Hastings Entertainment

Hastings Entertainment
Public
Industry Entertainment retail
Fate Chapter 11 bankruptcy
Founded Amarillo, Texas (1968)
Headquarters Amarillo, Texas, USA
Products Books, magazines, CDs, DVDs, software, video games, boutique, accessories, coffee
Revenue Increase$531,346,000 USD (2009)[1]
Increase$6,933,000 USD (2009)[1]
Website http://www.gohastings.com/

Hastings Entertainment was a U.S. retail chain that sold books, movies, music, and video games and functioned as a video rental shop. As of 2016 it had 126 superstores, which were mainly located in the South Central United States, Rocky Mountain States, and in parts of the Great Plains and Midwestern states. Hastings Entertainment stores were also located in many college towns in the U.S. Hastings Entertainment was headquartered in Amarillo, Texas.

The company initially weathered the decline of video rental stores, outliving both Blockbuster Video and Hollywood Video. However, declining sales finally forced the company to shift its primary focus to collectibles and comic books in the 2010s. Through the early to mid 2010s, Hastings became the largest comic book retailer in the United States.[2] While this strategy initially benefited the company, it ultimately suffered from a decision made during a mass expansion in the 1990s to lease all of its properties rather than purchase them, which lowered the business' overall value.[3] Amidst ongoing rebranding, the company was sold to merchandising firm Draw Another Circle LLC in 2014 for $21.4 million. Hastings suffered under Draw's management, plunging the company $140 million into debt.[4] In an effort to save the company, Draw Another Circle named Jim Litwak the President and CEO of Hastings in December 2015; Litwak had previously salvaged Macy's and Trans World Entertainment from near-bankruptcy in the 1990s and early 2000s, respectively.[3] Litwak's management proved ineffective, and on June 13, 2016 Hastings filed for bankruptcy, with the intention of salvaging the company by either franchising it or selling it to one of 22 interested buyers. When no individuals or companies came forward, the company began closing all of its stores.

History

In 1968, the company was founded as a retailing division of Western Merchandisers, Inc., a books and music wholesaler. In 1990, Western Merchandisers became a subsidiary of Wal-Mart Stores, Inc.. In 1994, Wal-Mart sold Western Merchandisers to Anderson Media Corporation, and the former Western Merchandisers then operated as Anderson Merchandisers.[5]

On March 7, 2000, the company restated its earnings in the first three quarters of fiscal 1999.[6] On March 14, 2000, Hastings Entertainment, Inc. was sued for reporting profits of more than $12 million during the Class Period, while they used Hastings common stock to maintain false reports of the company's growth and profitability, by raising almost $40 million in an initial public offering.[7] Hastings paid $5.75 million for settlement.

Despite the closure of other video rental stores such as Blockbuster and Hollywood video, Hastings initially thrived in the early 2010s due to a diversification of merchandise. In 2010, the company opened an account with Diamond Comic Distributors, making Hastings the largest direct market comic book retailer in the United States. The comic sections of all stores were expanded in connection with the Diamond account.[2] The same year, the company opened up a sports equipment retailer called Sun Adventure Sport in Amarillo and later added a store in Lubbock, Texas.[8] In August 2011, Hastings opened Tradesmart, a store in Littleton, Colorado, specializing in used electronics, media, and novelties.[8]

In 2013, Hastings redesigned its stores to emphasize toys, gifts, action figures, and licensed and branded products, which had higher profit margins, as sales of books, music, and videos declined. The move also sought to combat the growing popularity of digital media, by emphasizing products which could not be downloaded.[9]

In 2012, after years of losses and with more losses projected in the future, the company's directors decided to shop the company to potential buyers.[9] In April 2014, Hastings agreed to be purchased by Draw Another Circle, LLC, a company controlled by merchandising executive Joel Weinshanker, for $21.4 million; another Weinshanker subsidiary had already owned 12.4 percent of Hastings. The buyout deal called for Hastings CEO John Marmaduke, son of the chain' founder Sam Marmaduke, to retire with a $1.5 million cash payment and for stockholders to be paid off at $3 a share.[9] The purchase was completed in July 2014.[10]

In November 2014, Draw Another Circle—the parent company of Hastings Entertainment—purchased MovieStop, a 44-store regional chain in the southeastern U.S. that sold primarily used movies and related entertainment merchandise.[11] All MovieStop locations were closed in the summer of 2016.

