Hastings' parent company files for bankruptcy

Another national company with ties to Southeast Missouri initiated filings Monday for Chapter 11 bankruptcy.

Draw Another Circle, the parent company of Hastings Entertainment LLC and its sister brands, SPImages and MovieStop, is evaluating offers for the assets of Hastings in an effort to maximize stakeholder value.

According to a news release, Hastings will continue to operate as usual while potential offers are evaluated, maintaining associates’ existing wages and benefit programs.

Draw Another Circle has secured $90 million in new debtor-in-possession financing to help ensure the businesses can meet their financial commitments throughout this process.

A letter from Hastings Entertainment Inc. president and COO Jim Litwak was posted on the company’s website Monday morning. In it, he said the bankruptcy filing will “help to prepare our business for the intended sale while also providing additional protections and financing to allow us to serve you as usual.”

Several customer programs have been discontinued on the heels of the announcement. According to Litwak, Hastings no longer will accept or honor customer deposits for future movie purchases; existing deposits will be applied toward additional purchases in the store.

Game rentals also no longer will be available, and the store’s buyback program has been suspended. Store gift cards will expire July 13.

Litwak cited increasing competition and decreasing demand for physical-media properties as factors challenging the company’s success.

“We have made significant progress with our remerchandising strategy and with other initiatives aimed at increasing profitability,” Litwak wrote.

However, he said, the acquisition of MovieStop and SPImages caused greater financial strain, leaving their balance sheet weakened.

“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,” Litwak wrote.

Hastings opened its first store in 1968. The company has served Southeast Missouri in its 22,000-square-foot Town Plaza location since 1995.

Several other national companies have filed for bankruptcy this year that resulted in the closing of Cape Girardeau businesses. Ryan’s Steakhouse, Bob Evans and Hancock Fabrics all are casualties of the bankruptcy of their parent companies.

Neither Hastings nor its parent company has announced any plans for closing. They are holding out hope for a sale.

A representative at the Cape Girardeau Hastings store declined to comment.

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