Hastings Entertainment

Hastings Entertainment was an American entertainment retailer headquartered in Amarillo, Texas. The chain operated large-format stores primarily in the South Central United States, the Rocky Mountain states, the Great Plains, and selected Midwestern markets, with a particular presence in college towns. Its stores combined new and used books, recorded music, movies, video games, video rentals, electronics, toys, gifts, comics, collectibles, musical instruments, and other hobby or lifestyle merchandise. The business began in 1968 as West Texas News, a newsstand operation. It later became associated with Western Merchandisers, a wholesale distributor of books and music, and developed into a consumer-facing retail chain under the Hastings name. The company expanded aggressively during the 1990s, leasing rather than purchasing most of its properties. That choice supported rapid geographic growth but later left the retailer with a costly store base and fewer owned real-estate assets to cushion declining operating performance. Hastings initially outlasted major video-rental competitors such as Blockbuster Video and Hollywood Video because it diversified beyond rentals. As physical media sales weakened and digital distribution gained popularity, the company increased its emphasis on products less vulnerable to downloading, including toys, gifts, consumer electronics, musical instruments, hobby products, sporting goods, skateboards, disc-golf equipment, licensed merchandise, comics, and collectibles. In 2010, its relationship with Diamond Comic Distributors enabled it to expand direct-market comic-book sections across its stores. Hastings subsequently became one of the largest comic-book retailers in the United States during the early and middle 2010s. The company also experimented with adjacent formats. It opened Sun Adventure Sport locations in Texas in 2010 and launched Tradesmart in Littleton, Colorado, in 2011. Tradesmart focused on used electronics, media, and novelty goods. In 2013, Hastings redesigned stores to give greater prominence to higher-margin non-media categories while its traditional books, music, and video businesses contracted. After several years of losses, the board began seeking strategic alternatives in 2012. Draw Another Circle LLC, controlled by merchandising executive Joel Weinshanker, agreed in 2014 to acquire Hastings for $21.4 million, and the transaction closed that July. Draw Another Circle also acquired MovieStop later in 2014, adding a regional used-movie retail chain to its entertainment portfolio. The change in ownership did not reverse Hastings's deteriorating financial position. The business accumulated approximately $140 million in debt under Draw Another Circle's management. In December 2015, Jim Litwak became president and chief executive officer in an attempt to stabilize the company. Hastings nevertheless filed for bankruptcy protection in June 2016. Efforts to find investors, restructure the business, or preserve it as a franchise did not succeed. At a July 2016 auction, liquidation firms Hilco Merchant Resources and Gordon Brothers Retail Partners outbid parties that intended to continue operating at least some stores. The buyers chose to liquidate the chain, and all remaining Hastings locations closed by the end of October 2016. Calendar Holdings later acquired Hastings's intellectual property for $300,000. Some former locations were subsequently taken over by other entertainment and specialty retailers, including Vintage Stock and 2nd & Charles.

Hastings Entertainment originated in 1968 as West Texas News, a newsstand supplier. The operation later became part of Western Merchandisers, a wholesaler of books and recorded music. Western Merchandisers was acquired by Wal-Mart Stores in 1990 and then sold to Anderson Media Corporation in 1994, after which it operated as Anderson Merchandisers. The Hastings retail business developed into a distinct entertainment-store chain headquartered in Amarillo, Texas. During the 1990s, Hastings pursued substantial store expansion. The company leased its properties rather than buying them, a decision that helped it open stores quickly but left it with a large stream of occupancy obligations and relatively few owned real-estate assets. Its stores were concentrated in the South Central and Rocky Mountain regions, the Great Plains, and parts of the Midwest, often serving college-town markets. The typical superstore offered books, music, movies, video games, rentals, electronics, and related merchandise, with both new and used products contributing to the assortment. Hastings became a notable survivor of the decline of video rental. It continued operating after Blockbuster Video and Hollywood Video withdrew from the market, partly because it had a broader merchandise mix than a pure rental chain. The company nevertheless faced the same structural pressures affecting physical entertainment retail: digital music and video, online shopping, changing consumer behavior, and falling demand for some traditional media categories. The company responded by broadening its assortment. In 2010, Hastings established an account with Diamond Comic Distributors and expanded comic-book departments throughout its stores. This development helped make Hastings the largest comic-book retailer in the United States during the early-to-middle 2010s, according to the referenced account. Hastings also opened Sun Adventure Sport locations in Texas in 2010 and introduced the Tradesmart concept in Littleton, Colorado, in 2011. Tradesmart focused on used electronics, media, and novelty goods. By 2013, Hastings was redesigning its stores to emphasize toys, gifts, consumer electronics, musical instruments, disc-golf products, skateboards, hobbies, and licensed sports merchandise. These categories generally offered better margins and were less susceptible to direct replacement by downloadable content. The strategy gave the chain temporary support, but it did not solve the combined problems of declining legacy-media sales, high fixed occupancy costs, and accumulated operating losses. In 2000, Hastings restated earnings for the first three quarters of fiscal 1999. It also faced a securities class-action lawsuit alleging that the company had overstated profitability and used its common stock to support allegedly false reports of growth. Hastings settled the case for $5.75 million, according to the cited reference. After continued losses, Hastings's directors began seeking potential buyers in 2012. In April 2014, Draw Another Circle LLC, a merchandising company controlled by Joel Weinshanker, agreed to acquire the chain for $21.4 million. The purchase closed in July. John Marmaduke, the company's chief executive and son of founder Sam Marmaduke, retired as part of the transaction. Draw Another Circle expanded its entertainment holdings by acquiring MovieStop, a 44-store southeastern chain specializing in used movies and related products, in November 2014. The ownership change did not restore Hastings's financial health. Under Draw Another Circle's management, the business accumulated approximately $140 million in debt. In December 2015, Jim Litwak was appointed president and CEO to lead a turnaround. The effort failed to produce a sustainable recovery. Hastings filed for bankruptcy protection in June 2016 and received additional time to seek investors, restructure, or convert the business to a franchise model. No acceptable continuation plan emerged. Hastings was placed into an auction process in July 2016. Hilco Merchant Resources and Gordon Brothers Retail Partners jointly outbid parties that wanted to maintain at least part of the operating chain. Rather than preserve profitable stores, the winning liquidation firms proceeded with a company-wide wind-down. All remaining locations closed by the end of October 2016. Calendar Holdings acquired the Hastings intellectual property for $300,000. Some former stores were later occupied by Vintage Stock and 2nd & Charles, but the Hastings chain itself did not resume operations.

