Blockbuster feels the heat from competition

Blockbuster, which is facing tough competition from Netflix and Coinstar's Redbox, plans to close up to 960 stores by the end of next year, Reuters reported.

According to Reuters, the company said in a regulatory filing on Tuesday that along with the conversion of certain stores to outlets and lease mitigation or termination efforts, total store closures would be in the range of 1,335 to 1,560.

The company expects a one-time net working capital benefit of $26 million from the store closures. Blockbuster had over 7,100 stores in the United States and its territories and 20 other countries as of July 5.

The company has struggled to reposition itself while fending off increasing competition from Redbox, which rents films for $1 per night at automated kiosks, and Netflix's mail-order service.