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Parent of Tower Records Files for Bankruptcy

alexd

Administrator
Staff member
Parent of Tower Records Files for Chapter 11
By THE ASSOCIATED PRESS

Published: February 9, 2004

Filed at 10:35 a.m. ET

WEST SACRAMENTO, Calif. (AP) -- The parent company of Tower Records, the pioneering record retailer that invented the music megastore, has filed for bankruptcy, the company announced Monday.

MTS Inc., the privately held parent of the West Sacramento-based chain, said it has filed a prepackaged plan of reorganization and voluntary petitions for reorganization under Chapter 11 as the concluding step in a debt restructuring that began in May 2003.

The company filed in U.S Bankruptcy Court in Wilmington, Del.

``Court approval of the prepackaged plan will reduce existing debt by $80 million, effectively eliminating the financial risks that have faced Tower for the past three years,'' chief executive E. Allen Rodriguez said in a news release. ``Our issues are financial, not operational ... and we expect the prepackaged reorganization to be concluded quickly.''

The company said it expects to receive plan confirmation and successfully complete the reorganization within 60 days.

The filing comes nearly a year after MTS decided to sell Tower because it could not pay off $5.2 million in debt.

Tower Records was launched with a single store in 1960 and soon became internationally recognized for its in-store concerts and a deep selection of both popular and obscure music.

But the chain has fallen victim to a slump in the music business and its own missteps in a rapidly changing retailing environment.

Tower Records owns 93 stores, down from 171 during its heyday when annual sales topping $1 billion were routine.

The retailer's decline began in 1998 as falling sales, lack of hits and discounters such as Best Buy and Wal-Mart cut into profits of traditional record stores.

Business will continue as usual during the reorganization, Rodriguez said, and customers and employees of Tower stores will not notice any difference as a result of the filing.
 

DSV

TRIBE Promoter
They must have been doing something wrong. Remember Tower Records at Yonge & Queen. That place didn't last too long.
 
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The Tesseract

TRIBE Member
The record store is a dying breed.

While everything else is conglomerizing, the record store stands defiant, opting to be it's own demise.

People don't want to spend $15-20 on pieces of plastic that cost $0.05 to produce.
 
Originally posted by DSV
They must have been doing something wrong. Remember Tower Records at Yonge & Queen. That place didn't last too long.
They were doing okay when they first started, as they were paying attention to what their clientelle wanted, but then the downturn happened and it all went to shit.
 
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kerouacdude

TRIBE Member
Store on Queen lasted at least 4 years.
Makes me a bit sad, they helped sponsor the Rhino Records RMAT trivia contests that I entered three times. A lot of fun, and I won some wicked prizes.
 

green_souljah

TRIBE Member
Originally posted by Isosceles_CAT
Filesharing is murder.

As was the gas combustion engine to the blacksmith.


Difference being the blacksmiths couldnt afford high priced lawyers and simply moved on.
 

adorablehomeboy

TRIBE Promoter
Before the industrial revolution (or thereabouts) agriculture was 50% of jobs. Now it's 2% ish and there is more food than ever.

MP3's have made music a commodity.

Kodak is having the same survival problem with digipics.

Nokia used to make bikes tires in the 60's.

Tower should have moved on. I don't feel sorry for them. Someone got rich. Maybe they should have came up with the Ipod idea....

Tower (r.i.p) = cds, tapes, -> mp3s
Kodak (almost r.i.p) = Poloraid -> digicams
Tribe = newsprint ->

Just a thought, I'm not trying to troll (cuz there's tons of magazines out there)
 
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