In June 2016, Hastings Entertainment filed for bankruptcy protection.[12] Under Draw Another Circle's management, the company had suffered heavy losses, accumulating $140 million in debt. Hastings Entertainment was granted an extra week to find new investors or restructure the business as a franchise. Failing to find any interested parties, the company went up for auction on July 20, 2016. Although several businesses bid with the intention of continuing to operate Hastings, they were outbid when liquidation firms Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC pooled their resources to outbid them. Rather than allow the few Hastings that were still profitable to continue operating, Hilco and Gordon Brothers opted to liquidate the entire company.[13] Calendar Holdings LLC, operator of calendars.com and the Go! calendar and game retail stores, purchased Hastings' intellectual property at auction for $300,000. One fan of the Hastings franchise, Mason Morgan, stated on an online video he contacted the Calendar Holdings LLC to find out what they plan to do with the stores. He said they have yet to respond to any of his emails.[14]

The number of retail stores in 23 states was about 150 a few years before bankruptcy[15] with 3,850 employees[16]

Entertainment retailer Vintage Stock took over at least five former Hastings locations.[17]

References

  1. 1 2 Fiscal Year 2009 Annual Report. Retrieved 18 May 2007.
  2. 1 2 Johnston, Rich. "Hastings – The First National Comic Store Chain In US?" Bleeding Cool. June 21, 2010.
  3. 1 2 Newton, Creed. "Hastings president: 'Everything is on the table.'" 29 June 2016.
  4. ↑ Chiappardi, Matt. "Unsecured Creditors Blast Draw Another Circle Sales Plans" 1 July 2016.
  5. ↑ Bowser, David. "Local companies have broad reach". Amarillo Globe-News. 27 February 2005. Retrieved 18 May 2007.
  6. ↑ "Hastings Entertainment Announces Non-Cash Accounting Adjustment and Fourth Quarter Charges".
  7. ↑ "Hastings Entertainment, Inc.".
  8. 1 2 Karen Smith Welch (September 21, 2013). "Hastings concept stores gain traction". Amarillo Globe-News. Retrieved September 8, 2015.
  9. 1 2 3 Karen Smith Welch (April 23, 2014). "Report: Hastings saw bleak future". Amarillo Globe-News. Retrieved September 8, 2015.
  10. ↑ "Hastings Entertainment, Inc. Announces Completion of Acquisition by an Affiliate of Joel Weinshanker". Marketwatch.com. PRNewswire. July 15, 2014. Retrieved September 8, 2015.
  11. ↑ Erik Gruenwedel (November 3, 2014). "MovieStop Acquired by Hastings Entertainment Owner". Home Media Magazine. Retrieved September 8, 2015.
  12. ↑ Hastings Files for Bankruptcy; Seeks Buyer Publishers Weekly, June 13, 2016
  13. ↑ Truitt, Jason (July 21, 2016). "Hastings Stores Closing, Including Richmond's". Pal-Item. USA Today. Archived from the original on October 13, 2016.
  14. ↑ "In re: DRAW ANOTHER CIRCLE, LLC, et al." (PDF). omnimgt.com. September 23, 2016. Retrieved November 4, 2016.
  15. ↑ "Store list" (PDF). omnimgt.com. December 27, 2016. Retrieved December 27, 2016.
  16. ↑ Newton, Creed. "Hastings president: 'Everything is on the table.'"
  17. ↑ "Huckleberries hears …". The Spokesman-Review. September 23, 2016. Retrieved November 4, 2016.

Further reading

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