Blockbuster’s Sales Are Bouncing Back

When was the last time you made it a Blockbuster night?

As for me, it was probably somewhere in the neighborhood of a year or so ago. This is why I was extremely surprised by an article in Friday’s Wall Street Journal. Blockbuster (Ticker: BBI) posted a 4.4 percent increase in fourth quarter sales! (This figure refers to U.S. stores open for one year or more.)

Photo by imjoshdotcom, Courtesy of flickr

I had to press rewind because I couldn’t believe my eyes.

I remember when Blockbuster came to my neighborhood. The Ma and Pa video store across the street didn’t stand a chance.

Whenever I went to the Blockbuster, I encountered one of two things (sometimes both): a line of at least ten people in front of me or a rack of ten empty boxes where the movie I wanted  was supposed to be.  

Eventually, the lines thinned out and more of my favorite movies were available. Then came Netflix. And there went my Blockbuster. The location is now a real estate office.

Anyway, given my experiences with Blockbuster and the growing popularity of Netflix, I figured that Blockbuster would soon go out of business. Had the company stuck to video rentals, perhaps the closing would’ve already happened.

Blockbuster has expanded its product offering. The fourth quarter sales gain was actually driven by sales of video games, game merchandise and consumer electronics.

Perhaps, I would have noticed the shift in products if I had been to a Blockbuster recently. However, I did notice that Blockbuster quietly dropped the word “Video” from its name on many of its locations.

The sales increase is definitely good news, but on Friday shares of Blockbuster fell 15 percent (closing at 38 cents each). My guess is that Blockbuster’s credit concerns are hogging the spotlight.