Tower Records Liquidation Starts
October 9, 2006 at 6:02 AM (PT)
The end is near for TOWER RECORDS after GREAT AMERICAN GROUP won an auction for the bankrupt music retailer and immediately launched a total inventory liquidation.
GREAT AMERICAN, which will shut all 89 domestic TOWER stores within 8 to 10 weeks, won the bidding by $500,000 over TRANS WORLD ENTERTAINMENT, which planned to keep many of the stores in operation and unsuccessfully argued, with the major music labels, that the difference in bids was insignificant compared to the longterm value to creditors of keeping the stores open. The shutdown will eliminate about 2,700 jobs.
TOWER's retail lease rights to others have been sold to a pair of real estate firms, the landmark SUNSET STRIP store in WEST HOLLYWOOD has been sold to another real estate firm for $12 million, and the rights to the company name and web site went to NORTON LLC. Overseas franchise rights were not sold in the auction.