Chilling news for Tower
09-14-06, 08:54 PM
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Chilling news for Tower
This is an excerpt from an L.A. business blog:
http://www.laobserved.com/biz/2006/0...ews_for_to.php
And also it gives a link to a pretty good story from today's Sacramento Bee, here are 2 quotes:
and
Apparently nothing is for certain except that the bankruptcy auction for Tower Records is set for Oct. 5.
But no matter what happens, looks like there will be some sales ahead.
http://www.laobserved.com/biz/2006/0...ews_for_to.php
The lead bidder in the court-supervised bankruptcy sale is a Woodland Hills-based liquidating firm called Great American Group. That could signal the closing of Tower Records, as opposed to selling the Sacramento-based chain. Great American is mostly an auctioneer and liquidator, not a retailer.
But the news that Great American is lead bidder rattled some in the music business. "That's not good. That means they're basically looking to buy the inventory and close the stores," said an executive at a small record label who does business with Tower. He declined to be identified because of his relationship with Tower.
Most experts believe that if Tower survives the bankruptcy sale, the new owner will close some of its 89 stores, 13 of which have been identified by Tower as unprofitable. The retailer operates six stores in greater Sacramento. It's unclear what would become of Tower's West Sacramento headquarters, which employs several hundred workers.
But no matter what happens, looks like there will be some sales ahead.
09-14-06, 09:41 PM
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09-15-06, 09:29 AM
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That's disappointing. I don't shop there often since the prices are terrible, but if I can't find something anywhere else (even online) I can sometimes find it at Tower.
10-05-06, 05:54 PM
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http://www.billboard.biz/bb/biz/news..._id=1003221051
Radius Equity Out Of Tower Records Bidding
Radius Equity—considered the "white knight" in the bidding for Tower Records—failed to put together financing in time for the Chapter 11 auction of the troubled chain. The auction began today in the offices of a Wilmington, Del. law firm.
...
Radius Equity Out Of Tower Records Bidding
Radius Equity—considered the "white knight" in the bidding for Tower Records—failed to put together financing in time for the Chapter 11 auction of the troubled chain. The auction began today in the offices of a Wilmington, Del. law firm.
...
10-05-06, 08:50 PM
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I thought something was up. Went to Tower a couple times in the last several weeks and saw a dismal sight. Their usual sales ZIPPO! Their sale that was supposed to go until Oct 2 looked like it was cut short by almost 2 weeks (signs were down that had been up, no flyers about the sale -- Warner Home Video on sale (includes BBC, National Geographic , HBO, New Line an IMAX). The place seemed to be dead, even though there were people buying stuff, the place was very lackidasical.
I think they are gone - unfortunately - a place where you could get some good deals but mainly if you could not find it, they probably had it.
I think they are gone - unfortunately - a place where you could get some good deals but mainly if you could not find it, they probably had it.
10-05-06, 11:45 PM
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Media Play, Suncoast, Tower... is it any surprise that the chains going under are the ones that stupidly insist on selling at MSRP? I swear, they're as ignorant as the MPAA and RIAA in that even though a new method of distribution has arrived, they stubbornly adhere to their old business model.
With today's ability to find anything online, the only reason to go to a B&M store is either for instant gratification, emergency purchase or because no online site will do business with you (usually because you don't have / won't use a credit card). So while stores like Tower and Media Play used to thrive because they had things that your local Best Buy / Circuit City / Target / whatever didn't carry, it's no longer that big a deal. You can go to Amazon.com, or Deep Discount DVD or even eBay and get your item at below MSRP. The stores that refuse to roll with the changes and become competitive with online sellers will die out. I think the last major bastion of MSRP still standing is FYE, but for how much longer?
With today's ability to find anything online, the only reason to go to a B&M store is either for instant gratification, emergency purchase or because no online site will do business with you (usually because you don't have / won't use a credit card). So while stores like Tower and Media Play used to thrive because they had things that your local Best Buy / Circuit City / Target / whatever didn't carry, it's no longer that big a deal. You can go to Amazon.com, or Deep Discount DVD or even eBay and get your item at below MSRP. The stores that refuse to roll with the changes and become competitive with online sellers will die out. I think the last major bastion of MSRP still standing is FYE, but for how much longer?
