Blockbusters opened its first store in the UK in 1989, but has fallen into administration (Reuters)
Film rental store Blockbuster UK has fallen into administration, putting thousands more high street jobs at risk in a beleaguered retail sector.
Accountancy firm Deloitte has been appointed administrator for the firm, which has struggled to adapt to intensifying competition from online rivals such as Amazon and Lovefilm.
"We are working closely with suppliers and employees to ensure the business has the best possible platform to secure a sale, preserve jobs and generate as much value as possible for all creditors," said Deloitte's Lee Manning.
"The core of the business is still profitable and we will continue to trade as normal in both retail and rental whilst we seek a buyer for all or parts of the business as a going concern.
"During this time gift cards and credit acquired through Blockbuster's trade-in scheme will be honoured towards the purchase of goods."
Almost 4,200 people are employed across 528 stores in the UK, the first of which opened in March 1989.
The UK became Blockbuster's largest business outside of the US, where it was born.
It follows entertainment business HMV Group and digital photography specialist Jessops, both of which have recently succumbed to the difficult trading environment.
"Coming just one day after the administration of high street stalwart HMV was confirmed, Blockbuster's demise shares many of the same characteristics," said Joseph Robinson, Lead Consultant at retail analyst Conlumino.
"Unfortunately, the retailer has been unable to effectively refresh an increasingly irrelevant and unfashionable proposition.
"This outcome was always inevitable, particularly considering the fall into chapter 11 administration of Blockbuster's US parent in 2010. Its UK arm (a separate legal entity), had attempted to provide breathing space amid declining sales and profits since 2009; focusing on cost control, rationalising its store portfolio and experimenting in complementary categories such as mobile phones and iPods - but to no avail.
"In particular, despite closures, its estate of 528 stores is far too large and not in proportion to the current realities of the markets in which it operates.
"Most pertinently, Blockbuster has succumbed to an evolution in the way people are consuming media.
"Prevailing improvements in broadband access and speeds over the last decade have provided fertile ground for the emergence of direct-to-consumer rental services such as Netflix and Lovefilm, in addition to the introduction of on-demand services from the likes of Sky and Virgin."
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