BLOCKBUSTER MAKING RETAIL MOVE VIDEO RENTER EYES SALES MARKET.

Byline: Greg Hernandez Staff Writer

SHERMAN OAKS - Customers walking into the Blockbuster store on Van Nuys Boulevard are greeted these days by a large, red 20-foot-long banner hanging from the ceiling proclaiming ``Movies To Buy.''

Yes, buy.

With the DVD format booming, the nation's largest video rental chain is positioning itself to be a bigger player in sales this holiday season by revamping stores from Burbank to Woodland Hills - and at more than 4,400 other company-operated stores - to have separate, beefed-up retail sections with a clear emphasis on DVD movies and games.

``For the past five years, we've focused on being the leader in the rental category, which is a $9 billion industry,'' said Liz Greene, a spokeswoman for Dallas-based Blockbuster Inc. ``We have a new mission which could have a bigger payoff and that is to enter the $30 billion retail movie and game market.''

As a result, Blockbuster stores have been reorganized into color-coded sections: blue is for rentals, red is for retail and orange is for games. In 1,000 of the stores, there is also a purple section devoted to Spanish- language product as the chain seeks to reach out to what it says is one of its fastest-growing customer demographics.

In an effort to garner more retail business, Blockbuster is offering a price match guarantee which enables a customer who finds a new DVD or VHS title advertised for a lower price at a local retailer to bring in an original copy of the advertisement and have Blockbuster match the price.

Additionally, customers who rent selected DVD titles have the opportunity to later buy a previously-viewed DVD of the same movie when it is available for sale.

The chain also began a limited-time program which began Tuesday and runs through Dec. 16, giving members who buy a new DVD or VHS movie a free full-week movie rental. The free rental must be redeemed within seven days of the movie purchase.

``There was a perception that Blockbuster was too expensive and did not have enough selection,'' Greene said. ``People didn't think to buy from us. They'd rent from us and go somewhere else to buy.''

Blockbuster has dramatically expanded its inventory of games, organizing such brands as PlayStation2 and Xbox into their own sections complete with rental, retail and previously-played products grouped together.

``Our research told us that gamers are very unique and very specific about what they want,'' Greene said.

For a store to have a Spanish-language section, the area surrounding it must be at least 15 percent Spanish-speaking based on U.S. census numbers.

The Spanish sections take up an average of 25-30 percent of a store's floor space and usually at least one Spanish-speaking employee is on duty per shift.

Spanish-speaking customers interviewed this week were enthusiastic about the expanded selection. At the Sherman Oaks Blockbuster store, 34-year-old Alfredo Cachi stopped by after work looking for some action movies. He snatched up previously viewed VHS copies of the military dramas ``We Were Soldiers'' and ``Black Hawk Down'' which the store was selling for a bargain $4.99.

``I come to this Blockbuster because it has more of the Spanish movies,'' said Cachi, a resident of Sherman Oaks.

Nearby, 17-year-old Vivian Taracena of Van Nuys picked up a brand-new DVD of ``Spider-Man'' she planned to buy.

``We're buying a lot more DVDs now because they're cheaper,'' Taracena said before checking out the display of Spanish titles for her older brothers.

The shelves of Spanish titles include comedy, action-adventure, drama and family titles such as ``Los Angeles de Charlie'' (``Charlie's Angels''), ``Todos Los Caballos Bonitos'' (``All The Pretty Horses'') and ``La Revancha De Max'' (``Max Keeble's Big Move'')

The stores with expanded Spanish-language sections have stocked their shelves with VHS versions because most DVDs have a Spanish-language option already built in.

Some studios offer the films dubbed in Spanish complete with Spanish- language labeling while other movies simply have subtitles. In addition, the selections also include an array of Spanish-language films.

Along with the store's cosmetic and inventory changes, there are also signs in Spanish stressing to customers that Blockbuster membership is free and that a credit card is not needed to register. Applications are also available in English and in Spanish.

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2 photos

Photo:

(1 -- color) Blockbuster is revamping its stores to have separate, beefed-up retail sections with a clear emphasis on DVD movies and games.

(2 -- color) In 1,000 Blockbuster stores, there is a special section devoted to Spanish-language product as the chain seeks to reach out to what it says is one of its fastest-growing customer demographics.

John Lazar/Staff Photographer