Goodbye Tower
Tower Records to Be Liquidated
October 7, 2006
Tower Records, the long-troubled music retailer which filed for bankruptcy for the second time in late August, was purchased at auction yesterday by Great American Group, which will begin liquidating the company immediately.
The Associated Press reports that a federal judge in Delaware approved the sale of Tower to Great American yesterday afternoon following a two-day, 30-hour auction. The liquidation process, including going-out-of-business sales, will start today.
According to AP, Great American's winning bid of $134.3 million was only $500,000 more than that of Trans World Entertainment, which had intended to continue operating at least a few of Tower's stores.
A member of Tower's legal team told the AP that the company's assets will be sold for a total of $150 million, including the sale of various leases and properties. Tower operated 89 stores in 20 states and owes creditors approximately $200 million.
Tower Records was founded in 1960 when music enthusiast Russ Solomon began selling records out of his father's Sacramento drugstore basement. Tower eventually built multi-level stores staffed by expert staff and was a dominant American music retailer during the 1980s — valued especially by aficionados of classical, jazz, world music and other genres that were difficult to find in most pop-oriented music stores.
The company ran into financial trouble after a mid-1990s expansion was less profitable than expected due to competition from retailers such as Wal-Mart and from online stores such as Amazon.com, as well as from the revolution in downloading music in digital files rather than purchasing it on discs.
In August, The Los Angeles Times reported that Universal Music Group, Warner Music Group and EMI Music had suspended shipments to Tower after it stopped paying its bills.
October 7, 2006
Tower Records, the long-troubled music retailer which filed for bankruptcy for the second time in late August, was purchased at auction yesterday by Great American Group, which will begin liquidating the company immediately.
The Associated Press reports that a federal judge in Delaware approved the sale of Tower to Great American yesterday afternoon following a two-day, 30-hour auction. The liquidation process, including going-out-of-business sales, will start today.
According to AP, Great American's winning bid of $134.3 million was only $500,000 more than that of Trans World Entertainment, which had intended to continue operating at least a few of Tower's stores.
A member of Tower's legal team told the AP that the company's assets will be sold for a total of $150 million, including the sale of various leases and properties. Tower operated 89 stores in 20 states and owes creditors approximately $200 million.
Tower Records was founded in 1960 when music enthusiast Russ Solomon began selling records out of his father's Sacramento drugstore basement. Tower eventually built multi-level stores staffed by expert staff and was a dominant American music retailer during the 1980s — valued especially by aficionados of classical, jazz, world music and other genres that were difficult to find in most pop-oriented music stores.
The company ran into financial trouble after a mid-1990s expansion was less profitable than expected due to competition from retailers such as Wal-Mart and from online stores such as Amazon.com, as well as from the revolution in downloading music in digital files rather than purchasing it on discs.
In August, The Los Angeles Times reported that Universal Music Group, Warner Music Group and EMI Music had suspended shipments to Tower after it stopped paying its bills.
posted by Tony @ 10:16 AM
2 Comments:
At 12:37 PM,
Anonymous said…
Back in THE DAY, my pop used to buy records at that original Tower drugstore. Also back in THE DAY, he and my mom bought their backpacking backpacks from their inventor, Mr. Kelty himself...and we all used to shop at the first Trader Joe's store in Pasadena, CA (and its predecessor, Pronto Market). Oops, this is a music blog....well, my brother used to take classical trumpet lessons from one of the guys on the Lawrence Welk show...until he revolted, taught himself guitar, and later formed a rock band called The Neighbors and starved for 8 years.
Not sure there's any meaning in all this. Sorry Tony!
F-S
At 4:15 PM,
Tony said…
you're pretty historic!!!
i bet you like glenn gould also. i know who this is!
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