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.

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