said. "Perhaps not in as many numbers as we have today, but there should be a role for the physical store for retail entertainment well into the future."
