Blockbuster blame World Cup for profit drop

BLOCKBUSTER DVD rental recorded a £1.7 million profit for the year to last January, Companies House records show.

The year before, though, Blockbuster turned a £4.3 million profit.

What happened?

Well, according to Blockbuster themselves, the World Cup did.

The football was so popular over the summer of 2010, according to the DVD rental service, that without it they would actually have done better than the year before.

It's not as far-fetched as it sounds.

The Office for National Statistics reported at the time that a rush for flat-screen TVs and the like accounted for a 0.6% rise in high street sales before the competition.

Perhaps that's what was behind Bockbuster's plan, in September last year, to start stocking electricals in their DVD rental stores?

HMV, already on a knife edge, put a 10.6% drop in like-for-like sales down to the World Cup too.

In the black

Blockbuster has dropped a number of its least profitable high street stores this year and sales have fallen 12%, to £231 million.

But compared to Lovefilm and Blockbuster's US cousin, it's very firmly in the black.

Lovefilm only managed to turn a profit on its millions of investment cash this year, and then managed just £1.92m.

Blockbuster in the US, on the other hand, is on even shakier ground.

US pay-TV provider Dish Network bought the ailing business earlier this year, saving thousands of stores from closure.

The bash to the Blockbuster brand is pretty much the only impact on the UK business, however.

"Blockbuster UK is a separate legal entity, which is well-run and in a healthy financial condition with solid equity and no debt beyond normal accounts payables," said Blockbuster UK MD, Martin Higgins at the height of the US company's crisis.

"In the unlikely event that our parent company in the US goes bankrupt, it would have no operational impact on Blockbuster UK."

Can't get much clearer than that.

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