Tower Troubles
08-04-06, 01:22 PM
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Tower Troubles
Last edited by Larbo; 08-04-06 at 01:35 PM.
08-04-06, 03:59 PM
#2
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Interesting article. It really doesn't look good for them. I haven't ever been to a Tower store, but I've bought a few things online. Their online prices are a little too high to be competitive, but they occasionally had some good deals with coupons.
08-04-06, 09:10 PM
#5
DVD Talk Legend
Two or three years ago, several small classical record companies cut Tower off for non-payment - but this time it's the biggies, which won't be as easy to ride out.
08-05-06, 12:20 AM
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Originally Posted by Larbo
So register or do a search. Post an active link.
08-05-06, 03:00 AM
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This sucks...even though they never had what I considered competetive prices, Tower was one of the few places that had knowledgeable staff and the biggest selection anywhere, even here in Honolulu. I really hope they come out of this stronger and better than ever.
08-05-06, 11:21 AM
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here ya go everybody.. and if you're too lazy to register, use bugmenot.com to get a login/pass..
From the Los Angeles Times
Firms Said to Stop Supplying Tower Records
At least three major music companies suspend deliveries to the struggling retailer, sources say.
By Charles Duhigg and Geoff Boucher
Times Staff Writers
Published August 4, 2006
At least three major music companies cut off CD shipments to Tower Records on Thursday after record executives said that the iconic music retailer had stopped paying its bills.
Universal Music Group, Warner Music Group Corp. and EMI Group sources confirmed privately that each of the companies had stopped sending albums to the Sacramento-based chain, which has struggled with declining sales as digital technologies have changed the way consumers buy music.
Sony BMG Music Entertainment also suspended shipments, according to industry sources.
The four record companies declined to comment.
The move comes just days after Tower Records named a new chief executive: crisis management and bankruptcy specialist Joseph D'Amico. Tower executives informed record companies this week that they would not pay outstanding invoices, according to sources familiar with the conversations.
Tower executives, including D'Amico, did not return phone calls. A Tower spokesperson declined to comment.
Industry insiders and analysts said it was unclear whether Tower Records had run out of money or was attempting to pressure the record companies to extend better terms.
If the music companies suspend shipments for long, Tower Records could be forced to shutter its 89 locations, including the famous store on Los Angeles' Sunset Strip, analysts said.
Tower Records confirmed Thursday that it was working with a Los Angeles investment bank to sell the company.
The retailer reportedly received at least five bids this year from private equity firms. When a sale failed to materialize, D'Amico was hired in what is the third management shuffle in four years.
The hard line by record companies, insiders said, is a response to Tower's unilateral decision to withhold payments after music executives had extended the chain credit for years.
"There are some music companies that have been trying very hard to keep Tower afloat," said an executive at one of the music companies familiar with the talks who requested anonymity because of the situation's delicacy. "They owe a lot of money."
Music fans bemoaned the potential loss of a retailer that catered to fanatical tastes.
"Led Zeppelin changed my life, AC/DC changed my guitar playing, and Black Sabbath changed my approach to songwriting — and I found all of them because of Tower Records," said Dave Mustain, lead singer of the veteran heavy-metal band Megadeth. "What could they possibly put in the place of that Sunset store? Another Starbucks?"
Others pointed out that Tower Records had averted crises before — most notably in 2004, when the retailer filed for bankruptcy protection but emerged less than a month later, after bondholders took control of 85% of the company's stock.
"Being on hold doesn't mean Tower is going to close up shop tomorrow, but it means they need a serious plan," said Geoff Mayfield, senior analyst at the music industry trade publication Billboard. "The industry isn't in a hurry to lose another retailer. There will be a lot of people who will want to support them in coming up with a plan."
Tower Records began in 1960, when a music enthusiast named Russ Solomon began selling records out of his father's Sacramento drugstore. In less than a decade, Tower Records expanded to San Francisco and Los Angeles, and soon thereafter across the nation and abroad.
Tower pioneered the mega-store concept, building multilevel stores with exhaustive inventories and passionate and knowledgeable staffs. Tower's late-night hours and in-store concerts drew crowds.
By the mid-1990s, Solomon was listed by Forbes magazine as one of America's richest men. Amid soaring profit, the company launched a major expansion financed by bonds worth $110 million.
But soon afterward, profit at Tower Records and other music-only retailers began to decline amid pressure from Internet piracy and chains such as Best Buy Co. and Wal-Mart Stores Inc. Retail music sales decreased by 17% from 2000 to 2005, according to the Recording Industry Assn. of America.
In 2003, Tower's parent company, MTS Inc., tried to sell the retailer after it defaulted on a $5.2-million payment, but there were no takers. Less than a year later, the Solomon family lost all but 15% of the company after it filed for bankruptcy protection.
