Blockbuster to close stores in Ashland, Medford

Blockbuster Video stores in Ashland and the Larson Creek Shopping Center on North Phoenix Road in Medford are closing.

The two movie-rental stores stopped renting videos on Thursday and will cease operation after the second weekend of April. They will remain open while they sell their remaining inventory.

Blockbuster stores on Biddle Road and West Main Street in Medford, and another in Central Point, emerged unscathed for now.

The closures are part of a deal announced earlier this week, in which the nation's largest video-rental chain agreed to sell itself for $290 million to a consortium of its debt-holders. The agreement gives the potential buyers the option to convert Blockbuster's Chapter 11 reorganization into a Chapter 7 liquidation.

Blockbuster said it would begin shuttering 609 of its approximately 3,300 stores by Feb. 28.

Questions were referred to a regional manager but a telephone message was not returned.

Blockbuster once was a juggernaut, rising from a single store in the mid-1980s to the point where Viacom forked over $8.4 billion to acquire it in 1994.

Its ubiquitous presence drove thousands of mom-and-pop operations out of business during its two-decade expansion. But the rise of Netflix, Red Box kiosks and streaming video drove a stake through the company's heart.

"It's never wonderful to see a corporation or business go out," said Andi Black, a manager at DJ's Video in Ashland. "It's amazing how times have changed. The video industry has definitely been on a roller-coaster, and it's important to change as much as you can."

DJ's, a relatively large independent operator, reduced its floor plan when it moved to 258 A St. last September.

Black said the demise of the Ashland Blockbuster likely will send new customers through DJ's door. "People who haven't tried the store before are going to check it out," Black said. "Maybe we'll get our name out there in a different way."

In recent days, the embattled Blockbuster chain has received late notices from creditors such as Universal Studios and Summit Distribution.

In a court filing earlier this week, Blockbuster said it had entered into an asset-purchase agreement with Cobalt Video Holdco, a "stalking horse" bidding group composed of private-equity and hedge funds Monarch Alternative Capital LP, Owl Creek Asset Management LP, Stonehill Capital Management LLC and Varde Partners Inc, which together own more than half of Blockbuster's senior secured notes.

A U.S. Bankruptcy Court judge in Manhattan has signed an order setting a March 2 hearing to establish procedures for bidding. The Cobalt consortium can walk away if the court doesn't approve its purchase by April 20.

If the bankruptcy court approves the bidding process, other bidders will have about 30 days to submit offers, and an auction would be held within a week of that deadline.

Reach reporter Greg Stiles at 541-776-4463 or e-mail business@mailtribune.com.

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