BLOWOUT: A POWERFUL FORCE

DAN ALAIMO

PORTLAND, Ore. -- Rentrak Corp. here has consolidated all of its video retailing operations under one new company, Blowout Entertainment.

The new entity, headquartered in Effingham, Ill., now operates 155 video rental departments in supermarkets and supercenters. It is made up of Entertainment One, Effingham, which Rentrak bought in May; Supercenter Entertainment, Dallas, which it bought in September, and Supermarket Video, Encino, Calif., a joint venture of Rentrak and Culture Convenience Club of Japan started in 1992. Rentrak is its parent company.

Blowout is now the dominant player in supercenter video rental operations. The only other significant company involved is Trans World Entertainment Corp., Albany, N.Y., which runs a handful of departments in Super Kmart Centers. Blowout now operates 123 video rental departments in Wal-Mart supercenters, 25 in Super Kmart Centers, four in Ralphs stores in southern California and three stand-alone, sell-through specialty stores that Rentrak had been operating. The company opened shops in 14 of the 21 Wal-Mart supercenters that opened Oct. 25 and will open about four more by the end of the year. All this growth has taken place without any significant additions to its headquarters staff in Effingham, said Steve Berns, Blowout president. The company opened 18 Blowout Video shops in 12 states in a 10-day period, while continuing to work at incorporating the operations of the 70 stores bought from Supercenter Entertainment. "This is the result of a lot of people's hard work and effort," said Berns. The company will be in "the majority" of the 110 supercenters Wal-Mart plans to open next year, and hopes to be in many of the 25 to 30 Super Kmart Centers expected to open next year. Expansion of the Ralphs program also is in the works, and Blowout is looking at supercenters being opened by other retailers, including Target Stores, Minneapolis, Berns said.

The company recently closed four departments it operated in stores of Riser Foods, Bedford Heights, Ohio, because of the rapid expansion of the supercenter departments, he said. Kmart plans to expand its supercenters in Riser's Cleveland marketing area, which may be another reason for the closings, industry observers noted. While the supercenters are expanding rapidly, Riser was moving slowly on expanding the video program, the observers added. Some in the video industry have questioned whether these supercenter departments can ever become profitable. But Berns said the departments' growth parallels that of the supercenter concept. "In the limited number of stores we've had open for over a year, the number of new customers continues to grow at a significant rate as people get used to this overall concept of one-stop shopping," he said. "Wal-Mart is creating market share," said Terry Monroe, Blowout's chief operating officer. "Our older stores continue to grow and grow as same-store sales climb."