This year the company installed in-store kiosks that would eventually allow customers to burn compilation CDs of current and out-of-stock songs. Last month the company launched a digital store where listeners could download individual tracks for 99 cents apiece. Industry analysts said the efforts were gaining traction.
Copyright © 2006, The Los Angeles Times
Firms Said to Stop Supplying Tower Records
At least three major music companies suspend deliveries to the struggling retailer, sources say.
By Charles Duhigg and Geoff Boucher
Times Staff Writers
Published August 4, 2006
At least three major music companies cut off CD shipments to Tower Records on Thursday after record executives said that the iconic music retailer had stopped paying its bills.
Universal Music Group, Warner Music Group Corp. and EMI Group sources confirmed privately that each of the companies had stopped sending albums to the Sacramento-based chain, which has struggled with declining sales as digital technologies have changed the way consumers buy music.
Sony BMG Music Entertainment also suspended shipments, according to industry sources.
The four record companies declined to comment.
The move comes just days after Tower Records named a new chief executive: crisis management and bankruptcy specialist Joseph D'Amico. Tower executives informed record companies this week that they would not pay outstanding invoices, according to sources familiar with the conversations.
Tower executives, including D'Amico, did not return phone calls. A Tower spokesperson declined to comment.
Industry insiders and analysts said it was unclear whether Tower Records had run out of money or was attempting to pressure the record companies to extend better terms.
If the music companies suspend shipments for long, Tower Records could be forced to shutter its 89 locations, including the famous store on Los Angeles' Sunset Strip, analysts said.
Tower Records confirmed Thursday that it was working with a Los Angeles investment bank to sell the company.
The retailer reportedly received at least five bids this year from private equity firms. When a sale failed to materialize, D'Amico was hired in what is the third management shuffle in four years.
The hard line by record companies, insiders said, is a response to Tower's unilateral decision to withhold payments after music executives had extended the chain credit for years.
"There are some music companies that have been trying very hard to keep Tower afloat," said an executive at one of the music companies familiar with the talks who requested anonymity because of the situation's delicacy. "They owe a lot of money."
Music fans bemoaned the potential loss of a retailer that catered to fanatical tastes.
"Led Zeppelin changed my life, AC/DC changed my guitar playing, and Black Sabbath changed my approach to songwriting — and I found all of them because of Tower Records," said Dave Mustain, lead singer of the veteran heavy-metal band Megadeth. "What could they possibly put in the place of that Sunset store? Another Starbucks?"
Others pointed out that Tower Records had averted crises before — most notably in 2004, when the retailer filed for bankruptcy protection but emerged less than a month later, after bondholders took control of 85% of the company's stock.
"Being on hold doesn't mean Tower is going to close up shop tomorrow, but it means they need a serious plan," said Geoff Mayfield, senior analyst at the music industry trade publication Billboard. "The industry isn't in a hurry to lose another retailer. There will be a lot of people who will want to support them in coming up with a plan."
Tower Records began in 1960, when a music enthusiast named Russ Solomon began selling records out of his father's Sacramento drugstore. In less than a decade, Tower Records expanded to San Francisco and Los Angeles, and soon thereafter across the nation and abroad.
Tower pioneered the mega-store concept, building multilevel stores with exhaustive inventories and passionate and knowledgeable staffs. Tower's late-night hours and in-store concerts drew crowds.
By the mid-1990s, Solomon was listed by Forbes magazine as one of America's richest men. Amid soaring profit, the company launched a major expansion financed by bonds worth $110 million.
But soon afterward, profit at Tower Records and other music-only retailers began to decline amid pressure from Internet piracy and chains such as Best Buy Co. and Wal-Mart Stores Inc. Retail music sales decreased by 17% from 2000 to 2005, according to the Recording Industry Assn. of America.
In 2003, Tower's parent company, MTS Inc., tried to sell the retailer after it defaulted on a $5.2-million payment, but there were no takers. Less than a year later, the Solomon family lost all but 15% of the company after it filed for bankruptcy protection.
This year the company installed in-store kiosks that would eventually allow customers to burn compilation CDs of current and out-of-stock songs. Last month the company launched a digital store where listeners could download individual tracks for 99 cents apiece. Industry analysts said the efforts were gaining traction.
Copyright © 2006, The Los Angeles Times
08-20-06, 09:56 PM
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Tower Records to Sell Company Under Chapter 11 Sale Process
PR Newswire
Enters into $85 million in Debtor in Possession Financing; Negotiates Delivery Terms with Key Vendor Partners; Stores Remain Open ... Business as Usual
SACRAMENTO, Calif., Aug. 20 /PRNewswire/ -- MTS Incorporated and its subsidiaries (Tower Records), America's leading independent music and entertainment retailer which owns and operates 89 Tower Records stores in 20 states nationwide, tonight announced its intent to sell the Company through a process (Section 363) under Chapter 11 of the Bankruptcy Code. This process, which is subject to court approval, sets in motion a timeline of events that will ultimately insure a sale of the Company within approximately 60 days of the filing date.
