KPS Video Express
| Logo of KPS Video Express | |
| Company type | Defunct |
|---|---|
| Industry | Rental and Sales |
| Founded | 1981–1998 |
| Founder | Garrie and Kitty Roman |
| Headquarters | Hong Kong |
Key people | Garrie and Kitty Roman |
| Products | VHS video, DVD, LaserDisc, Video CD, Audio CD, audio cassettes and Software Rental and Sales |
| US$100 million (HK$774 million) in 1996 | |
Number of employees | ~1,000 in 1997 |
| Website | Formerly http://www.kps.com.hk |
KPS Video Express (金獅影視超特店) was a multimedia retail and rental chain based in Hong Kong, specializing in videos, CDs, and films. Founded in 1981 by Garrie and Kitty Roman, the company had grown to operate 39 outlets with a membership exceeding 450,000 by 1997. It also established a presence in Taiwan and aimed to broaden its footprint across Asia.
The firm encountered financial difficulties during the Asian Economic Crisis, leading to receivership in 1998. Subsequently, it was acquired by the American video rental giant Blockbuster.
History
The origins of KPS Video Express trace back to 1981 when it began as a small kiosk situated behind an electronics store on Nathan Road. Founders Garrie and Kitty Roman curated a collection of Western and Chinese VHS films available for rental at HK$15 per tape.[1]
Following initial success, Kam Production Studios—named after K. K. Leung, chairman of Kam Kui International Holdings—invested in the business in 1982. This partnership transformed the enterprise into KPS Video Network, launching with seven kiosks. The company underwent rebranding to become KPS Retail Stores Ltd in 1987.
By 1992, KPS expanded its product range to include LaserDiscs for both sale and rental alongside VHS tapes. It also diversified into computer software, audio CDs, and CD-ROM drives. To test this comprehensive retail approach, an 8,000 square feet (740 m2) pilot store opened in Causeway Bay that year. The concept proved effective, prompting the opening of a large-scale superstore in 1994 at Chong Hing Square on 601 Nathan Road, Mongkok, spanning 155,000 square feet (14,400 m2). This flagship location stocked approximately 73,000 CDs and offered rentals for around 17,000 titles. Its inventory included over 12,500 laser discs for sale or rent; additionally, it carried 6,000 VHS tapes for purchase and an extensive rental selection of 37,000 titles.Cite error: The opening <ref> tag is malformed or has a bad name
In the same year, KPS implemented advanced security measures such as camera surveillance and magnetic theft-detection systems within its megastores.Cite error: The opening <ref> tag is malformed or has a bad name The company also adopted a computerized procurement system that enhanced demand forecasting accuracy and enabled real-time monitoring of inventory levels and market trends.Cite error: The opening <ref> tag is malformed or has a bad name
By 1995, media reports highlighted KPS's ambitions to extend operations beyond Hong Kong into other Asian markets.Cite error: The opening <ref> tag is malformed or has a bad name At that time, the company commanded roughly 35% of Hong Kong’s video rental sector with a customer base of about 250,000 members and annual revenues reaching HK$36 million. Partnering with ChinaVest—a U.S.-based direct investment firm—KPS secured an infusion of US$26 million to support expansion into Taiwan.[2] The initial strategy involved opening 100 outlets across Taiwan within three years. These megastores ranged from 360 to 1,350 square meters and featured videos on tape and laserdiscs for sale or rent alongside music products and computer software. Additional plans targeted South Korea with a goal of establishing 500 stores; Singapore with 12 outlets; Malaysia with 55 stores; as well as future developments in Thailand.
In 1996, KPS achieved a revenue milestone of US$100 million (equivalent to HK$774 million) and received the DHL/South China Morning Post Enterprise Award that year.[2] That same year saw Garrie Roman divest his ownership stake,Cite error: The opening <ref> tag is malformed or has a bad name although he retained a board position and continued operational involvement.
By 1997, KPS operated 39 locations within Hong Kong along with five megastores throughout Taiwan. Expansion plans aimed to grow the Hong Kong network to 100 stores within two years and increase Taiwanese outlets to 30 by the end of that year. The membership base had risen to approximately 450,000 customers locally while staffing levels reached around 1,000 employees. Long-range objectives included scaling up to over 1,050 stores across the region by 2005.[2]
Decline and collapse
By 1997, the company was facing increasing financial difficulties caused by multiple issues. One significant factor was the widespread unauthorized duplication of CDs on a commercial level, which led to legitimate retailers losing approximately 900 million Hong Kong Dollars to counterfeiters in 1998. Additionally, the Asian Economic Crisis played a crucial role by reducing consumer spending. By the end of 1997, KPS reported losses estimated at 12 million Hong Kong dollars.
The introduction of the Copyright Ordinance on 1 July 1997 prohibited parallel imports of films intended for foreign markets, resulting in a 30 percent reduction in available products.
