Tower Records Liquidated
Great American beat out Trans World Entertainment, which stated that it intended to continue operating at least some Tower stores, with a single bid increment of $500,000. Trans World, which operates approximately 1100 stores, almost all of them in shopping malls, has recently acquired other music retailers, including Sam Goody and Wherehouse Music, and has consolidated most of them under the name FYE, which stands for For Your Entertainment.
In an appeal to bankruptcy judge Brendan Shannon, an attorney representing Tower's secured trade creditors asked that he consider the closeness of the bids and the effect that liquidation would have before approving the sale. "Sometimes, the highest bid is not the best bid," said lawyer Michael Bloom.
Tim Pohl, an attorney representing Trans World, echoed that sentiment, asking if $500,000 was "material enough" to make liquidation preferable to keeping thousands of people employed.
Noting that it was a hard decision, Justice Shannon observed that Tower's debtors and other parties all agreed the bidding process was fair and represented good faith.
Going out of business sales began at Tower outlets on Saturday, October 7. Great American says it plans closing several dozen Tower stores, but hasn't said how many of the 87 Tower outlets it intends to continue operating.
Does the (apparent) death of a retail record chain have an impact on audiophiles? The president of a label that specializes in contemporary American classical music agreed. "We don't sell pop music quantities of any releases," he said. "However, the tens and twenties of records we sold in each of Tower's classical outlets are going to be sales that we have almost no other way of realizing—and that's the difference between almost staying in business and going out of business. The loss of Tower will be felt most intensely by the labels most seriously serving the engaged music lover."
Chesky Records' David Chesky agrees. Chesky opined that Tower's demise was a sad day for independent and specialty record labels. "Independents live and die by Tower Records," Chesky said. "Even with competition from online and other retailers, Tower had a huge audience that liked what independents offered. For music lovers, it's the end of an era."