Entertainment seller Hastings files for bankruptcy; stores will remain open

Entertainment store Hastings, which sells music, books, movies, video games and related merchandise at four locations in Spokane and Coeur d’Alene, has filed for bankruptcy ahead of plans to sell the company.

During the sale process, which a company spokeswoman said should be completed over the next 30 days, hours and jobs at existing Hastings stores will not be affected.

However, the retailer has suspended its buyback program, video game rentals and down payments to reserve copies of movies. All store gift cards must also be redeemed by July 13, according to an announcement from Jim Litwak, president and chief operations officer of the company.

“We believe we are on the right path, but we need additional financial support to fully execute our plan for the future,” Litwak wrote in a letter to customers posted Monday on the Hastings website.

Store representatives at Hastings locations in Spokane and Coeur d’Alene declined to comment Tuesday.

The 19-page petition for bankruptcy was filed Monday in Bankruptcy Court in Delaware. Hastings, which operates 123 stores in the United States, was founded in Amarillo, Texas, in 1968. Bank of America has dedicated $90 million in funding to allow Hastings and its parent company, Draw Another Circle, to meet their financial obligations through July 13.

The company’s largest debts are owed to Universal Studios Home Video, at $3.7 million, Fox Home Entertainment, at $3.3 million, and Sony Pictures Home, worth $1.2 million, according to bankruptcy filings.

The Hastings bankruptcy filing follows woes for several businesses providing similar services.

Blockbuster, once the leader in home video rental, filed for bankruptcy protection in September 2010 before being bought by satellite provider Dish Network. Borders, a former bookstore chain, was bought by rival Barnes and Noble after applying for Chapter 11 bankruptcy protection in February 2011.

In the letter to customers, Litwak said the bankruptcy would enable the company to evaluate potential buyers while keeping its doors open. In a news release, the company said it would have more to say about the future of the brand in July.