← back to the directory
CC-012 Multimedia superstore · USA 2016

Hastings Entertainment — One superstore, four media, all of them going digital

ecommerceliquidated2010s
Lifespan
1968–2016 · 48 yrs
Peak Stores
~150 (mid-2000s)
Killed By
digital across every aisle
Status
Liquidated

Summary

Hastings Entertainment was the Texas multimedia superstore that sold books, music, movies, and video games under one roof, and on 13 June 2016 it filed for Chapter 11 bankruptcy in Delaware; by the end of October that year every store was closed and liquidated. Founded in Amarillo in 1968 as "Hastings Books & Records" — a retail experiment by the wholesaler Sam Marmaduke — it grew into a chain of roughly 120 to 150 superstores planted mostly in the small and medium-sized markets of Texas, Oklahoma, Arkansas, and the surrounding states, the kind of towns a Borders or a Barnes & Noble rarely bothered with. For those towns, Hastings was the bookstore, the record shop, the video store, the game store, and the Friday-night hangout, all in one building.

That all-in-one breadth was the original genius and the eventual curse. Hastings cross-merchandised media the way a supermarket cross-merchandises groceries: new and used books beside new and used CDs beside DVDs beside video games, with rentals, trade-ins, comics, toys, and coffee folded in. As long as physical media was how people consumed entertainment, the combination drew traffic that no single-category store in a small town could match. But it left Hastings exposed on every front at once. When books went to e-readers and Amazon, music to downloads and streaming, movies to streaming and discs to the kiosk, and games to digital downloads, Hastings was not disrupted in one aisle — it was disrupted in all of them simultaneously.

By the mid-2010s the numbers told the story plainly. Hastings lost about $10.9 million on revenue of roughly $420 million in fiscal 2014, and its losses widened to about $16.6 million on falling sales of around $401 million the next year. Its parent, Draw Another Circle, filed Chapter 11 in June 2016 owing tens of millions to its film and music suppliers, and when a going-concern buyer failed to materialise, the liquidators Gordon Brothers and Hilco — the same firms that had wound down Borders in 2011 — bought the company at auction to close it down.

Hastings is the cleanest illustration in this file of a specific vulnerability: a retailer whose categories all faced the same disruptive technology on roughly the same timeline. A bookstore could at least claim that music and movies were someone else's problem. Hastings sold all of it, and the internet came for all of it.

Timeline

1968
Books and records, together
Sam Marmaduke opens the first Hastings Books & Records in Amarillo as a retail test outlet for his wholesale business, cross-merchandising books and music under one roof.
1972
Incorporated
The retail operation is incorporated as Hastings Entertainment, focusing on small and medium-sized markets that big chains overlooked.
1985
Video joins the mix
Hastings adds video rentals to its books and music, broadening the multimedia format that would define it.
1990s
The superstore era
Hastings expands across Texas, Oklahoma, Arkansas, and neighbouring states, adding video games, comics, and used media — buying and reselling — to the format.
1998
Public company
Hastings Entertainment lists publicly, financing further expansion of its multimedia superstore footprint.
Mid-2000s
The peak
The chain operates on the order of 120 to 150 stores, becoming a dominant media retailer in its smaller markets and, by the 2010s, a leading US comic-book seller.
Late 2000s–2010s
Every category goes digital
E-books, music downloads and streaming, video streaming, and digital game distribution erode all of Hastings' core aisles at once; sales and margins slide.
FY2014–FY2015
Mounting losses
Hastings loses about $10.9 million on ~$420 million in revenue, then about $16.6 million on ~$401 million as sales fall.
13 June 2016
Chapter 11
Parent company Draw Another Circle files for bankruptcy in Delaware, owing tens of millions to film and music suppliers, and seeks a buyer.
July 2016
Liquidators win
With no going-concern buyer, Gordon Brothers and Hilco — Borders' 2011 liquidators — purchase Hastings at auction to wind it down.
31 October 2016
All stores closed
The roughly 123 remaining Hastings superstores complete their going-out-of-business sales and shut for good.

The Store That Sold Everything

Hastings began as a clever piece of wholesale strategy. Sam Marmaduke ran a media distribution business in West Texas, and in 1968 he opened a retail store in Amarillo partly to test what actually sold — Hastings Books & Records, books and music together under one roof, a cross-merchandising idea that was unusual at the time. It worked, and Hastings grew not by storming the big cities but by planting superstores in the towns the national chains ignored: small and mid-sized markets across Texas, Oklahoma, Arkansas, and Kansas where a single large media store faced little competition and met real local demand.

Over the decades the format kept absorbing categories. Video rentals were added in 1985; video games, comics, toys, used books and CDs, trade-ins, coffee, and in-store events followed. By the 2000s a Hastings superstore was a genuine destination — the place a small-town teenager could sell back a used game, browse the new-release wall, flip through comics, and buy a paperback, all in one trip. For its markets, the breadth was the point: no single-category store could justify the same shelf space in a town of that size, so Hastings became the default for every kind of media at once. At its height the chain ran on the order of 120 to 150 stores and was, for a stretch in the 2010s, among the largest comic-book retailers in the country.

