Tower Records Files for Bankruptcy

Is there really a different in this case though?

very much yes! it's not like the stores just shut down. and if another company buys them and keeps the brand intact while (hopefully) improving things, what's the diff? it's not like people just STOPPED shopping at k-mart because they declared chap. 11.

well, the sale at the loop store is just the $10 for everything $13. amongst a ton of meh, there were import copies of arthur russell's Calling Out of Context and Captain Beefheart's Unconditionally Guaranteed (both about $8, i think) in the clearance section way up on the 3rd floor. if interested, i left em right in front for ya. given the crappy crappy day, not really worth the walk.

as for the store itself, kinda sad. the music mags seemed to be a month or two behind. about 10 people in the store. counter help picking their finger nails...

I scored the Sandie Shaw box set at the Cambridge store for 30 bucks last week...talk about a steal (I should have been arrested for shoplifting)...they continue to be the only record store in the Boston area to stock The Shortwave Set...don't go, Tower...

from billboard:

September 23, 2006
RETAIL TRACK: OPENING ROUND
Bids After Deadline Could Prevent Brutal Tower Liquidation
BY ED CHRISTMAN

Just because a liquidator appears to be the only bid so far in the Chapter 11 auction of Tower Records doesn't mean the chain will be liquidated. Good thing, because for many in the industry, a Tower liquidation could be devastating. But to be sure, the fact that only a liquidator put in a bid can't be painted as good news either.

At press time (Sept. 12), one of the liquidators-like Gordon Brothers in Boston, Great American in Los Angeles or Hilco Organization in Northbrook, Ill.-was expected to be the only suitor in the opening round of bids for the West Sacramento, Calif.-based chain. This comes after months of Tower Records assuring the vendor community that a private-equity firm is on the verge of signing a letter of intent.

As one bidder pointed out to Retail Track, it's too early for them to show their hand and what they're willing to pay for the chain. Even though the formalized process has opening bids due by Sept. 12, and final offers with a signed asset purchase agreement due Sept. 26, the reality is that if a qualified bidder decides to forgo those two dates and shows up in court on the Oct. 5 auction date, he will be welcomed with open arms. Yeah, other qualified bidders would squawk, but there's no getting around that cash is king.

While it seemed like there was no potential shortage of bidders when Tower Records filed Chapter 11 on Aug. 20, at least three have indicated to Retail Track that they won't step up to the plate until Sept. 26, if then. That's because things have changed somewhat since Aug. 20 and their non-action is also intended to send a message to the major vendors.

Since Tower filed for Chapter 11, every newspaper in the land has painted music retail as being completely dead. So if you bid on the chain, you can count on all those papers calling you an idiot for buying a record store in this day and age. Needless to say, that imagery has been reinforced by SpiralFrog and the notion that brick-and-mortar stores will soon have to compete against free.

Even sophisticated institutional investors and private-equity firms would have second thoughts after that initial press onslaught. Meanwhile, the remaining vulture investors-who have thick skins and are seasoned in making money even in a diminishing marketplace-are likely holding back on bidding for Tower because they have to scare the product suppliers into remembering how much they need the deep inventory superstore chain.

When last heard from, the major suppliers-those secured creditors likely to get whatever's left over after the bank gets the $78 million it is projected to be owed on Oct. 8-were touting their trump card: namely, that they could sink any new owner by not supplying credit if they are unhappy with whatever recovery they get from the $82 million they claim to be owed.

With Tower's value declining every day and bidders trying to ensure that the price for the chain remains as low as possible, if the winning bid is only large enough to satisfy the bank's claim, the new owner will still absolutely need vendor support for the chain to become healthy. That's why it's in all the bidders' best interest to put a little fear in the heart of vendors. But not too much. Any new owner has to be one that the major suppliers are comfortable with, and one that will invest in the chain so it becomes financially viable. If that occurs, vendors could be induced to back down from their stance that they have a recovery that makes them happy.

Some vendors are already thinking along those lines. The independent community is collectively owed only about $15 million, and if nothing is recovered for unsecured creditors, some suppliers will likely be forced out of business. But if Tower is liquidated, the hurt will be even bigger, according to the head of one large independent distributor.

While Tower Records is not the largest account and has an estimated market share of only about 4%, it can account for about 30% of sales on rock records from new and developing artists, that executive says.

"For anybody in the indie rock business the possibility of a Tower liquidation has to be brutal," he says. "It would mean a completely different life for companies like us. It would cause us to rethink our staffing and how we market records."

Sure, the majors are more diversified, but even they appreciate the importance of Tower Records in developing rock records and roots music from up-and-coming bands. What's more, a Tower liquidation might put the classical music business on life support until the digital marketplace grows large enough to compensate.

So with stakes that high, count on all kinds of posturing and bluffing along the way until the nail-biting finale of the fate awaiting Tower is determined.

as for the store itself, kinda sad. the music mags seemed to be a month or two behind. about 10 people in the store. counter help picking their finger nails...

John is referring to the Tower store in downtown Chicago on Wabash. It IS really sad. They must be really feeling the strain, because as recently as six-seven years ago the store would be jampacked on a good day. Now, if there's just "10 people in the store" (scattered amongst the three floors), bro, that is a CROWD.

Interesting note: the building directory in the doorway STILL says "Rose Records" and "M&H(?) Distributors," even though Rose has been gone for over a decade and the distributor has probably been gone longer than that.

someone describe For Your Entertainment for me.. are they like the Sam Goody of the east and/or south or something?

that nile rodgers?

