Tower Records files for bankruptcy

“Tower Records has filed for Chapter 11 bankruptcy protection from its creditors, its second such filing in less than three years,” The Associated press reports. “The company, which operates 89 stores in 20 states, sought bankruptcy protection Sunday to sell its assets through a court-supervised auction.”

“The company admits “intense” competition has hurt its business and that of other music retailers,” AP reports. “‘The brick-and-mortar specialty music retail industry has suffered substantial deterioration recently,’ Tower said in court papers… Phil Leigh, a senior analyst for Inside Digital Media Inc., said the Tower brand has value and will find a buyer, but its stores aren’t likely to survive this latest bankruptcy. ‘I think they’ll sell off the name and liquidate the inventory,’ Leigh said.”

AP reports, “Legal music download retailers like Apple Computer Inc.’s iTunes have played a major role in displacing traditional retailers. Nielsen SoundScan data, cited by Tower in bankruptcy-court filings, said legal digital downloads grew 200 percent in 2005 while album sales fell 7.8 percent.”

Full article here.

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NPD: Apple’s iTunes Music Store now the 7th largest U.S. music retailer, up from 14th last year – November 21, 2005

38 Comments

  1. “Legal music download retailers like Apple Computer Inc.’s iTunes have played a major role in displacing traditional retailers. Nielsen SoundScan data, cited by Tower in bankruptcy-court filings, said legal digital downloads grew 200 percent in 2005 while album sales fell 7.8 percent.”

    Somehow I doubt that any other digital retailer </i>like,/i> Apple Computer Inc.’s iTunes played any kind of significant role in this scenario.

  2. I stopped buying from them because their CD’s were always overpriced not because of iTunes. I could purchase from Newbury Comics for a heck of a lot less than the prices they maintained.

  3. MORE BLOOD ON THE iPOD CLICK WHEEL!!

    Tower Records down, now for Sam Goody!!!

    Any fool in his right mind gets a computer and downloads songs ala cart instead of paying over $20 for a cd with a few good songs on it.

    Heck even my friends ask me to buy and burn for them.

  4. This has been inevitable for a while now. Tower has been closing many stores for years. Sigh. I created Tower’s first website back in the early-mid 90’s. And I used to shop there long before that. But I started buying CDs from CDNow.com and then Amazon.com starting almost that long ago, for reasons of both price and convenience.

  5. Blaming Apple? Sounds like they are looking for someone else to blame for their own mismanagement.

    The stand alone music store where customers have to drive up and get out of their cars just to look for music CD’s is long over. People don’t drive to a store just to buy a music CD. If you want to have a brick-and-mortar music business you HAVE to locate the stores in malls.

    Apple stores would have never survived if they were stand-alone stores, and they ARE the type of store people will drive to.

    Yes, Tower Records has some mall stores but too many are too big and too hard to get to.

  6. Instead of retyping, I’d like to quote my reply to BustingTheSkullsOfidiots comment: “Digital music is going to kill CDs the same way that HTML killed books — that is to say, not at all.”

    —————————————————
    I say:

    Listening to downloaded music is exactly the same as listening to CDs. The one exception is lower download sound quality, which is indistinguishable to most people. Soon we may have lossless which will change that. Since downloaded music can be burned to CD, downloaded music can be listened to in the exact same manner as a CD. Therefore, nothing else changes from CD to downloaded music except that it’s usually cheaper, I can buy it how I want and I can go get a song right now and have it in about a minute.

    On the other hand, HTML and digital books require an entirely new way of viewing text. It is not handled in near the same manner as a physical book. Not to mention that many people claim reading digital media is more strain on the eyes than text on paper.

    Just the same, HTML does not replace books – it is more likely to replace magazines, occupational journals, and newspapers, which it slowly is. More importantly, there has already been a decline in CD sales and iTunes has passed many CD retailers in sales.

  7. Sam Goody is half dead already. Sister chain Suncoast has all but bit the dust.

    Really, the day of the record store is over. iTMS is only one of the things killing it, and not even the most important one. Wal-Mart and Best Buy are the go-to places to get music and videos these days.

  8. I’d be willing to bet that stores like Target, Best Buy, and Wal-Mart had more to do with Tower’s demise than iTMS. Tower was always ridiculously expensive. $19.99 for a single album? Why would I pay that when Target and Best Buy sell it for $12.99? Frankly I’m surprised they were able to stay afloat this long.

  9. I’m saddened to hear this news. I have a good sized CD library, much of which was purchased at Tower Records over the course of many years. Yes, it was costly in the long run. But I did immensely enjoy the very real tactile intimacy of the shopping experience each and every time. There was nothing virtual about it. I’ll miss Tower. A chance to spend several hours shopping at Tower Records was a great reason for me to drive a hundred miles out of the mountains into the city every couple of months. And after shopping? There’s nothing quite so delightful as popping open a shimmering stack of exciting new records and pouring over the liner notes while savoring a wonderful meal at a neighboring deli. Yum and .. yum again. ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

    The blame? P2P, of course. It radically devalued the music product. That part is very discomforting to me.

  10. It’s not iTunes, or WallMart or any other retailer that’s killing off the record stores like Tower-

    It’s illegal downloads. Even many people I know that I consider smart with integrity often don’t see much wrong in downloading songs they didn’t pay for.

    Everyone want to be paid for the work they do, but I guess if it’s musician’s and the music industry who cares!

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