Dothan, Ala. - Movie Gallery, the nation's second-largest video rental chain behind Blockbuster, on Tuesday announced plans to close an additional 400 underperforming and unprofitable Movie Gallery and Hollywood Video stores.

The struggling company, which filed for bankruptcy in October, announced plans to close 520 stores in September.

Movie Gallery has asked the court handling its Ch. 11 proceedings for permission to pay incentives to employees to help facilitate the store closings.

The company said the additional store closings were made "due to continued weakness in the company's industry, to conserve cash and reduce the company's overall cost structure."

"The decision to close stores is always difficult, but we are confident that we are taking the right steps to emerge from bankruptcy as a stronger company, better positioned for long-term success," said Movie Gallery president and CEO Joe Malugen.

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