Movie Gallery to close in Brainerd, stay open in Baxter

The Movie Gallery, on Washington Street Northeast, is one of hundreds of stores to close after the movie rental chain announced it was filing Chapter 11 bankruptcy.

The Movie Gallery in Baxter is remaining open, along with the Movie Gallery in Little Falls, according to the company's Web site on the restructuring.

Reached at the Movie Gallery in Brainerd, Tasha Shepard said she's worked at the store for five years and now expects to start over again looking for work. Shepard said staff members were hanging up signs and working on pricing inventory Thursday for the closing.

Shepard said the closing didn't come as a surprise.

Movie Gallery reported Thursday the company filed voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Eastern District of Virginia, "to address the company's capital structure and reorganize its business operations."

"The restructuring will include the immediate liquidation and closure of approximately 760 stores in the U.S. Store locator tools on the Movie Gallery, Hollywood Video and Game Crazy Web sites can be used to confirm the status of individual stores. After these initial store closings, the company will operate 1,906 stores in the U.S., including 1,111 Movie Gallery, 545 Hollywood Video and 250 Game Crazy locations. The company anticipates closing additional stores during the Chapter 11 process."

The Associated Press reported at least 14 stores in Minnesota are among those closing as the company files for bankruptcy protection.

Media Gallery reports after economic realities facing the business, it worked for the past two years to close several hundred underperforming stores to make the company successful but those "actions were not sufficient."

"After consideration of all available alternatives, the company determined that a Chapter 11 filing was the appropriate next step in its ongoing restructuring.

"Movie Gallery's goal is to emerge from the restructuring process with a new and sustainable business model centered on a smaller base of profitable stores."

The company is based in Wilsonville, Ore., and reports it is the second largest North American video and game rental company. It operates stores in the United States and Canada.

RENEE RICHARDSON may be reached at renee.richardson@brainerddispatch.com or 855-5852.