10-06-06, 10:37 AM
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I'm on their e-mail list and all I've been getting are e-mails saying stuff like "We're still here" and "Everything's going to be fine". They acknowledged they were going through a rough patch and it looked like they were getting new stock, despite being cut off by several distributors. Their prices were still pretty high. I don't think they'll be around much longer. It kind of reminded me of when a restaurant puts out a sign that says "closed for remodeling" which translates to "closed forever."
10-06-06, 08:46 PM
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Tower Records Bankruptcy To Result In Liquidation
Sale To Great American Group Approved Friday
POSTED: 4:29 pm PDT October 6, 2006
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WILMINGTON, Del. -- After a lengthy auction stretching over two days, a federal bankruptcy judge on Friday approved the sale of California-based Tower Records to Great American Group, which plans to liquidate the music retailer.
After almost 30 hours of what attorneys described as "robust" and "vigorous" bidding, Great American won with a bid of $134.3 million, beating Trans World Entertainment, which had hoped to continue operating at least some Tower stores, by a single bid increment of $500,000.
Peter Gurfein, an attorney representing Tower Records, said the company will be sold for an aggregate of $150 million, including the sale of various leases and properties.
Gurfein said Great American plans to begin the liquidation process and going out of business sales on Saturday, which eventually will result in the elimination of the jobs of some 3,000 Tower employees.
"This is not an easy decision," said bankruptcy Judge Brendan Shannon, who nevertheless noted that the Tower debtors and other parties had agreed the bidding process was conducted fairly and in good faith.
Tower Records, which has 89 stores in 20 states and owes creditors about $200 million, filed for Chapter 11 reorganization in August. In its filing, the company said it has been hurt by an industrywide decline in music sales, downloading of online music and competition from big-box stores such as Wal-Mart.
Tower's Chapter 11 filing came two years after initial reorganization that resulted in bondholders forgiving millions of dollars in debt but taking an 85 percent stake in the company, leaving founder Russ Solomon and his family with 15 percent.
Solomon founded Tower in Sacramento in 1960, starting by selling records out of his father's drug store and eventually opening the company's landmark store on Hollywood's Sunset Boulevard in 1969. As part of the bankruptcy auction, the Sunset property will be sold for $12 million.
Michael Bloom, an attorney representing Tower's secured trade creditors, urged Shannon to consider the closeness of the bids and the effect that liquidation would have before deciding whether to approve the sale.
"We can save this company or we can liquidate it," Bloom argued. "... Sometimes, the highest bid is not the best bid. In this case, your honor, we believe the best bid is the Trans World bid."
Trans World, which has about 1,100 mostly mall-based stores nationwide, has recently acquired other music retailers such as Sam Goody and Wherehouse Music, consolidating most of its acquisitions under the FYE name, which stands for For Your Entertainment.
Tim Pohl, an attorney representing Trans World, asked the judge whether $500,000 was "a material enough difference" to liquidate a company, as opposed to keeping thousands of people employed.
But Jay Indyke, an attorney for Great American, said Trans World and its bidding partners had discussed liquidating inventory and closing about two dozen Tower stores, and that they would not say how many stores they would continue to operate.
http://www.kcra.com/news/10020547/detail.html
Let the madness begin tomorrow. I wonder what the starting sale prices will be...
Sale To Great American Group Approved Friday
POSTED: 4:29 pm PDT October 6, 2006
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WILMINGTON, Del. -- After a lengthy auction stretching over two days, a federal bankruptcy judge on Friday approved the sale of California-based Tower Records to Great American Group, which plans to liquidate the music retailer.
After almost 30 hours of what attorneys described as "robust" and "vigorous" bidding, Great American won with a bid of $134.3 million, beating Trans World Entertainment, which had hoped to continue operating at least some Tower stores, by a single bid increment of $500,000.
Peter Gurfein, an attorney representing Tower Records, said the company will be sold for an aggregate of $150 million, including the sale of various leases and properties.
Gurfein said Great American plans to begin the liquidation process and going out of business sales on Saturday, which eventually will result in the elimination of the jobs of some 3,000 Tower employees.
