NEW YORK -- If the late-year financial results being announced by big video specialty retailers are an indication, the rental industry has turned around from the disappointing numbers posted earlier in 1997.
Led by the news that Blockbuster Entertainment Group, Dallas, of Viacom here, had shown a significant improvement in operating revenues, other retailers also reported gains. At Blockbuster, revenues increased 7% in the fourth quarter to $1.02 billion, with cash flow gaining 30% to $115.2 million.
Movie Gallery, Dothan, Ala., the third-largest video-specialty chain, reported an 8% increase in same-store sales for the fourth quarter. This was partly attributed to increases in video-game rentals and sales of previously viewed tapes. For video rentals alone, same-store gains were 4%. Hollywood Entertainment, Portland, Ore., the second-largest chain, had not yet reported its results, but its depressed stock rose about 10% to $11 a share when Viacom released the news about Blockbuster.
Meanwhile, BlowOut Entertainment, Portland, Ore., also reported good results for the fourth quarter. BlowOut operates leased-space departments in stores of Ralphs Grocery Co., Compton, Calif.; Wal-Mart Supercenters, Bentonville, Ark.; and Super Kmart Centers, Troy, Mich.
Same-store sales for the operator rose 19% for December, 9% for the fourth quarter and were even for the year ended Dec. 31, 1997, compared with the same periods in 1996. Revenues for BlowOut in the fourth quarter were up 4.6% from 1996 to $8.6 million, with improved margins and a reduced net loss. Revenues for the year were up 4.3%.