They are like the Sam Goody of Hell.

How the fuck is that possible? Hell is an infinite concept. Are yu saying that FYE does the eating of the babies behind the clerk desks there or something?

I'm saying that when you go into FYE! they force babies down your throat (this is the important bit) REGARDLESS OF WHETHER YOU'VE ALREADY EATEN OR NOT. Shopping there is the music consumer equivalent of being a foie gras duck.

Alternately, take everything you dislike about Sam Goody and then imagine it all happening while Newt Gingrich is rubbing olive oil on his nipples and singing "Touch Me (I Want Your Body)" to you. Also imagine the stench of rotting ham pervading the entire scene.

That is what shopping at FYE! is like.

I love you both.

This does suck for record shops in general but haven't been in a Tower for years, going to have to check it out this week though.

I love FYE. At the FYE in the Gallery they are always playing salsa and reggateon. It almost makes me do a double-take. Perhaps I shouldn't love them since they are probably just corporate scum, but I really do love going into that store. The prices are crazy though. I don't think I'd actually buy anything there.

They were even playing NG2's one good song one day. Who has even heard of NG2?

(Their second good song I mean. This was before the new album I haven't heard.)

Dan Perry, you should visit FYE in the Gallery in Philadelphia.

R.I.P. Cherry Creek Tower Records in Denver.

http://art.towerrecords.com/stores_new/denver.jpg

so when do the warehouse-style markdowns go into effect?

the bone-picking commences tomorrow in some stores according to a quick NPR news item I heard today. RIP...open open open

Hmmm...there IS a Tower in Costa Mesa still.

The FYE in Faneuil Hall is a little like an open ass sore.

I must have passed by there when I visited in April since I was at the Hall. No anal sore smells though. Perhaps I had a cold.

Sale starts today. Anyone know what kind of discounts they're starting with?

10% off in harvard square, cambridge MA today. Expect that'll go bigger.

10% here (northern cali) too.

we should keep a watch on this thread

Indeed so.

email me when import electronica hits 50% off

Sweet, assuming the one in Memphis is still open.

10% at Tower in Seattle/Lower Queen Anne... but the main steals are in the bargain bins.. lots of import CDs and CD singles for $2 each and up.

Actually, I hadn't noticed this -- the reason for the liquidation is because FYE did *not* in fact make the winning bid.

So no eating of the babies?

Yea, 10 % off 18.99 list price cds ain't so great, but there are some cheaper ones. Books are 20 % off and magazines 30 % off I believe.

Yeah, I was just gonna say, R.I.P. $18.99 CDs. And good riddance.

10% per week is what i heard. sounds dubious.

10% off? I'm not going anywhere for 10% off!

It's just like the Wherehouse's slow demise. I'll check in at the Costa Mesa store in a couple of weeks.

What record should be my final Tower purchase? I'm probably not gonna bother taking advantage of any kind of sale -- I've never been that kind of record-buyer.

First Tower purchases: Big Star, #1 Record/Radio City CD; Aaron Neville, Tell It Like It Is LP; the Nonesuch Javanese Court Gamelan LP.

Oh man, I should probably go back to the Roosevelt, NY store for the optimum full-circle experience.

Yeah! The Wherehouse! Man, they were there and all of a sudden they were gone! Where's the justice? *weeps at the thought of cheap CDs*

I enjoyed ransacking a Sam Goody when they were about to go under - I actually managed to get Ta Det Lungt and Less Than Human for cheap.

i was at the tower on market in SF today and i overheard a worker saying that they will continually reduce prices until it all sells and the target for the end is 6-8 weeks. (so, no new info to report)

the pricing in that store is bizarre too. recently i picked up a few of prince's back catalog titles for $10 at the same store and then today i had a dig through the clearance bins and there was little under $10 unless it was complete dreck. there were a few treats though, but nothing i didn't already have. (i saw the last villalobos album, the melchior productions double cd, the glimmers comp that opens with queen's "body language" and the first get physical mix cd all for $10.99. vinyl of the last royksopp for $9 which is a decent deal.)

how they justified selling moderately rare import stuff for $26 and up in the age of the internet is beyond me. virgin does this too and it's just insulting. maybe they're next.

The only thing Tower did very well unlike others was classical and jazz. Until there are Amoeba's everywhere (which doesn't seem to be the plan in the short term), being able to walk in and view a gigantic selection of classical will be a thing of the past. :(

(Of course, it's these section I'll be vigiland about in the next month.)

i used to love the soundtrack room in the stores that had separate rooms for jazz/classical/soundtracks. i don't know how prevalent those stores were though.

Yeah, actually the Broadway Tower did have quite a good jazz section for a while there, and they'd sometimes have reasonable deals on certain CDs.

the only good shit left in the clearance bin at my local tower is a copy of "chicago boogie" (the classic house comp on eskimo) for about $10 and a copy of the lindstrom album on eskimo for $7.

my list for when it goes out of business: three tangerine dream reissues, two klaus schulze reissues, "cluster ii", "get physical vol 2" and the chelonis r jones album.

tower was PACKED full of people tonight, i was like WTF?!? people lining up to buy $16.99 albums for 10% off, yeah, it's fucking nuts! you can get shit cheaper at borders!

Some stuff will just stay for a bit, I'm patient -- those early rushers are just deluding themselves.

*crosses fingers*