Corporate Profile
Movie Gallery, Inc is the second largest North American home entertainment specialty retailer with approximately 3,500 stores located in all 50 U.S. states and Canada operating under the brands Movie Gallery, Hollywood Video and Game Crazy. The Game Crazy brand represents approximately 550 in-store departments and 11 free-standing stores serving the game market in urban locations across the Untied States. Since Movie Gallery’s initial public offering in August 1994, the Company has grown from 97 stores to its present size through acquisitions and new store openings.
Business Description
Movie Gallery, Inc. is a home video specialty retailer primarily focused on the rental and sale of DVD and VHS movies and video games. The Company owns and operates approximately 3,500 retail stores throughout North America under the subsidiaries Movie Gallery, USA and Hollywood Entertainment Corp.
The Movie Gallery subsidiary stores operating under the Movie Gallery brand primarily target small towns and suburban areas. By focusing on rural and secondary markets the Company is able to compete very effectively against the independently owned stores and small regional chains in these areas. Key strategies are to take advantage of greater purchasing economics, effective labor strategies and a strong, proven business model.
The Hollywood Entertainment subsidiary stores, operating under the Hollywood Video and Game Crazy brands, primarily target urban centers and surrounding suburban neighborhoods. Key strategies for success in this marketplace are exceptional customer service, innovative marketing and merchandising programs, a strong brand image and solid in-store execution.
The combined companies create a dynamic national organization with a strong presence in both rural and urban markets.
History
Movie Gallery was formed in 1985 by Joe Malugen and Harrison Parrish in Dothan, Alabama. Through its wholly-owned subsidiary, M.G.A., the Company's founders began operating video specialty stores in southern Alabama and the Florida panhandle, and franchising the Movie Gallery store concept. By June 1987 the Company owned five stores and had a franchise operation of 45 stores. In 1988, the Company began to consolidate the franchisees into company owned stores. By 1992, The Company had a total of 37 stores and annual revenues of $6 million.
In August 1994, the Company completed an initial public offering of its stock. With the proceeds from this offering, the Company began to quickly complete acquisitions of various video chains, primarily in the southeast. In early 1995, the Company raised additional public funds and continued the acquisition and development of stores. By the middle of 1996, only 22 months after beginning its aggressive expansion strategy, Movie Gallery had grown to over 850 stores through over 100 separate acquisitions.
In 1999, Movie Gallery announced plans to build 100 new stores. The Company completed an 88-store acquisition of Blowout Entertainment in May, and ended the year with more than 950 locations in 31 states.
In 2000, Movie Gallery again set its goal at opening 100 new stores and relocating 25. This goal was met and surpassed.
The Company moved forward with its largest single-chain acquisition to date, expanding its base of stores by 30%, in late December 2001. This addition of Video Update stores to the Movie Gallery family launched the Company's international presence with 100 retail locations in Canada.
Following the completion of the Video Update acquisition, Movie Gallery continued to execute an aggressive growth strategy. Movie Gallery achieved the 2,000 store mark in 2003.
In 2005, the Company completed the largest acquisition to date with the Hollywood Entertainment merger. This combination of companies increased the store total to 4,700 with revenues in excess of $2.5 billion. In addition, Movie Gallery strengthened its presence with 61 new stores in Western Canada with the acquisition of VHQ Entertainment.
In 2007 the Company filed for Chapter 11 bankruptcy protection under the U.S. Bankruptcy Code. Through the restructuring Movie Gallery effectively addressed its financial and operational challenges and laid a strong foundation for profitability and future success. The Company now has a stronger balance sheet, cash to fund operations and a streamlined store portfolio.
The Company emerged from Chapter 11 in 2008 and appointed a new chief executive officer – C.J. Gabriel, Jr. Joe Malugen continues to serve on the Movie Gallery Board of Directors.
Further Information
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