Music, books retailer files Chapter 11

Draw Another Circle, the parent company of Texas-based HastingsEntertainment, has filed for Chapter 11 bankruptcy protection, with hopes of finding a buyer for its Hastings superstores.



In court filings in Delaware, Hastings CFO Duane A. Huesers cited both the “tremendous growth” of online retailers and the “decline in the market for physical media properties like music, movies, books, games and media rentals” for the chain’s troubles. The company operates 123 stores in 19 states, according to court filings.



Hastings’ sister brands, MovieStop and SP Images, were included in the bankruptcy filing. With MovieStop already in liquidation, Hastings asked court permission to continue closing 40 MovieStop locations under an arrangement it has with Gordon Brothers Retail Partners and to auction the remainder of its assets.



"In the past six months, Hastings has made significant progress in transforming our stores into entertainment destinations with exciting new categories that appeal to every member of the family and also extend to our e-commerce business,” stated Hastings president and chief operating officer Jim Litwak. "We are hopeful that we are on the right path but need an additional cash infusion to complete our remerchandising strategy.



Litwak said the Chapter 11 process will help the chain prepare for the intended sale while also providing additional protections and financing to allow it to contain ongoing operations.



Hastings posted a loss $10.9 million and revenue of $420 million in 2014. In 2015, losses rose to $16.6 million and revenue decreased to $401 million.



Hastings was founded in 1968. In July 2014, t was acquired by Draw Another Circle LLC.