Hollywood Video Closures Affect Two Local Locations

PALM DESERT – Movie Gallery Inc., owner of the Hollywood Video movie rental chain, has filed for Chapter 11 protection and plans to close 805 stores – about a third of its total.

Two of those stores are located here in the Coachella Valley.

Today is the last day forvideo rentals, and starting tomorrow the Palm Springs and Cathedral City locations will begin selling off merchandise at half price.

The Palm Springs location is located at the corner of Sunrise and Vista Chino. The Cathedral City location is at Ramon and Date Palm Drive.

The Indio store on Highway 111 will remain open. Also two locations in the High Desert, one in Yucca Valley and the other in 29 Palms will also remain open.

According to a salesperson at the 29 Palms location they will remain open because they do great business with the military population at the base.

Its the second trip through bankruptcy court since 2007 for Movie Gallery. The company is struggling with competition from Netflix Inc.’s mail delivery service and Redbox’s $1-per-night kiosk rentals.

It has closed more than 2,400 of its stores in the past three years. Court filings Tuesday indicated it has about 2,600 outlets now.

It says the company continued to see “significant” losses in 2009.

Annual revenue fell $546.3 million, or 28 percent, to $1.4 billion.