The St. Paul-based chain, which has 586 company-owned stores and35 franchised stores in the U.S. and Canada, could have troublemeeting its extensive nationwide lease obligations.

Video Update's fourth quarter loss of $24.9 million came onsales of $48.9 million, down 18 percent from the previous fourthquarter sales - reflecting the fact it closed 69 stores whileadding just three new ones.

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