More stores, revenue sharing key
NEW YORK — Video retailer Hollywood Entertainment said Tuesday that revenue sharing and more stores helped narrow its net loss to $2.6 million in the second quarter from $3.9 million the year before. Revenues rose 45% to $205.6 million.
Excluding the acquisition of money-losing Internet entertainment site Reel.com, Hollywood Entertainment’s net income jumped 66% to $9.4 million.
Hollywood Entertainment chairman and CEO Mark Wattles said he is impressed by the growth of the online company and is “currently negotiating several strategic transactions in our Internet business designed to realize the value of Reel.com for shareholders.”
For the parent company, revenue-sharing arrangements with major studios are boosting sales as the video retailer added 81 new stores in the quarter. With 1,403 video superstores in 43 states as of June 30, Hollywood Video said it is adding new stores at the rate of one a day.