On this episode of the Global News podcastWhat happened to…? Erica Vella finds out what happened to the movie rental store, Blockbuster.
As a former multiple-franchiser owner, Alan Payne is familiar with Blockbuster; he had owned over 40 stores in Alaska and Texas.
“I put together the money and bought the stores in early 2000 and that’s when I became a franchise owner. … We built up a relatively good-sized infrastructure to run a company of that size,” he said.
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Early on, however, Payne said he noticed issues with how the company had been operating.
At its peak, there were over 9,000 Blockbuster stores around the world and many of the stores were corporately owned.
“There were about 5,000 Blockbuster stores in [the U.S.], and about 1,200 of those were franchise owned,” he said.
“They had used the brand to branch into all sorts of things; they had a blimp. … There was a Blockbuster credit card.”
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While it appeared that Blockbuster was growing, Payne said he identified many financial flaws.
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READ MORE: Only one Blockbuster remains in the U.S. as two more stores close
“To put it in perspective, the average Blockbuster store in 1994 was doing about $900,000 in volume. By 1996, it had declined to $700,000. In a retail business that’s largely fixed cost, that just kills your economics,” Payne said.
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“Their cash flow had fallen — had declined — to the point that they couldn’t fund their continued expansion and they were still opening several hundred stores a year, but yet their profits were declining.”
WATCH: Only one Blockbuster remains in the U.S. as two Alaska stores announced they would be closing their doors this weekend.
U.S. down to one last Blockbuster
In 2010, Blockbuster declared bankruptcy, and by 2014, all corporate-owned stores had shuttered.
Payne watched as each of his stores shut down and in 2018, Alan saw his last stores in Alaska close.
READ MORE: Dish to close rest of its Blockbuster stores in US
He still remembers his last trip to Alaska, when the last two stores closed.
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“I remember going to the airport to leave and thinking, I was walking in that airport for the last time to do that, at least on business anyway,” he said.
“And when I sat down to wait for the flight, I said, for when I leave, this is it.”
On this episode of What Happened To…? Erica Vella speaks to Payne about the rise and fall of Blockbuster and finds what caused the once-global brand to disappear. She also speaks to the general manager of the last Blockbuster to hear how she kept her store running.
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