Grove Hill Movie Gallery closing

The Movie Gallery store in Grove Hill is one of 520 being closed by the video rental chain as it struggles to cut costs and pay off debt.

The Dothan-based company said it was closing underperforming and unprofitable stores that operate under the Movie Gallery and Hollywood Video names.

The Movie Gallery stores in Jackson and Thomasville will reportedly remain open and Grove Hill employees will be able to transfer to one of them and not lose their jobs.

"This action will allow us to focus our resources on the approximate 4,000 stores that have a stronger operating performance and prospects for future growth," Chief Executive Joe Malugen said in a statement.

Movie Gallery stock closed at 46 cents a share Monday in Nasdaq trading. Prices have raged from a low of 25 cents a share to $5.29 a share over the past year.

Movie Gallery reported losing $14.9 million in the first quarter of 2007 as compared to a profit of $40.3 million during the same period last year.

Movie Gallery has struggled with debt since 2005 when it purchased the rival Hollywood rental chain for $1 billion. The company is said to be considering options, including a possible sale.

In-store rental revenues have been failing industrywide for some time as a result of competition from online rentals.

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