Simultaneously, KPS's aggressive yet poorly planned expansion strategy strained its financial resources. New outlets were launched without sufficient evaluation of their locations or viability, often situated within close proximity to each other. The funding for this rapid growth came largely from the sale of pre-paid coupons, with members receiving special promotions to purchase coupon bundles redeemable for video rentals.
In May 1998, rumors circulated online suggesting that KPS was nearing bankruptcy, sparking panic among customers who rushed to rent videos. This loss of confidence caused coupon sales to plummet. The collapse of Maria Bakery, which failed to honor its pre-paid coupon obligations, further eroded trust in the coupon system.
On 23 June 1998, KPS introduced a Coupon Burn initiative, allowing customers until 1 August 1998 to redeem coupons for rentals or convert them into purchases. Under this scheme, two coupons could be exchanged for HK$25 on purchases exceeding HK$100. However, the top 150 rental titles were excluded from this offer. Alternatively, customers could use five coupons to acquire a used tape or ten coupons for a second-hand LaserDisc. Additionally, customers received a blank videotape after every 18 coupon rentals and were granted a grace period of up to four months if they held large coupon balances. Following this campaign, KPS transitioned to a cash-only rental system with prices ranging from HK$20 to HK$25 per rental; members were entitled to a 20% discount off these rates. Despite the discount, this pricing remained higher than the average cost under the coupon system.
The alteration in coupon terms led to complaints filed with the Consumer Council, and several consumers pursued refunds for unused coupons through the Small Claims Tribunal. Although KPS attempted to resolve disputes out of court by extending coupon validity periods, these offers were rejected by claimants. On 23 October 1998, four claimants won their lawsuit against KPS, forcing the company to reimburse coupons and potentially opening the door for numerous additional claims. KPS attributed this legal ruling as decisive in sealing its downfall when negotiations with a major corporation regarding a takeover collapsed amidst ongoing turmoil. The Consumer Council supported consumer actions and employed the Consumer Legal Action Fund to assist claimants seeking compensation. In total, approximately 2,400 complaints amounting to HKD$1.5 million were registered.
In November 1998, following his controversial decision in June of that year to dismiss Chief Executive Officer Rodney Miles, KPS founder Garrie Roman was removed by the board. That same month, KPS entered receivership due to court orders requiring repayment of coupons to claimants.
Post-collapse
Even before KPS officially folded, management withheld information from staff, leaving them dependent on media reports and speculation. Amid this uncertainty, numerous employees began searching for alternative employment. When the company entered receivership, a total of 430 positions were eliminated. The Legal Aid department approached the High Court to initiate the winding-up process of KPS, enabling former workers displaced by the closure to claim ex-gratia payments through the Labour Department’s Protection of Wages on Insolvency Fund. Although these payments were scheduled for disbursement on 28 January 1999, procedural complications delayed the formal liquidation of KPS.
Following the company's downfall, criminal syndicates exploited the market gap by distributing unlicensed video CDs worth millions of dollars.
Takeover by Blockbuster
The American video rental giant Blockbuster identified a strategic opportunity to establish itself in Hong Kong and commenced negotiations with KPS’s receivers, Ernst and Young, to acquire its assets. By 16 February 1999, Blockbuster had reopened 15 of the 38 former KPS outlets and rehired 145 ex-KPS employees. Former KPS members were offered exclusive promotions to transition to Blockbuster’s services; however, the prior video pre-paid coupon scheme was discontinued.
Blockbuster eventually exited the Hong Kong market in 2004 due to substantial operational expenses and significant losses caused by rampant copyright infringement.
Charity work
KPS maintained an active role in philanthropic initiatives, contributing funds to various causes such as Operation Santa Claus. In 1993, it stood as the event’s largest sponsor, raising HKD 430,000.
In 1995, KPS backed the KPS Video Challenge for Operation Santa Claus, featuring two celebrity teams tested on their film knowledge by Hong Kong Today host Hugh Chiverton at the former Furama Hotel. The event supported charities including Sowers Action and Youth Outreach. The company also promoted individual contributions by awarding 99 video rental coupons to the top donor in each store and 999 coupons to the highest donor across Hong Kong. Additionally, KPS sold videos donated by suppliers and directed all proceeds to Operation Santa Claus. That Christmas Day, the chain raised over HKD 472,000 by offering rentals at HKD 8 per tape instead of the usual HKD 24. Donations collected from store boxes amounted to HKD 14,220, while KPS contributed an extra HKD 14,000, bringing the total fundraising to half a million Hong Kong dollars.
Legacy
KPS stood out as the sole dominant video rental chain in Hong Kong to capture the majority market share. Currently, no other video rental outlet has approached the scale of KPS's presence, and due to financial setbacks linked to copyright infringements, efforts to establish a multimedia store of comparable size have yet to materialize.