According to Joseph D'Amico, Tower's recently named CEO, the filing is a necessary vehicle to execute his commitment to sell the Company. "Tower Records has conducted an extensive sale process and this step will allow buyers to complete a sale in time for the holiday season while maximizing the value for stakeholders." In March of 2006, the Company retained Houlihan Lokey Howard & Zukin as its marketing and sales agent. The Company is evaluating Letters of Intent from parties interested in acquiring the Company. Mr. D'Amico stated, "Potential parties seeking to acquire Tower Records recognize the strength of the brand and its unique position within the marketplace, making it a very attractive opportunity."
The Company also announced that it has entered into an $85 million Debtor in Possession financing with its current bank group led by CIT as agent. This financing will fund its operations and purchases of new product while the Company completes the sale. Tower has also been able to re-negotiate delivery terms for product with the trade. D'Amico commented, "The trade has always supported Tower through difficult times and we recognize that their support is imperative to the consummation of a transaction."
Last week, Tower was voted 'Retailer of the Year' (Large Division) at the 48th annual National Association of Recording Merchandisers (NARM convention for the third consecutive year. "Tower Records is a great brand that has a unique place in the market. I am confident that the brand will continue to endure for many years to come," added D'Amico.
Visit http://www.omnimgt.com to view filing documentation by clicking "Real Time Data" and Tower Records 2006.
About Tower Records
Since 1960, Tower Records has been recognized and respected throughout the world for its unique brand of retailing. Founded in Sacramento, California, with the singular vision to have a music store with unparalleled selection and fair prices, Tower forges ahead with the development of exciting shopping environments, espousing diverse product ranges, artist performances, and technological advances in merchandising. Tower maintains its commitment to providing the deepest selection of entertainment merchandise in stores that celebrate the unique interests and needs of the local community. For the third year in a row, the music industry has voted Tower Records "Retailer of the Year."
Tower owns and operates 89 stores in the U.S. with 144 additional stores run by licensees in nine different countries. The Company opened one of the first Internet music stores on America Online in June 1995 and followed a year later with the launch of Tower.com.
SOURCE Tower Records
Related links:
http://www.tower.com
http://www.omnimgt.com
PR Newswire
Enters into $85 million in Debtor in Possession Financing; Negotiates Delivery Terms with Key Vendor Partners; Stores Remain Open ... Business as Usual
SACRAMENTO, Calif., Aug. 20 /PRNewswire/ -- MTS Incorporated and its subsidiaries (Tower Records), America's leading independent music and entertainment retailer which owns and operates 89 Tower Records stores in 20 states nationwide, tonight announced its intent to sell the Company through a process (Section 363) under Chapter 11 of the Bankruptcy Code. This process, which is subject to court approval, sets in motion a timeline of events that will ultimately insure a sale of the Company within approximately 60 days of the filing date.
According to Joseph D'Amico, Tower's recently named CEO, the filing is a necessary vehicle to execute his commitment to sell the Company. "Tower Records has conducted an extensive sale process and this step will allow buyers to complete a sale in time for the holiday season while maximizing the value for stakeholders." In March of 2006, the Company retained Houlihan Lokey Howard & Zukin as its marketing and sales agent. The Company is evaluating Letters of Intent from parties interested in acquiring the Company. Mr. D'Amico stated, "Potential parties seeking to acquire Tower Records recognize the strength of the brand and its unique position within the marketplace, making it a very attractive opportunity."
The Company also announced that it has entered into an $85 million Debtor in Possession financing with its current bank group led by CIT as agent. This financing will fund its operations and purchases of new product while the Company completes the sale. Tower has also been able to re-negotiate delivery terms for product with the trade. D'Amico commented, "The trade has always supported Tower through difficult times and we recognize that their support is imperative to the consummation of a transaction."
Last week, Tower was voted 'Retailer of the Year' (Large Division) at the 48th annual National Association of Recording Merchandisers (NARM convention for the third consecutive year. "Tower Records is a great brand that has a unique place in the market. I am confident that the brand will continue to endure for many years to come," added D'Amico.
Visit http://www.omnimgt.com to view filing documentation by clicking "Real Time Data" and Tower Records 2006.