• 2016

  Bankruptcy and liquidation ended the chain

  [1]Hastings Entertainmenten.wikipedia.org

  Hastings filed for bankruptcy protection, was sold at auction to liquidation firms, and closed its final stores by the end of October.

• 2015

  Jim Litwak became CEO

  [1]Hastings Entertainmenten.wikipedia.org

  Jim Litwak was appointed president and CEO in December as part of an attempted turnaround.

• 2014

  Draw Another Circle completed its acquisition

  [1]Hastings Entertainmenten.wikipedia.org

  Draw Another Circle acquired Hastings for $21.4 million, with the transaction completed in July.

• 2014

  MovieStop joined the parent company's portfolio

  [1]Hastings Entertainmenten.wikipedia.org

  Draw Another Circle purchased the 44-store MovieStop chain in the southeastern United States.

• 2012

  The board began searching for buyers

  [1]Hastings Entertainmenten.wikipedia.org

  After years of losses, Hastings began exploring a sale or other strategic alternatives.

• 2011

  Tradesmart was introduced

  [1]Hastings Entertainmenten.wikipedia.org

  Hastings opened a Littleton, Colorado, format focused on used electronics, media, and novelty merchandise.

• 2010

  Hastings expanded comics and opened Sun Adventure Sport

  [1]Hastings Entertainmenten.wikipedia.org

  The chain entered a direct-market comic-book relationship with Diamond Comic Distributors and launched a sports-equipment retail concept in Texas.

• 2000

  Earnings were restated and a securities lawsuit was settled

  [1]Hastings Entertainmenten.wikipedia.org

  Hastings restated portions of fiscal 1999 earnings and settled a securities class-action case for $5.75 million.

• 1994

  Western Merchandisers was sold to Anderson Media

  [1]Hastings Entertainmenten.wikipedia.org

  Wal-Mart sold Western Merchandisers to Anderson Media Corporation, after which the operation became Anderson Merchandisers.

• 1990

  Western Merchandisers became a Wal-Mart subsidiary

  [1]Hastings Entertainmenten.wikipedia.org

  Western Merchandisers was acquired by Wal-Mart Stores, linking the company to a major national retail group before its later sale.

• 1968

  West Texas News was founded

  [1]Hastings Entertainmenten.wikipedia.org

  The business began as a newsstand provider in Texas, later becoming connected with the Western Merchandisers wholesale operation.

A regional, large-format entertainment retailer combining new and used media with rentals, books, comics, collectibles, electronics, toys, gifts, and hobby-oriented merchandise. In its later years, Hastings positioned itself around diversified, tactile, and higher-margin products that were less directly exposed to digital downloading.

• Entertainment retail

  Hastings superstores

  The core Hastings format was a large regional superstore combining books, music, movies, video games, rentals, electronics, toys, gifts, and used merchandise. Stores often served college towns and provided a broader assortment than conventional video-rental outlets. In the later years, the format increasingly featured collectibles, comics, hobby goods, musical instruments, sporting products, and licensed merchandise.

