After getting a good look at Circuit City's books, Blockbuster withdrew its $1.35 billion bid to buy the electronics retailer.
"Based on market conditions and the completion of our due diligence process, we have determined that it is not in the best interest of Blockbuster shareholders to proceed with an acquisition of Circuit City," said Blockbuster CEO Jim Keyes, in a prepared statement.
Still, Keyes insists the company is not giving up its dream to sell both electronics devices as well as the content (selling the razors as well as the blades).
"We will pursue this strategy through our Blockbuster stores as a way to diversify the business and better serve the entertainment retail segment," he said in the statement.
No doubt Keyes knows his business better than we do, but we're not sure why he would want to expand the brick-and-mortar business. Over the last year, Blockbuster closed 412 stores (including Gamestation stores), presumably because they were operating at a loss or weren't terribly profitable. The overhead on brick-and-mortar retail is high, and as the economy tinkers with a recession, it seems like a risky bet. Plus, gas prices make it expensive for Americans to even leave their homes.
