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Business News

Blockbuster receives bids to keep it going

Two restructuring firms are bidding to salvage part of Blockbuster out of administration, raising hopes for staff at the troubled DVD-rental company.

Gordon Brothers and GA Europe have lodged bids to run a slimmed version of Blockbuster as a going concern, following the 528-store chain appointing accountancy firm Deloitte as administrator in January.

It is unclear whether other parties are interested in the DVD group, which had almost 4200 staff when it collapsed.

Blockbuster had been battered by the inexorable shift to consumers buying DVDs online, at the big supermarkets and on Amazon, which also owns rival DVD-rental firm Lovefilm.com.

Deloitte is now evaluating the bids although the sale is complicated by the fact that Dish Network, the former parent and the satellite broadcaster, still owns the Blockbuster brand.

Gordon Brothers is thought to have bid for more than 200 of Blockbuster's stores that are still trading, while GA Europe is understood to be interested in about 150 shops. Both parties declined to comment.

The bids could see up to 1000 high street jobs saved, although Deloitte has already unveiled plans to close 324 of Blockbuster's stores.

Lee Manning, the joint administrator and partner at Deloitte, said: "We are hopeful of concluding a sale of the business. We are in discussions but it is more complex than a more straightforward process because we don't control the brand." Underlying losses at Blockbuster UK widened from £8.5m in 2011 to £11.2m last year. But as recently as 2009, the business made a pre-tax profit of £4.6m.

The camera specialist Jessops, the entertainment chain HMV and the fashion retailer Republic have failed this year. The sportswear group Sports Direct acquired Republic on Thursday.