Hastings Files Chapter 11 Bankruptcy, May Close All Stores
UPDATE: (6/15/16): Hastings Announces Expiration Date for Gift Cards, Suspends Buyback Program
UPDATE (6/13/16): Hastings' parent company, Draw Another Circle, has now filed for Chapter 11 bankruptcy. Included in the bankruptcy sale are Hastings' sister companies SPImages and MovieStop.
"As part of the Chapter 11 process, all potential buyers will have the opportunity to submit offers for the Hastings and SPImages business assets” the company said in a statement released Monday.
“If more than one offer is received, an auction process will be held to ensure the highest or otherwise best sale is achieved for each business,” they continued.
If a sale agreement cannot be reached, Hastings may close all 126 of their stores, including the Wichita Falls location.
Hastings Entertainment Inc. has issued a warning to all headquarters and distribution center employees of an impending mass layoff, plant closing or even the closing of the entire Hastings chain.
After struggling to adapt to a decline in consumer demand for the physical media and rentals that maintained their business, Hastings President and COO Jim Litwak issued two statements to employees announcing a 60-day warning of a mass layoff that could affect nearly 400 Amarillo employees, and that the company is currently seeking investors or buyers to help with the financial strains the company is dealing with.
KFDA Newschannel 10 received two statements Friday from Vice President of Marketing and Advertising Kevin Ball,
As part of our ongoing efforts to improve our business performance, Hastings is executing a number of initiatives, including launching a new store model in 20 locations, which are already showing improved performance; making our Company more attractive for our customers, current owners and potential investors; and optimizing our overall cost structure. We are actively looking for opportunities to build on this momentum and position our business for long-term success. We will provide updates as there is news to share.
Hastings has been working diligently to overcome our business challenges and we have made significant progress with a remerchandising strategy and other initiatives aimed at increasing profitability. To continue our transformation, we have initiated a comprehensive process to identify a buyer or investor that will give us the additional financial stability we need to move forward. While we are hopeful a sale agreement will be reached, we also have a responsibility to prepare for all contingencies. As a result, we were obligated to formally notify our associates that, if a sale agreement cannot be achieved in a timely manner, we may need to begin downsizing our corporate office and/or closing the entire Hastings chain due to our continuing financial challenges. Our management team believes there are a number of parties that would be interested in acquiring our brand, and we are doing everything possible to create a strong future for our business and for this great team.
Hastings was founded in 1968 and sells movies, video games, electronics, books, comics, novelty gifts.