Hastings Entertainment, an Amarillo-based retailer of music, books and video games, filed for bankruptcy with a plan to continue closing stores and sell the rest of its assets if it can.
The rise of digital-media providers such as Amazon.com and Spotify has roiled entertainment retailers, pushing chains like Blockbuster, Borders Group and Tower Records out of business.
In court filings Monday in Delaware, Hastings Chief Financial Officer Duane A. Huesers blamed the “tremendous growth” of online merchants for its downfall, citing “a decline in the market for physical media properties like music, movies, books, games and media rentals.”
The company requested court permission to continue closing 40 MovieStop locations under an arrangement reached in May with liquidator Gordon Brothers Retail Partners and to auction the remainder of its assets.
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No buyer has yet emerged, but the company needs to sell quickly because it lacks the money to operate beyond the middle of July, according to court papers. If the auction doesn’t attract someone willing to keep the remaining stores open, the company will liquidate, selling assets to the best and highest bidder, Hastings said.
Hastings, founded in 1968, has about 3,500 employees and 123 superstores in 19 states, according to court filings. The company went private when Joel Weinshanker’s Draw Another Circle LLC acquired it almost two years ago.
According to its website, the company has 30 stores in Texas, including locations in Waxahachie, Waco, Sherman and Greenville. There are no stores in Dallas-Fort Worth.
The chain generated revenue of $401.1 million in 2015. As of May 31, it had inventory worth $130.6 million, at cost. Its Chapter 11 papers listed a $70 million obligation under a credit agreement with Bank of America and a $10 million obligation under a term loan from Pathlight Capital as secured debt. Unsecured debt includes around $59 million in trade claims.