Tower Records, one of the largest specialty retailers of music and video in the country and one of the last family-run dynasties in an industry increasingly dominated by mass merchants like Wal-Mart, filed for Chapter 11 bankruptcy protection on Monday.
The filing by Tower and its parent company, MTS Inc, comes at a time when the traditional record stores, where generations of Americans discovered music, are under siege from big-box and electronics stores as well as from the growing availability of music online.
The filing is intended to reduce the company's debt by US$80 million so the interest costs on its debt will consume less of its revenue.
Tower officials said that its 93 stores from California to New York would remain open and that neither its customers nor its employees would notice any change.
But some observers said Tower's plight was a bad sign for the industry at large.
"The future looks particularly grim for all land-based music retailers," said Burt Flickinger III, managing director of Strategic Resource Group, a consulting firm that has worked with retailers and recording companies. He said such stores "literally have a toe-tag on them and they're boxed up for the proverbial boneyard."
With the demise of once dominant stores like Tower that specialize in selling every category of music and do it with great depth and range, Flickinger predicted, "Most consumers will move to a much narrower band of music -- what they hear of the top 25 songs that are programmed in vicious rotation by the FM radio stations or top 20 almost preselected MTV songs."
Michael Dreese, chief executive of Newbury Comics, an independent chain of 25 record stores in the Boston area, said, "If Home Depot has only 12 power drills to offer a carpenter, that's probably not desirable. But if the society loses 10,000 artistic voices, that's a disaster. Because music is the most accessible way that society communicates with itself."
Tower, which has eight stores in New York state and 44 in California, and outlets in states ranging from Oregon to Tennessee, had been losing money and had tried unsuccessfully to find a buyer.
Under the planned restructuring, the Solomon family, who founded Tower, would give control of the company to its creditors.
"Our issues are financial, not operational," Allen Rodriguez, Tower's chief executive, said on Monday in a statement. He said the reorganization was expected to be completed within 45 to 60 days.
Martin Zohn, a partner in the bankruptcy practice group of Proskauer Rose, a law firm based in New York City, said the challenge facing Tower Records after its restructuring would be "to get customers into the stores and to get them to carry the product out of the stores. The competition is fierce. And they have to compete not only on price but on the pleasantness of the buying experience."
At Tower Records on Broadway at West Fourth Street in Manhattan, shoppers said Monday that they would be lost without the store.
"This is probably the best classical record store in town," said Tom Mac Giolla Dheachair, 40, an art-exhibit installer who was considering CDs by Schubert and Schoenberg. "This store is like a musical oasis in the city."
‘HERO OF THE ERA’: President Tsai Ing-wen expressed deep sadness at Lee’s passing, and told the government to assist his family with all their needs Former president Lee Teng-hui (李登輝) passed away at 7:24pm yesterday at Taipei Veterans General Hospital. He was 97 years old. The hospital stated the cause of death as septic shock and multiple organ failure. Lee had been hospitalized there since February, when he choked on a mouthful of milk at home. He was later diagnosed with pulmonary infiltrates and aspiration pneumonia. The hospital said that Lee had been treated with antibiotics, but that his health had not improved, as his advanced age and diabetes had inhibited his immune system and led to recurring infections. During his hospitalization, Lee underwent daily kidney dialysis, which removed
‘WEAK POSITIVE’: The man arrived in Taiwan in May and was quarantined for two weeks, Chen Shih-chung said, adding that he might be infected a long time ago The government is considering tightening mask-wearing rules again in light of a potential domestic COVID-19 infection, Minister of Health and Welfare Chen Shih-chung (陳時中) said yesterday. The Central Epidemic Command Center (CECC) confirmed seven new COVID-19 cases, six of which are imported. The other case involves a Belgian engineer who entered Taiwan on May 3 and remained in quarantine until May 17, said Chen, who heads the CECC. Although the source of infection has yet to be identified, the case could end the nation’s record of not having any domestic cases in the previous 110 days. The Belgian, in his 20s, is a technician
RECEIVING TREATMENT: President Tsai Ing-wen, Vice President William Lai and Premier Su Tseng-chang visited former president Lee Teng-hui yesterday morning Taipei Veterans General Hospital yesterday rebutted speculation that former president Lee Teng-hui (李登輝) had died a day earlier, saying that he was weak, but receiving treatment. The hospital said the 97-year-old Lee was not in good condition and needed ongoing care, adding that if there are any changes in his condition, it would make those public. The comments came after rumors emerged online on Tuesday that Lee had died after being hospitalized since early February. Soon after the unsubstantiated rumors emerged, reporters started flocking to the hospital seeking confirmation. Lee was admitted to Taipei Veterans General Hospital on Feb. 8 after choking while drinking
THAI CASE UPDATE: Twenty-nine close contacts of the worker have been tested with two types of tests, including 18 dorm mates, with 28 negative results so far Five imported cases of COVID-19, four from the Philippines and one from Hong Kong, were reported yesterday, bringing the total confirmed cases in Taiwan to 467, the Central Epidemic Command Center (CECC) said yesterday. The four returning from the Philippines were on the same flight, and the local health department has identified 15 people who had direct contact with them — including 10 passengers in the two rows in front or behind them, who have been put under 14-day home isolation, and five crew members, who will practice 14-day self-health management, said Centers for Disease Control (CDC) Deputy Director-General Chuang Jen-hsiang