About Tower Records
Since 1960, Tower Records has been recognized and respected throughout the world for its unique brand of retailing. Founded in Sacramento, California, with the singular vision to have a music store with unparalleled selection and fair prices, Tower forges ahead with the development of exciting shopping environments, espousing diverse product ranges, artist performances, and technological advances in merchandising. Tower maintains its commitment to providing the deepest selection of entertainment merchandise in stores that celebrate the unique interests and needs of the local community. For the third year in a row, the music industry has voted Tower Records "Retailer of the Year."
Tower owns and operates 89 stores in the U.S. with 144 additional stores run by licensees in nine different countries. The Company opened one of the first Internet music stores on America Online in June 1995 and followed a year later with the launch of Tower.com.
SOURCE Tower Records
Related links:
http://www.tower.com
http://www.omnimgt.com
08-22-06, 07:02 AM
#11
DVD Talk Legend
...and from this morning's NY Times:
By DOW JONES/THE ASSOCIATED PRESS
Published: August 22, 2006
The parent company of Tower Records, which filed for Chapter 11 bankruptcy protection on Sunday, is seeking to sell its assets through a court-supervised auction Oct. 5.
The company, which operates 89 stores in 20 states and is owned by the privately held MTS Inc., said yesterday that it needed to close the sale by mid-October to prepare for the holiday shopping season, when it has about 32 percent of its annual sales.
Tower said revenue fell to $430 million for the fiscal year ended July 31, from $476.1 million a year earlier. The company said intense competition had 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. The company made its Chapter 11 filing in United States Bankruptcy Court in Wilmington, Del.
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 sellers and big-box retailers.
Phil Leigh, a senior analyst for Inside Digital Media Inc., said that the Tower brand had value and would find a buyer, but that its stores were not likely to survive this latest bankruptcy. The company emerged from another bankruptcy in 2004. "I think they'll sell off the name and liquidate the inventory," Mr. Leigh said.
Tower Records, however, said it had seen "substantial interest among potential buyers" and hoped to find a buyer willing to continue operating its stores. The company said it was actively negotiating with one potential buyer and had received another offer on the eve of its bankruptcy filing.
It is "absolutely our intention to keep the Tower brand alive," a spokeswoman, Lisa Amore, said.
By DOW JONES/THE ASSOCIATED PRESS
Published: August 22, 2006
The parent company of Tower Records, which filed for Chapter 11 bankruptcy protection on Sunday, is seeking to sell its assets through a court-supervised auction Oct. 5.
The company, which operates 89 stores in 20 states and is owned by the privately held MTS Inc., said yesterday that it needed to close the sale by mid-October to prepare for the holiday shopping season, when it has about 32 percent of its annual sales.
Tower said revenue fell to $430 million for the fiscal year ended July 31, from $476.1 million a year earlier. The company said intense competition had 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. The company made its Chapter 11 filing in United States Bankruptcy Court in Wilmington, Del.
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 sellers and big-box retailers.
Phil Leigh, a senior analyst for Inside Digital Media Inc., said that the Tower brand had value and would find a buyer, but that its stores were not likely to survive this latest bankruptcy. The company emerged from another bankruptcy in 2004. "I think they'll sell off the name and liquidate the inventory," Mr. Leigh said.
Tower Records, however, said it had seen "substantial interest among potential buyers" and hoped to find a buyer willing to continue operating its stores. The company said it was actively negotiating with one potential buyer and had received another offer on the eve of its bankruptcy filing.
It is "absolutely our intention to keep the Tower brand alive," a spokeswoman, Lisa Amore, said.
08-24-06, 01:08 PM
#12
I guess it's pretty hard to survive nowadays when you sell stuff for MSRP. They were my main source of laserdiscs in the early 90's and it was fun browsing the stores, but once online buying and pricing came about I stopped buying and just browsed.
08-24-06, 08:42 PM
#14
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I guess it's pretty hard to survive nowadays when you sell stuff for MSRP.
let the tower curmble. they suck anyway. Do digial to keep up with consumer demeand,
08-25-06, 08:00 PM
#15
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"digial"?? Actually they do have a DIGITAL music download service now, but I've never understood the attraction of listening to music on a computer. I have an MP3 player that I won a few months ago, but I don't really get what people see in those either. I loaded it up with songs from CDs, let it play a few hours marveling at how it could fit all that music in such a small space, but don't have any practical use for it.
As long as the record labels continue to price CDs at $18.99, the music business is going to be in trouble. (And there still is some good music being made, it just doesn't get played on the radio very much.)
As long as the record labels continue to price CDs at $18.99, the music business is going to be in trouble. (And there still is some good music being made, it just doesn't get played on the radio very much.)
08-25-06, 09:46 PM
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I guess it's pretty hard to survive nowadays when you sell stuff for MSRP.
They used to have little competition, now you have mega stores selling dvds below cost in many cases. We all love our bargains, but the price will be smaller selection and pathetic customer service from the mega stores.
