Tower Records Begins Liquidation
Mon, 09 Oct 2006 11:22:36
With 89 stores in 20 states, Tower Records used to be one of the most dominant retail music businesses in America. Those days passed some time ago, and now their time is up entirely. After a lengthy auction, the California-based company has been sold to the Great American Group, who promptly announced their plans to liquidate Tower's assets. "Going Out of Business" sales already began this weekend, and 3,000 Tower employees will soon be out of work.
"My heart goes out to each of you who have poured your hearts and souls into this company," Tower CEO Joseph D'Amico told employees in an email.
Bankruptcy judge Brendan Shannon approved the sale, albeit reluctantly, admitting that it was "not an easy decision." The runner-up, Trans World Entertainment, had a bid $500,000 under the winning bid of $134.3 million, but also planned to keep some stores open -- probably under their FYE name, which has recently swallowed Sam Goody and Wherehouse -- and therefore retain a number of employees.
"Sometimes the highest bid is not the best bid," said Michael Bloom, an attorney representing Tower's creditors. Trans World attorney Tim Pohl joined in, saying that the $500,000 difference was not worth the sacrifice of thousands of employees. Shannon, however, was not swayed.
Russ Solomon founded Tower in 1960, and later opened the company's iconic store on the Sunset Strip in Los Angeles. In contrast to most other leading music retailers, Tower had a strong focus on back catalog, imports and independent labels. When they began their bankruptcy filings, the company blamed the explosion of Internet downloads -- as well as the increased presence of discounters like Wal-Mart -- for their sharp decline.
--The ARTISTdirect Staff