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RETAILER NEWS

Movie Gallery received a temporary reprieve from its credit problems. The chain signed a forbearance agreement with its senior lenders in July giving it until Aug. 14 before lenders could take action on Movie Gallery’s loan default. The 4,580-store chain missed a loan payment in July after posting a $15 million first quarter loss. Joe Malugen, Movie Gallery ceo, said the chain is exploring the sale of assets or accelerating its store closings.

Online DVD renter Netflix reported its first-ever quarterly loss of subscribers and plans to lower prices to battle Blockbuster Online for market share. The company finished its second quarter on June 30 with 6.74 million subscribers, 55,000 less than it started with. Netflix announced on July 23 that it would cut $1 from the monthly fee for its two most popular rental plans. The company also lowered its full-year earnings forecast from $52 million to $42 million.

VENDOR NEWS

SanDisk reported a 15% increase in second-quarter revenue of $827 million. Net income for the company specializing in flash-based storage was $28 million and the average capacity of its flash-memory cards was 1,475 MB, a 95% increase from the same quarter in 2006.