These stores used to be great, but they have gone down the crapper and now this:
http://www.turnto10.com/money/9715823/detail.html
Tower Records Files For Bankruptcy Again
Chain Operates 89 Stores
UPDATED: 10:02 am EDT August 22, 2006
WASHINGTON -- Tower Records has filed for Chapter 11 bankruptcy protection from its creditors, its second such filing in less than three years.
The company, which operates 89 stores in 20 states, sought bankruptcy protection Sunday to sell its assets through a court-supervised auction.
The Sacramento, Calif.-based company, formally known as MTS Inc., asked the U.S. Bankruptcy Court in Wilmington, Del., to approve the rules governing an auction now slated for Oct. 5. Tower said it needs to close the sale by mid-October so it has time to prepare for the holiday shopping season, when it records about 32 percent of its annual sales.
Tower, which is slated to go before the bankruptcy court for the first time Tuesday morning, said its revenue fell to $430 million for the fiscal year ended July 31 from $476.1 million a year earlier.
The company admits "intense" competition has hurt its business and that of other music retailers.
"The brick-and-mortar specialty music retail industry has suffered substantial deterioration recently," Tower said in court papers.
Industry observers say the chain could have a tough time finding a buyer willing to keep its brick-and-mortar stores operating in an industry increasingly dominated by online music purveyors and big-box retailers.
Phil Leigh, a senior analyst for Inside Digital Media Inc., said the Tower brand has value and will find a buyer, but its stores aren't likely to survive this latest bankruptcy.
"I think they'll sell off the name and liquidate the inventory," Leigh said.
Leigh and others who monitor the sector say traditional music retailers are fading away as online music sales explode and big-box players like Wal-Mart Stores Inc., Target Corp., Best Buy Co. and Circuit City Stores Inc. offer one-stop shopping for busy consumers.
Tower Records, however, said it's seen "substantial interest among potential buyers" and hopes to find a buyer willing to continue operating its stores. The company said it's actively negotiating with one potential buyer and received another offer on the eve of its bankruptcy filing.
It's "absolutely our intention to keep the Tower brand alive," spokeswoman Lisa Amore said.
In a statement Sunday, Chief Executive Joseph D'Amico said potential buyers recognize the "strength of the brand and its unique position within the marketplace."
Tower emerged from a quick Chapter 11 case in 2004 under the ownership of its bondholders and a trust created by founder Russell Solomon. Rival Musicland Holding Corp. filed for Chapter 11 protection in January and sold its assets, including the Sam Goody chain, to Trans World Entertainment Corp., a rumored Tower suitor.
"It's kind of shocking how many pure-play music retailers have closed down in the time that we've been tracking the market," said Russ Crupnick, a music and movies industry analyst for the NPD Group.
Legal music download retailers like Apple Computer Inc.'s iTunes have played a major role in displacing traditional retailers. Nielsen SoundScan data, cited by Tower in bankruptcy-court filings, said legal digital downloads grew 200 percent in 2005 while album sales fell 7.8 percent.
Data compiled by NPD Group ranked Tower as the No. 9 seller of physical music, including CDs, in 2002. In the first six months of 2006, it was tied for 12th, Crupnick said.
http://www.turnto10.com/money/9715823/detail.html
Tower Records Files For Bankruptcy Again
Chain Operates 89 Stores
UPDATED: 10:02 am EDT August 22, 2006
WASHINGTON -- Tower Records has filed for Chapter 11 bankruptcy protection from its creditors, its second such filing in less than three years.
The company, which operates 89 stores in 20 states, sought bankruptcy protection Sunday to sell its assets through a court-supervised auction.
The Sacramento, Calif.-based company, formally known as MTS Inc., asked the U.S. Bankruptcy Court in Wilmington, Del., to approve the rules governing an auction now slated for Oct. 5. Tower said it needs to close the sale by mid-October so it has time to prepare for the holiday shopping season, when it records about 32 percent of its annual sales.
Tower, which is slated to go before the bankruptcy court for the first time Tuesday morning, said its revenue fell to $430 million for the fiscal year ended July 31 from $476.1 million a year earlier.
The company admits "intense" competition has hurt its business and that of other music retailers.
"The brick-and-mortar specialty music retail industry has suffered substantial deterioration recently," Tower said in court papers.
Industry observers say the chain could have a tough time finding a buyer willing to keep its brick-and-mortar stores operating in an industry increasingly dominated by online music purveyors and big-box retailers.
Phil Leigh, a senior analyst for Inside Digital Media Inc., said the Tower brand has value and will find a buyer, but its stores aren't likely to survive this latest bankruptcy.
"I think they'll sell off the name and liquidate the inventory," Leigh said.
Leigh and others who monitor the sector say traditional music retailers are fading away as online music sales explode and big-box players like Wal-Mart Stores Inc., Target Corp., Best Buy Co. and Circuit City Stores Inc. offer one-stop shopping for busy consumers.
Tower Records, however, said it's seen "substantial interest among potential buyers" and hopes to find a buyer willing to continue operating its stores. The company said it's actively negotiating with one potential buyer and received another offer on the eve of its bankruptcy filing.
It's "absolutely our intention to keep the Tower brand alive," spokeswoman Lisa Amore said.
In a statement Sunday, Chief Executive Joseph D'Amico said potential buyers recognize the "strength of the brand and its unique position within the marketplace."
Tower emerged from a quick Chapter 11 case in 2004 under the ownership of its bondholders and a trust created by founder Russell Solomon. Rival Musicland Holding Corp. filed for Chapter 11 protection in January and sold its assets, including the Sam Goody chain, to Trans World Entertainment Corp., a rumored Tower suitor.
"It's kind of shocking how many pure-play music retailers have closed down in the time that we've been tracking the market," said Russ Crupnick, a music and movies industry analyst for the NPD Group.
Legal music download retailers like Apple Computer Inc.'s iTunes have played a major role in displacing traditional retailers. Nielsen SoundScan data, cited by Tower in bankruptcy-court filings, said legal digital downloads grew 200 percent in 2005 while album sales fell 7.8 percent.
Data compiled by NPD Group ranked Tower as the No. 9 seller of physical music, including CDs, in 2002. In the first six months of 2006, it was tied for 12th, Crupnick said.
