Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, September 8, 1995 TAG: 9509080083
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: MEGAN SCHNABEL STAFF WRITER
DATELINE: LENGTH: Medium
Greenville, S.C.-based Moovies Inc. said Thursday it has acquired King Video along with eight other regional video retailers, but King said business will continue pretty much as usual at the Southwest Virginia stores.
"We really want to emphasize that we're going to be the same bunch of smiling faces," said King, who started the chain 13 years ago and opened stores in Blacksburg, Christiansburg, Radford, Roanoke and Salem. King will continue to oversee former King Video stores as a regional director for Moovies.
The sale, expected for several months, leads to a gradual transition from King Video to Moovies. Over the next six months to a year, signs will be replaced with Moovies' signs and logos, said John Taylor, president and CEO of Moovies. The selection of videos will increase, he said, but rental prices will remain the same.
"There are some people who really enjoy patronizing a hometown business," King said. "We hope they won't be too disappointed that we're now part of a larger organization. We want to maintain our hometown image as much as we can."
But competing with video giants such as Blockbuster has become more and more difficult for small companies, he said. That was one reason he accepted the offer to become part of a larger chain.
"The price was right, and they've assembled a really good team of people with good video experience," King said. "They offered me the chance to be a part of a pretty rapid expansion." Terms of the deal were not disclosed.
Moovies began with 11 stores in the Carolinas and Georgia. The company decided it needed to become larger if it wanted to compete with Blockbuster, Taylor said, and so in August it completed a deal through which it acquired nine regional video chains.
The chain now has 87 stores in Ohio, Pennsylvania, New York, Connecticut, Virginia, Georgia, the Carolinas and New Jersey. Taylor said the purchase makes Moovies one of the five largest video specialty companies in the nation.
Moovies plans to open at least 15 superstores by the end of 1995, Taylor said. The first six, set to open by Sept. 30, will include stores in Charlotte and Raleigh, N.C.
Moovies went public in August with an initial offering of 3.6 million shares of common stock, which began trading Aug. 4 on the Nasdaq under the ticker symbol MOOV. The stock was offered at $12 per share. On Thursday, it closed at $20.25 a share, down $1.25 from Wednesday's close.
Moovies reported pro forma net income or estimated income based on the anticipated merger of $2.4 million in 1994 and pro forma net income of $1.7 million for the first six months of 1995. Moovies Inc. now has more than 1,100 employees and close to 1 million members.
Perhaps most importantly, at least for the 73 former King Video employees who now work for Moovies, Taylor said that Moovies staff will not have to wear the cow-print vests that were the uniform at the 11 original Moovies stores.
"We're looking at something along the lines of a knit shirt," Taylor said.
by CNB