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DOTHAN, AL-Movie Gallery is closing 520 of its underperforming and unprofitable namesake and Hollywood Video stores, leaving it with about 4,000 units across the country. The closures are coming after the chain has faced financial trouble due to a tough movie-rental market.

Movie Gallery has retained the Los Angeles-based Great American Group to assist with the liquidation. That firm has worked in the past with Eddie Bauer, Kmart, OfficeMax ands other retailers in assisting with dispositions.

Last month the retailer was notified by Nasdaq that it is not in compliance with filing requirements because for 30 days its stock had traded at under $1 and it had not maintained a minimum market value of $15 million. From Aug. 17 it had 180 days to comply with the first infraction and 90 days to increase its value.

In its second quarter, reported Aug. 10, same-store sales fell 4.7% year over year, while total revenue fell 6.7%, to $561 million. The company posted a net loss of nearly $310 million, due to the liability of loans in relation to its acquisition of Hollywood Entertainment in 2005.

In March, Movie Gallery’s management said it was pursuing video-on-demand initiatives and had hired Merrill Lynch & Co., and turnaround specialists Alvarez & Marsal to help asses it real estate strategy.

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