Disrupted in Every Aisle at Once

The breadth that built Hastings is exactly what made its decline so total. Most of the dead retailers in this archive were undone by a single technological shift hitting a single category: streaming took video, downloads took music, e-books and Amazon took print. Hastings sold all of those categories, which meant it absorbed all of those shifts on roughly the same timeline. Books migrated to Kindle and Amazon; recorded music went to iTunes downloads and then to streaming; movies followed films to streaming and discs to the Redbox kiosk; and video games — long a reliable traffic and trade-in driver — moved to digital downloads and online stores that needed no shelf. There was no aisle for Hastings to retreat into, because the internet was emptying every aisle at once.

The financials registered the squeeze with little ambiguity. In fiscal 2014 the company lost about $10.9 million on revenue of roughly $420 million; the following year the loss widened to about $16.6 million as sales slipped to around $401 million. Hastings tried the usual adaptations — leaning harder into used media, trade-ins, comics, collectibles, and the "experience" of the store — and those categories held up better than new CDs and DVDs, but they could not offset the collapse of the core. A regional superstore in a town of modest size has thin pricing power against Amazon and no streaming product of its own to sell; it has rent, payroll, and inventory in a format the market is abandoning. The math only ran one direction.

Draw Another Circle, Then None

By 2016 the parent company, the privately held Draw Another Circle, had run out of runway. On 13 June it filed for Chapter 11 in Delaware, owing millions to its film and music suppliers — Universal, Fox, Sony Pictures — and arranging interim financing to keep the roughly 123 stores open while it looked for a buyer to take the business as a going concern. None came. At the July auction the winning bidders were the liquidation specialists Gordon Brothers and Hilco — the very firms that had presided over the death of Borders in 2011 — and they bought Hastings not to run it but to close it.

The going-out-of-business sales ran through the autumn, and by 31 October 2016 every Hastings store was dark. The end was quiet by retail-collapse standards: a regional chain, privately held, concentrated in smaller markets the national media rarely covered, liquidated cleanly with no zombie website and no revival. For the towns it served, the loss was concentrated and real — Hastings had often been the only bookstore, the only record shop, and the only game store for miles, and a community lost all of them in a single closing.

The Five Factors

01
Diversification across categories is no defence when the categories share a disruptor
Hastings spread across books, music, video, and games, which looked like resilience — and was the opposite, because all four faced the same shift to digital distribution on roughly the same timeline. Diversification protects only when the risks are uncorrelated; here every aisle was exposed to the same internet.
02
A small-market superstore has no pricing power against the internet
Hastings' edge was being the only large media store in towns the big chains skipped — an edge that meant nothing once Amazon and streaming services reached those same towns at the same prices as everywhere else. Geographic insulation dissolves when the competitor ships to every address.
03
Used media and "experience" can slow the bleed but not stop it
Trade-ins, used books and CDs, comics, and in-store events held up better than new physical media, and Hastings leaned into them. But a higher-margin sideline cannot carry the fixed costs of a fleet of superstores when the high-volume core — new books, music, and movies — falls away beneath it.
04
When the core shrinks, supplier debt becomes the trigger
Hastings entered bankruptcy owing tens of millions to the studios and labels whose product filled its shelves. A media retailer runs on supplier credit; once sales fall far enough that the bills cannot be paid, the suppliers' exposure, not the customer count, sets the timing of the collapse.
05
No going-concern buyer means the liquidators win the auction
Hastings filed hoping to sell itself intact and reorganise; with no buyer willing to operate a chain of declining media superstores, the only bidders were firms that profit by closing stores and selling the inventory. A business no one will run as a business is sold to be dismantled.

Aftermath

Hastings' liquidation in late 2016 closed roughly 123 stores and ended a 48-year run, eliminating the jobs of thousands of mostly part-time and hourly retail workers across the small and mid-sized markets the chain had specialised in. There was no online afterlife of note and no revival: unlike the brands that limp on as licensed websites, Hastings simply ended, its inventory sold off and its buildings handed back. For many of its towns the closure removed the only general-media store within a long drive — a quiet kind of community loss that rarely makes national news but lands hard locally.

The lasting significance of Hastings is diagnostic rather than dramatic. It is the textbook case of correlated category risk in retail: a company that did everything a media superstore could do, in markets that suited it, and still failed because it had bet its entire floor plan on physical media at the precise moment that books, music, movies, and games all went digital together. Where Blockbuster's lesson is about disruption in one category, Hastings' lesson is about disruption in all of them at once — and about how a format that once looked diversified can turn out to have been a single, undiversified bet on the disc, the cartridge, and the printed page.

Lessons

  1. Audit whether your categories share a disruptor before counting them as diversification: a multi-category retailer whose every aisle faces the same technology is making one concentrated bet wearing the costume of a hedged one.
  2. Geographic insulation in small markets is temporary; assume the online competitor reaches your towns at the same price as everyone else's, and do not build a model that depends on being unreachable.
  3. Treat higher-margin sidelines (used goods, trade-ins, events) as supplements, not saviours — they can slow a decline but cannot carry a fleet of large stores once the high-volume core collapses.
  4. Watch supplier credit as a leading indicator: for a media retailer, the unpayable invoice to the studios and labels, not the empty parking lot, is what actually triggers the filing.
  5. File while you still have a business worth operating, not just assets worth selling; once the only bidders are liquidators, the outcome is decided.

References