MOVIE GALLERY ANNOUNCES AGREEMENT TO PURSUE LEASE RESTRUCTURING
OPPORTUNITIES AT 1,100 STORE LOCATIONS

DOTHAN, Ala., April 19, 2006 -- Movie Gallery, Inc. (NASDAQ:
MOVI) today announced that it has entered into a management
agreement with Hilco Real Estate, LLC ("Hilco").  Under the
agreement, the terms of which were not disclosed, Movie Gallery
and Hilco will initiate a program to restructure leases at more
than 1,100 existing Movie Gallery and Hollywood Video stores.
While the list of stores will not be published, this program does
not include stores that are associated with the company's
previously announced subleasing and downsizing program.

"We are pleased to work with the qualified professionals at
Hilco," said Keith A. Cousins, Movie Gallery's Executive Vice
President and Chief Development Officer.  "Hilco has a well
established reputation for analyzing portfolios and successfully
negotiating on behalf of clients to better position real estate
assets and manage occupancy costs.  This program, together with
our previously announced subleasing program, represents our on-
going initiative to restructure approximately seventy percent of
the Company's real estate portfolio.  We anticipate that these
efforts will significantly improve our operating results and
enhance shareholder value."

Mitchell P. Kahn, President of Hilco Real Estate, said,
"Portfolio analysis and lease restructuring are highly-
specialized disciplines and core competencies of Hilco Real
Estate.  I am confident that our professional staff can improve
Movie Gallery's leverage and cash flow by analyzing and
restructuring real estate commitments and unlocking unrealized
value."

About Movie Gallery
Movie Gallery is the second largest North American video rental
company with approximately 4,800 stores located in all 50 U.S.
states, Canada and Mexico.  Since the Company's initial public
offering in August 1994, Movie Gallery has grown from 97 stores
to its present size through acquisitions and new store openings.
For more information about the Company please visit our website
at:  www.moviegallery.com

About Hilco Real Estate, LLC
Hilco Real Estate, LLC (www.hilcorealestate.com), is based in
Northbrook, Illinois.  The company provides high-yield strategic
retail real estate optimization solutions through timely,
creative deal structures, dispositions, terminations, re-
negotiations and other management services.  Over the years,
Hilco principals have disposed of and acquired assets valued in
excess of $35 billion.  Hilco Real Estate is part of the Hilco
Organization, a provider of asset valuation, acquisition,
disposition and financing services to an international
marketplace through a platform of specialized business units,
nearly 500 employees and 200 qualified field consultants.

Forward-Looking Statements
To take advantage of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, you are hereby
cautioned that this release contains forward-looking statements,
including descriptions of the benefits associated with the
management agreement with Hilco Real Estate, LLC and the
Company's previously announced real estate subleasing program,
that are based upon the Company's current intent, estimates,
expectations and projections and involve a number of risks and
uncertainties.  Various factors exist which may cause results to
differ from these expectations.  These risks and uncertainties
include, but are not limited to, the risk factors that are
discussed from time to time in the Company's SEC reports,
including, but not limited to, the annual report on Form 10-K for
the fiscal year ended January 1, 2006.  In addition to the
potential effect of these ongoing factors, the Company's
operations and financial performance may be adversely effected
if, among other factors; (i) same-store revenues are less than
projected; (ii) the Company is unable to comply with the revised
financial covenants contained in its senior credit facility;
(iii) the Hilco Real Estate, LLC management agreement, the
Company's previously announced real estate subleasing program and
other initiatives fail to generate anticipated cost reductions;
(iv) the availability of new movie releases priced for sale
negatively impacts the consumers' desire to rent movies; (v)
unforeseen issues with the continued integration of the Hollywood
Entertainment business; (vi) the Company's actual expenses or
liquidity requirements differ from estimates and expectations;
(vii) consumer demand for movies and games is less than expected;
(viii) the availability of movies and games is less than
expected; or (ix) competitive pressures are greater than
anticipated.  The Company undertakes no obligation to update any
forward-looking statements, whether as a result of new
information, future events, or otherwise.

Contacts
Financial: Thomas D. Johnson, Jr., Movie Gallery, Inc., +1-503-
570-1950
Media: Andrew B. Siegel of Joele Frank, Wilkinson Brimmer
Katcher, +1-212-355-4449 ext. 127
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