Hastings Entertainment Inc. has announced it is filing for Chapter 11 bankruptcy and is up for sale.
For now, the Amarillo, Texas-based company indicates its 127 stores in 20 states, including five other locations in Kansas including one in Garden City, will remain open.
However, the company announced it will no longer honor gift cards after July 13.
Jim Litwak, president and COO of Hastings Entertainment Inc., posted a letter to customers on the company’s website indicating gift cards will expire on July 13. In addition, Hastings will no longer accept or honor customer deposits for future movie purchases, but existing deposits may be applied to additional in-store purchases; game rentals are no longer available; and the store buyback program has been suspended.
“We have reached a point where we do not have the necessary cash on hand to continue operating our business,” Litwak wrote. “A sale process, facilitated by Chapter 11, will help us determine how we can best maximize the value of our assets for the benefit of our stakeholders.”
Other Hastings stores are located in Hutchinson, Dodge City, Hays, Lawrence and Manhattan.
The company has recently refreshed 20 Hastings stores across the country, according to a news release, and is seeking a buyer to purchase and continue the brand.
“We believe we are on the right path, but we need additional financial support to fully execute our plan for the future,” Litwak wrote.
Stores will remain open through a 30-day period in which the company hopes to find a purchaser. Last week the company announced that failure to find a buyer could mean closing its entire chain of stores and it issued mass layoff warnings to its headquarters and distribution center.
Owned by the Marmaduke family for more than 40 years, Hastings was sold about two years ago for $21.4 million to Delaware-based Draw Another Circle, LLC. The company cited declining demand for physical copies of movies, books, music and games as well as elevated pressure from competitors as reasons for the bankruptcy filing.