Los Angeles- Tower Records filed for bankruptcy for the second time in three years, fueling speculation that the music store might have to liquidate its stock and close the chain, including its legendary Sunset Strip store.
“That’s kind of a bummer ’cause that was the place to go to get imports and of course all the books and magazines,” said longtime KROQ-FM (106.7) disc jockey Rodney Bingenheimer.
Tower officials denied plans to close any of its 89 stores.
“At the present time we have no plans to close any stores,” spokeswoman Lisa Amore said. “We went into Chapter 11 to make the business and the store attractive to a buyer and it is our great intention to keep the name and the brand going.”
Tower is slated to go before the bankruptcy court today, according to wire reports. Its revenue fell to $430 million for the fiscal year ending July 31 from $476.1 million a year ago.
Amore declined to say whether Internet sales and big-box retailers had hurt Tower’s market share, but court papers indicate that is true. Legal digital downloads grew 200 percent in 2005 while album sales fell 7.8 percent, according to Nielsen SoundScan data cited in court filings.
Tower was listed as the ninth-largest seller of physical music in 2002, according to data compiled by NPD Group. But in the first six months of 2006, Tower was tied for 12th.
The Sunset store was an early chain, opening in 1970 after shops in San Francisco and Sacramento, where the company is based. Fans sought out the Sunset Tower, a fixture of the Sunset Strip, for its stock of hard-to-find imports, broad selection, and frequent in-store appearances by popular bands.
In its heyday in the 1970s and early ’80s, the Sunset Tower attracted throngs of music fans for record release parties, with bands jamming on the rooftop. Scores of musicians such as Adam Ant and the Go-Go’s played there or signed records, said Bingenheimer, who introduced though his radio show dozens of music artists. His shoulder-rubbing with many of those same musicians was chronicled in the 2003 biographic film “Mayor of the Sunset Strip.”
The store still stages release parties and has hosted Prince and Weezer in recent years.
Given its waning popularity, industry observers say, the chain could have a tough time finding a buyer willing to keep its stores operating in an industry increasingly dominated by online music purveyors and big-box retailers.
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.
Los Angeles rock historian Harvey Kubernik was saddened, but not surprised, by that possibility.
“My life is a series of record shops closing,” said Kubernik, author of “This is Rebel Music.” “I’m unfortunately used to this. I don’t sit shiva for Tower Records.”