THE demise of the Blockbuster film rental chain is poised to accelerate a Scottish entrepreneur’s expansion drive south of the Border.
Frank Taylor, who built a rival chain of more than 30 Video Drive-In outlets in Scotland before diversifying into the tanning salon market, is mulling a bid for some Blockbuster sites that could trade for the final time today.
Taylor’s Indigo Sun chain now runs more than 40 salons – thought to be the largest wholly owned UK chain – and is eyeing rapid expansion.
“We’re keen to grow in England in particular and we’ll certainly look at some of the Blockbuster sites when they become available as it could be a quick way for us to accelerate our expansion plans,” said Taylor, whose Stirling-based firm employs some 300 staff.
Rentals of DVDs and games at Blockbuster will end this weekend as its 153 remaining stores face the axe with the loss of more than 1,200 jobs.
Administrators have confirmed the closure of 62 outlets, with 91 more also doomed if a buyer cannot be found.
Blockbuster had 264 stores and a 2,000-strong workforce when it went into administration last month, but these now look likely to have disappeared by the end of the year.
Administrators from Moorfields Corporate Recovery have already overseen the closure of more than 100 stores as part of the administration process.
Taylor launched Video Drive-In in 1982, renting out titles for £1.50 a night. It rapidly grew to become one of the sector’s largest players alongside the likes of Blockbuster and Global Video.
“It was a very profitable business with people paying £30 just to be members of the shops, but with the arrival of cable television and Sky we could see it was only going to decline and decided to move the business into tanning,” said Taylor.
“Tanning shops are also mainly aimed at a young market and operate from sites in convenient locations, so it was quite a natural move. We started gradually putting tanning beds into video shops before switching completely.”
Although there are still a handful of Video Drive-In shops operating in locations such as Aberdeen and East Kilbride, the bulk of Taylor’s chain has been converted into tanning salons under the Indigo Sun brand.
Taylor said he believed there was considerable potential for Indigo Sun, which currently turns over around £8 million a year, to grow significantly.
“The tanning market is dominated by independent operators but a lot of them don’t invest back in their businesses, which we think is important,” he said.
“We spend a lot of money on our sites to keep them to a high standard and have just refitted our site in Lothian Road in Edinburgh at a cost of around £110,000.”
A new location costs around £200,000 to develop and Taylor said the chain’s growth had given it more leverage when looking at locations.
“Our size does mean landlords take us seriously and see us as a good name to have in a row of shops,” he said.
Taylor said no-one in the video rental industry will have been surprised by the demise of Blockbuster. The chain had been rescued in March from an earlier administration by private equity group Gordon Brothers Europe.
The business had been hit hard by competition from supermarkets, as well as the rise of online rentals.
At the time of its initial collapse in January, it had 528 stores in the UK employing 4,190 staff.