"This is not an easy decision," said bankruptcy Judge Brendan Shannon, who nevertheless noted that the Tower debtors and other parties had agreed the bidding process was conducted fairly and in good faith.
Tower Records, which has 89 stores in 20 states and owes creditors about $200 million, filed for Chapter 11 reorganization in August. In its filing, the company said it has been hurt by an industrywide decline in music sales, downloading of online music and competition from big-box stores such as Wal-Mart.
Tower's Chapter 11 filing came two years after initial reorganization that resulted in bondholders forgiving millions of dollars in debt but taking an 85 percent stake in the company, leaving founder Russ Solomon and his family with 15 percent.
Solomon founded Tower in Sacramento in 1960, starting by selling records out of his father's drug store and eventually opening the company's landmark store on Hollywood's Sunset Boulevard in 1969. As part of the bankruptcy auction, the Sunset property will be sold for $12 million.
Michael Bloom, an attorney representing Tower's secured trade creditors, urged Shannon to consider the closeness of the bids and the effect that liquidation would have before deciding whether to approve the sale.
"We can save this company or we can liquidate it," Bloom argued. "... Sometimes, the highest bid is not the best bid. In this case, your honor, we believe the best bid is the Trans World bid."
Trans World, which has about 1,100 mostly mall-based stores nationwide, has recently acquired other music retailers such as Sam Goody and Wherehouse Music, consolidating most of its acquisitions under the FYE name, which stands for For Your Entertainment.
Tim Pohl, an attorney representing Trans World, asked the judge whether $500,000 was "a material enough difference" to liquidate a company, as opposed to keeping thousands of people employed.
But Jay Indyke, an attorney for Great American, said Trans World and its bidding partners had discussed liquidating inventory and closing about two dozen Tower stores, and that they would not say how many stores they would continue to operate.
http://www.kcra.com/news/10020547/detail.html
Let the madness begin tomorrow. I wonder what the starting sale prices will be...
10-06-06, 09:38 PM
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Not good ! I was hoping atleast some of their stores and online would stay open. Like I and others have said before, sometimes when you can not find something you really want, you will pay MSRP for it. But now another store goes that means one less place to get such an item.
10-06-06, 10:28 PM
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DVD Talk Legend
I'll be at Lincoln Center tmorrow, so I'll stop in and see what's happening as far as any sale. Like many people, I rarely bought anything there, but it's been a great place to browse because they have a great selection. But that's why they are going under - they could get people in the door, but their pricing kept people from buying.
10-06-06, 11:59 PM
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Super-sale prices will be a mind-blowing 10% off list the first week. Prices will get better each following week, but after it's all gone you can look forward to having a crappier selection of CDs and DVDs in your area unless you're just into the top 10.
Maybe the record companies will finally get their heads out of their asses and realize that they are pricing CDs ridiculously high and that's why so many people are getting music illegally now. They are gonna be hurting BAD with Tower gone.
DVDs on the other hand have been funny because the companies have actually been pricing those reasonably, but so many places have sprung up that discount them even more making it almost inconceivable to pay full list price for them. Then you've got the loss-leader pricing on the big releases on top of that; the specialty stores just can't compete on those titles, at least not the first week they're out. I'd still pay list price for most DVDs if that was the only way to get them, but buying a CD at list price is completely out of the question.
I totally expected Blockbuster to go down before Tower though- hopefully they will be next. They certainly deserve it a lot more. Wal-Mart will eventually get what's coming to them as well.
Maybe the record companies will finally get their heads out of their asses and realize that they are pricing CDs ridiculously high and that's why so many people are getting music illegally now. They are gonna be hurting BAD with Tower gone.
DVDs on the other hand have been funny because the companies have actually been pricing those reasonably, but so many places have sprung up that discount them even more making it almost inconceivable to pay full list price for them. Then you've got the loss-leader pricing on the big releases on top of that; the specialty stores just can't compete on those titles, at least not the first week they're out. I'd still pay list price for most DVDs if that was the only way to get them, but buying a CD at list price is completely out of the question.
I totally expected Blockbuster to go down before Tower though- hopefully they will be next. They certainly deserve it a lot more. Wal-Mart will eventually get what's coming to them as well.
Last edited by Alan Smithee; 10-07-06 at 12:02 AM.
