Movie Gallery bankruptcy causing Montgomery job loss

Posted by: Melissa Johnson - bio | email

Dothan, AL (WSFA) – The once Dothan based Movie Gallery has filed for bankruptcy for the second time in two years.

The company announced this week it would close 760 stores across the country, including two in Montgomery and one in Enterprise.

Tim Hawkins recalls the company's small beginnings.

He said, "I remember way back when they first started up with an itty bitty store."

Hawkins' business, West Main Jewelry and Loan, is a block away from where it was once headquartered near downtown Dothan.

From there, it became the second largest video and game rental company in North America.

"They got pretty big time," Hawkins said.

But then, things went south, and after filing for bankruptcy in 2007, the company moved its headquarters to Wilsonville, Oregon.

Now, they're filing for a second time, hoping to use the opportunity to restructure their business model.

The company couldn't be reached for comment, but they did release a statement about it's dire financial situation citing the economic and competitive challenges facing its business.

The company also acknowledged Redbox's role in its decline, saying the dispensing kiosks offer lower priced rentals and convenience—something they haven't been able to compete with yet.

Orrah Scruggs, who we found renting a movie from Redbox, said, "It's easier, and it goes directly to your debit card. It's only a dollar if you bring it back the next day, and if you keep it an extra day, it's only another dollar.  It's cheap."

Chelsey Minshew says she prefers the ease of Netflix, which delivers the movies directly to her.

For an industry that was once the king of video rentals, chain stores like Movie Gallery are now being forced to figure out a new way of doing business.

The stores closing in Montgomery are located at 6631 Atlanta Highway and 9176 Eastchase Parkway. In Enterprise, the store on the Boil Weevil Circle is closing.

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