Tower Records stops paying their bills; Retailers stop CD shipments

[Human Torch]

Report: CD companies stop shipments to Tower
Silicon Valley/San Jose Business Journal - 2:41 PM PDT Friday

http://www.bizjournals.com/sanjose/stories/2006/07/31/daily86.html?f=et79&hbx=e_du

Just days after iconic music retailer Tower Records named a new CEO and confirmed that the retail chain is for sale, three major suppliers of recorded music have halted shipments to the company because it has stopped paying its bills, according to published reports Friday.

The Los Angeles Times cited unnamed sources at Universal Music Group, Warner Music Group Corp. and EMI Group as saying they had stopped supplying West Sacramento-based Tower. A fourth major supplier, Sony BMG Music Entertainment, also has cut off Tower, the newspaper reported, based on reports by unnamed industry sources. Neither a Tower spokesperson nor interim CEO Joseph D'Amico, a turnaround specialist based in Chicago, could be reached for comment on the report.

Sources reportedly told the Times that Tower told the music suppliers this week that it would no longer pay its bills. It would be the latest in a series of financial difficulties for Tower and parent company MTS Inc., founded in 1960 in Sacramento by Russ Solomon.

It rapidly expanded in the 1990s but was in trouble and scaling back by early this decade, selling its profitable Japanese stores, cutting its locally produced magazines among other steps. It fell behind on debt payments and wound up reorganizing in 2004 through Chapter 11 bankruptcy in a structured deal that left it largely in the hands of its creditors, with the Solomon family retaining a 15 percent stake.

[msongs]

1. we practically lived at the tower sunset strip years ago - it was the best

megastore (well it was the only megastore) with the biggest selection of cheap and varied vinyl records. Great prices, lots of obscure stuff, cutouts, and celebrities who stood in line like the rest of us and even talked to us.

Msongs
www.msongs.com/2007politicalcalendars.htm

[Warpy]

2. I practically lived in the one in Boston

Well, that and Newbury Comics, both good sources for the weird stuff I favor. I still order online because the weird stuff I favor generally doesn't make it out to NM, although one college station plays it for 3 hours a week.

I hope they can manage to hang on.

[BrotherBuzz]

3. We practically lived at the original Tower in Sacramento

Tower records fall is not unexpected news, but we will still have the Tower theater (albeit busted up into multiplex crap), Tower market, Tower liquor, and Tower Cafe (they make a wicked chocolate cake called 911- it's 'to die for') to carry the wonderful neighborhood.

Sad to see Tower record fall on had times, but they had a good run nevertheless.

[mcscajun]

4. I suppose it was inevitable, but I'll be sad to see it go.

What with the success of Amazon.com, the decline of CDs and the rise of downloadable music, a music superstore didn't really stand a chance.