10-07-06, 08:08 AM
#18
DVD Talk Legend
Originally Posted by Cameron
sad days...i wonder what they will be selling there rental titles off for...
Good question - I forgot all about the large rental stock the store near me has!
10-07-06, 04:33 PM
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Originally Posted by bearkiss
I was just at the tower in nashville, tn... everything in the store 30% off...
10-07-06, 08:15 PM
#22
DVD Talk Legend
Originally Posted by bearkiss
I was just at the tower in nashville, tn... everything in the store 30% off...
Only 10% off at NYC's Lincoln Center location, and rentals are NOT being sold at this time.
10-08-06, 08:35 AM
#23
DVD Talk Gold Edition
There are no Towers where I live, so it was always a treat to visit them when I was traveling. I'll miss them. I wonder if they'll still be able to operate their online business...
10-08-06, 11:46 AM
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CORRECTION! I went to the tower again today - this time to buy instead of just browse... that's when I noticed the signs a bit more clearly! cds & dvds are 10% off... books are 20% off... and magazines are 30% off... toys & storage so far are not discounted at all!
10-09-06, 08:44 AM
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From Home Media Retailing:
http://www.homemediaretailing.com/in...=2&newsid=9763
Tower Records Ceasing Operations
Author: ERIK GRUENWEDEL
[email protected]
Posted: October 6, 2006
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Inventory liquidator Great American Group, whose benchmark bid for bankrupt Tower Records and Video foreshadowed the venerable music retailer’s demise, was reportedly declared the winner Oct. 6 by a bankruptcy judge. Great American bid $134 million, topping an unknown bid from previous favorite Trans World Entertainment.
Woodland Hills, Calif.-based Great American is slated to begin going-out-of-business sales over the next 10 weeks at most Tower locations beginning Oct. 7, according to a report by the Sacramento Bee.
The sale apparently does not include online asset Tower.com.
Forty-five-year-old Tower, with 89 stores, filed for bankruptcy for the second time Aug. 20, listing debts and assets in excess of $100 million each.
“I am deeply saddened to report to you that after a very significant 29-hour effort, Great American has outbid [Trans World] at the auction,” Tower interim CEO Joseph D’Amico said in a note to employees reported by the Bee. “My heart goes out to each of you, who have poured your hearts and souls into this great company.”
Great American emerged triumphant following a two-day auction among 16 bidders that began Oct. 5 at Tower’s law firm in Wilmington, Del. Top contender Chicago-based investment firm Radius Equity Partners soon pulled out of the bidding after failing to secure $120 million in funding after an all-night effort.
“We couldn’t pull everything together [financially] in the five-week period,” said Stuart Jamieson, managing director of Radius. “It’s been a bad day.”
Author: ERIK GRUENWEDEL
[email protected]
Posted: October 6, 2006
Email this Story to Friend
Inventory liquidator Great American Group, whose benchmark bid for bankrupt Tower Records and Video foreshadowed the venerable music retailer’s demise, was reportedly declared the winner Oct. 6 by a bankruptcy judge. Great American bid $134 million, topping an unknown bid from previous favorite Trans World Entertainment.
Woodland Hills, Calif.-based Great American is slated to begin going-out-of-business sales over the next 10 weeks at most Tower locations beginning Oct. 7, according to a report by the Sacramento Bee.
The sale apparently does not include online asset Tower.com.
Forty-five-year-old Tower, with 89 stores, filed for bankruptcy for the second time Aug. 20, listing debts and assets in excess of $100 million each.
“I am deeply saddened to report to you that after a very significant 29-hour effort, Great American has outbid [Trans World] at the auction,” Tower interim CEO Joseph D’Amico said in a note to employees reported by the Bee. “My heart goes out to each of you, who have poured your hearts and souls into this great company.”
Great American emerged triumphant following a two-day auction among 16 bidders that began Oct. 5 at Tower’s law firm in Wilmington, Del. Top contender Chicago-based investment firm Radius Equity Partners soon pulled out of the bidding after failing to secure $120 million in funding after an all-night effort.
“We couldn’t pull everything together [financially] in the five-week period,” said Stuart Jamieson, managing director of Radius. “It’s been a bad day.”