• Comics and specialty merchandise · 2010

  Comic books and collectibles

  Beginning in 2010, Hastings expanded comic-book departments through its Diamond Comic Distributors relationship. The chain broadened these sections across its stores and became a major direct-market comic retailer. Collectibles and related merchandise became increasingly important as sales of conventional books, music, and video declined.

• Home entertainment rental

  Video rental

  Hastings rented movies and other entertainment media from its stores. Video rental helped the company remain relevant after several specialist rental chains collapsed, although the model was eventually undermined by digital distribution and changing consumer habits.

• Used electronics and media retail · 2011

  Tradesmart

  Tradesmart was an adjacent retail concept launched in Littleton, Colorado, in 2011. It specialized in used electronics, used media, and novelty products, extending Hastings's resale and trade-in orientation beyond the traditional superstore assortment.

• Sporting-goods retail · 2010

  Sun Adventure Sport

  Sun Adventure Sport was a sports-equipment retail concept opened by Hastings in Amarillo in 2010 and later expanded to Lubbock. It represented the company's attempt to diversify into physical products outside its core entertainment categories.

• 2000

  Securities reporting lawsuit and settlement

  Hastings faced a securities class-action lawsuit alleging that it reported inflated profits and used common stock to sustain allegedly misleading claims about company growth and profitability. The company settled the case for $5.75 million.

  Source

Read more

• 2016

  Bankruptcy auction and liquidationOther

  Background

  Hastings entered bankruptcy protection after accumulating approximately $140 million in debt. The company was given additional time to find investors or restructure as a franchise.

  Action taken

  After no viable continuation plan emerged, Hilco Merchant Resources and Gordon Brothers Retail Partners won the July auction and pursued liquidation rather than preserving a smaller operating chain.

  Aftermath

  All remaining stores closed by the end of October 2016. Calendar Holdings acquired the intellectual property separately for $300,000.

  Accumulated debt. $140 million (By the 2016 bankruptcy filing)

  Source

• 2015

  Appointment of Jim Litwak as CEOOther

  Background

  Hastings was suffering under heavy losses and mounting debt after its change of ownership.

  Action taken

  Draw Another Circle appointed Jim Litwak president and CEO in December 2015 to pursue a turnaround.

  Aftermath

  The leadership change did not prevent bankruptcy protection or the subsequent liquidation of the chain in 2016.

  Source

• 2014

  Sale to Draw Another CircleM&A

  Background

  Hastings had experienced years of losses and its directors had been seeking a buyer since 2012.

  Action taken

  Draw Another Circle LLC agreed to acquire Hastings for $21.4 million; the purchase was completed in July 2014.

  Aftermath

  John Marmaduke retired, while the new ownership attempted to manage Hastings alongside other entertainment businesses, including MovieStop.

  Acquisition price. $21.4 million (2014 acquisition)

  Source

• 2014

  Acquisition of MovieStopM&A

  Background

  Draw Another Circle sought to build a broader entertainment-retail portfolio as physical media businesses faced structural pressure.

  Action taken

  The parent company acquired MovieStop, a 44-store southeastern regional chain focused mainly on used movies and related merchandise.

  Aftermath

  The acquisition expanded the group's footprint but did not provide a durable solution to Hastings's debt and operating losses.

  Source

• 2013

  Store redesign toward non-media categoriesStrategy

  Background

  Books, music, and video sales were weakening as consumers moved toward digital media.

  Action taken

  Hastings redesigned stores to give more space and attention to toys, gifts, electronics, musical instruments, disc golf, skateboards, hobbies, and licensed sports products.

  Aftermath

  The move emphasized higher-margin and less-downloadable products, but it did not reverse the company's long-term financial decline.

  Source

• 2010

  Expansion into direct-market comicsProduct launch

  Background

  Declining traditional media sales encouraged Hastings to seek differentiated products and new sources of store traffic.

  Action taken

  Hastings opened an account with Diamond Comic Distributors and expanded comic-book departments across its stores.

  Aftermath

  The chain became a leading comic-book retailer in the United States during the early-to-middle 2010s, although the broader diversification did not ultimately prevent bankruptcy.

  Source

• 1990

  Rapid expansion through leased propertiesStrategy

  Background

  During its mass expansion, Hastings leased its stores rather than purchasing most of the properties. The approach facilitated geographic growth but left the company with substantial occupancy commitments and limited owned real-estate value.

  Action taken

  The chain used leased locations as the principal foundation for its growing store network.

  Aftermath

  The lease-heavy structure later reduced the company's financial flexibility and contributed to the difficulty of restructuring the business.

  Source

1. 1Hastings Entertainmenten.wikipedia.org