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Blockbuster Entertainment Corp. has picked the Southeast to test dedicated videogame rental and sales stores (AA, Jan. 10).

The five test stores, slated to open in the second quarter, will be in Tampa and Orange Park, Fla.; Richmond and Virginia Beach, Va.; and an undisclosed fifth site, said Corporate Communications Manager Wally Knief.

The stores will be in malls, strip malls or free standing locations. "Later in the year, we'll decide which works best," Mr. Knief said.

He wouldn't discuss the company's growth plans for the new division, characterized in January by Chief Marketing Officer Jim Hilmer as "a big opportunity that we want to take advantage of."

Blockbuster hopes the division will eventually serve as a dominant third unit domestically, behind video and music retailing. In a precursor to the new division, the company in November launched a test of five CD-ROM marketers' hardware and software technologies in 57 of its San Francisco video rental stores.

Ad support for the test will use strong creative designed to target 6-to-20-year-old videogame enthusiasts, said Brian Woods, Blockbuster VP-national marketing. Starting a few weeks before the opening, the company will run teaser and grand opening ads on outdoor boards, radio and local cable, and in theaters, via D'Arcy Masius Benton & Bowles, St. Louis.

The company launched national advertising support, via former agency Bernstein-Rein, Kansas City, Mo., for video-game rentals at existing stores last June.

In an unrelated issue, Mr. Knief wouldn't comment on a suit filed March 7 by shareholders in Delaware Chancery Court to block Blockbuster's merger with Viacom. Shareholders are concerned that their stock would lose value through the merger.

"We're not discussing it," he said, adding that a date has not yet been set for a shareholders' vote on the proposed $8.4 billion merger.

Electronic Media reported top executives of Blockbuster, Viacom and Viacom's newly acquired Paramount Communications met last month behind closed doors to start hammering out the initial details of operational and management changes, and new-business ventures.

The publication reported Viacom and Blockbuster management decided, among other things, to immediately begin marketing Viacom and Paramount products in Blockbuster's 3,600-plus home video rental stores and 511 music stores in the U.S. and abroad.

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