Blockbuster CEO Remains In Denial as the Annual Meeting Looms... and the Clock Ticks
With Blockbuster's annual meeting coming up in just a couple of days and the company teetering on the brink of bankruptcy, company CEO Jim Keyes is keeping the water churning up to the last minute. He gave a blithe, clueless interview to the Dallas Business Journal last week in which he insisted everything was really just fine at the video-rental giant, though he had no news on whether a financial rescue might be in the offing. At the same time, the company issued its second filing in two weeks essentially begging shareholders to ignore a fed-up investor who's trying to win a board seat.
Will Blockbuster (BBI) declare bankruptcy at the meeting? Announce a last-minute financial rescue? Have nothing meaningful to say at all? Stay tuned for Thursday. In the meanwhile, Keyes continues to flaunt his lack of appreciation for the gravity of Blockbuster's situation.
In the business-journal interview, Keyes likens Blockbuster's current woes to that of convenience-store chain 7-Eleven, which Keyes helmed a few years back. Saying the search for $150 million or more in funding is merely "contingency planning," Keyes says 7-Eleven took a decade to turn around successfully, while Blockbuster is a mere three years into its turnaround plan, and moving along nicely, thank you.
Huh? This is a company that plans to close about 500 stores in the coming year. But everything's o-kay in Keyes' world view. The inability to even admit the company has serious problems doesn't bode well for this chain's future.
Here's the basic difference between turning around 7-Eleven and turning around Blockbuster that has apparently escaped Keyes' notice: No disruptive technology cropped up that made it possible for 7-Eleven customers to start ordering bags of chips over the Internet instead of buying them at convenience stores. Blockbuster faces massive changes that are reshaping its entire industry. This one's going to be tougher to turn around.
On the filing front, Blockbuster wanted to reiterate to shareholders that two proxy advisory firms came out in support of Blockbuster's slate of directors and against upstart investor Gregory S. Meyer, who founded DVDXpress. He sold that company to Blockbuster archrival Redbox, operated by Coinstar (CSTR). Firms Proxy Governance and Egan-Jones Proxy Services proclaimed that Meyers' strengths are not relevant to the movie-rental company's current challenges.
Really? He created a precursor of the video-rental machines that are now sucking the life out of Blockbuster, but he doesn't know anything that could be helpful? If Blockbuster goes under, not listening to Meyer's advice may be the last big "if only" in this company's story.
Photo via Flickr user Rocket Racoon Related:
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