Redbox is expanding its presence in the northeast, southeast and midwest through a new agreement with a collection of convenience stars, the company announced on Thursday.
The shiny red rental kiosks soon will be housed in EZ Mart Stores, Fastrac Markets, Murphy Express and VPS Convenience Store Group (Worsley Companies).
Redbox currently has 24,000 locations, and already has pacts with convenience stores 7-Eleven, Circle K, Pantry, ExxonMobil, Kum & Go and Stripes, among others.It did not say how many locations the new agreements would add, although analysts said that it could be as many as 1,700 kiosks.
“The convenience-store channel has played an important role in Redbox’s success and presents a great opportunity for future growth,” Mitch Lowe, president of the company said in a statement.
Redbox has been a key beneficiary of the collapse of Movie Gallery and Blockbuster’s impending bankruptcy, as more and more home video watchers have opted for its lower prices and convenience.
Still its rapid expansion and its release window agreements with studios did appear to have a negative impact on the company’s profits during the most recent quarter. Adding locations has saddled the company with over $400 million in debt obligations.
Though quarterly revenues grew 3.3 percent, operating profit for Redbox declined 12.1 percent from the first quarter of 2010, a drop the company said was largely attributable to a delay in when they can offer new releases.