Hastings Entertainment Stores, which is a chain that has largely been popular because of its comic book merchandise, will be liquidating and closing all of its stores around the country by October 31, 2016. About a month ago, it was announced that the Texas-based Hastings had filed Chapter 11 Bankruptcy, and the company said that unless the business was sold or a major investor came in, it would have to downsize its corporate office and/or close down the entire Hastings chain. Apparently, the entire Hastings chain will be closed down, according to an article by the Amarillo Globe.
The company issued an open letter on their website in June that announced they were filing Chapter 11 bankruptcy along with their “corporate parent” (Draw Another Circle) and “sister brands” (Movie Stop and SPImages), but those stores would remain open. They also announced that they would no longer accept or honor future movie deposits, and existing deposits would only apply toward in-store purchases. The announcement also said that game rentals would no longer be available. Gift cards were also no longer available, and any gift cards would expire on July 13. The Hastings buyback program, which allowed customers to return books and movies for cash, was also suspended. The Passport program, according to the website, remains unaffected, and the company said all Passport benefits would remain intact, and they would continue to launch promotions on an ongoing basis.
Bidding for the company ended Wednesday afternoon, July 20, in a Delaware bankruptcy court, and an “everything must go” sale agreement was made, meaning that the stores must have everything sold by October 31 of this year. Proceeds from the sales will go to Bank of America and Pathlight Capital, who both provided capital to Hastings during the bankruptcy proceedings. The article said that Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC, which are both financial consultant and management companies, bought the company in a contractual joint venture. But instead of saving Hastings, the company will have to pay off their debts that total $139 million, according to the Wall Street Journal. The sale is expected to net only $106 million to $114 million, according to the courts. Creditors will receive 75 percent of the sales. If the sale exceeds the expected amount, the joint venture will receive an up-front fee of 6.5 percent on the excess, and any remaining amount will be divided equally between the venture and Hasting’s parent company, Draw Another Circle.
The Hastings Entertainment company, which was founded by Sam Marmaduke in 1968 in Amarillo, Texas, has a total of 126 stores around the country, including 36 in Texas alone. The agreement means that about 3,850 people, including 1,200 in Texas, will lose their jobs by October 31, 2016. The court documents in the bankruptcy require the company to give a seven-day notice to employees before they are terminated during the liquidation process, so some could lose their jobs before October.
An employee in Amarillo, who was not identified, said that there was “a feeling of limbo for employees at the store,” and that rumors of bidders coming to the rescue and imminent liquidation had been circulating. The employee said, “As far as I’m concerned, it’s business as usual tomorrow.”
Customers in Amarillo reacted with mixed emotions when asked about the company’s closing.
Alex Hernandez, 21, said that the news was unfortunate. “From what I’ve read, Hastings had a really big start here in Amarillo, and I think when it comes down to it, it’s hard to see companies go but that’s kind of how life is sometimes.”
Hernandez said that he bought comic books and vinyl records at Hastings, and it would be hard to find them in stores after Hastings closes.
“It’s a very niche store. Now that it’s not around, it’s going to be hard to find other options.”
Another Amarillo Hastings customer, Taylor Martin, 23, was disappointed, but not surprised by the outcome of the bankruptcy proceedings.
“We don’t buy a lot here but it’s nice to browse; you can do it on the internet but it’s not the same. A lot of people know there’s better deals on the internet so they buy on Amazon instead of in the store. And I do that too. I see a book that’s $14 and I know I can get it used on Amazon for like a penny.”
Are you surprised by the comic-book chain’s closing or do you think Hastings should be saved? Please comment below.
[Image Via Youtube]