How the drama unfolded at Blockbuster

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Blockbuster
Blockbuster has become the latest high street store to go into administration. Photo: Stefan Rousseau/PA Archive

So how did another big name on the high street fold?

For some time, Blockbuster was in danger, under attack from online competitors, as more of us choose to watch films from the comfort of home.

But with more than half of the stores thought to be in good shape, executives hoped to carry out a CVA - A 'company voluntary arrangement'.

That is essentially a deal between a struggling firm and its creditors, that stops people calling in their debts and gives management some time and space to try to sort things out.

But that could only work if the company had some cash to play with.

They had aimed to bring in around £4.5 million in the recent period, but instead, found themselves having made a small loss.

That's on top of having lost around a million a month through the year. Although unlike other casualties, like HMV, they had no debts to the banks, without cash to turn things around the game was up.

HMV
HMV and Jessops have already gone into administration this year. Credit: Yui Mok/PA Wire

It is thought Blockbuster owes around £3 million to their suppliers and around £22 million to its parent company in the US - not impossible sums to pay with a turnover of around £200 million pounds.

But they had future liabilities to landlords of around £100 million. With custom draining away, looking ahead, they had no confidence they would be able to pay the bills.

So what is next? The administrators do not have any potential deals up their sleeves, but hope that a core of stores can survive.

But as film expert, James King, told us this afternoon: "The idea of going to a shop and choosing something is very outdated now".

Sadly for the 4,190 staff Blockbuster employ, it's hard to be certain of a long term future.