Tower Records’ creditors seek sale
Music retailer restructures finances
March 16 2004
Tower Records has emerged from bankruptcy with its creditors owning 85 per cent of the company as it seeks a buyer.
The underperfoming US-based music retailer, which now operates just 95 stores after a series of store sales in recent years, has traded $80m in debt for the lion’s share of the equity in the business.
Tower emerged from bankruptcy 35 days after filing for a Chapter 11 reorganisation, having agreed the restructuring.
Tower founder Russ Solomon and his family have retained 15 per cent of the business, with the remainder controlled by a consortium of banks and finance houses including Barclays of the UK, and US firms Highland Capital Management, AIG Global Investment MW Post Advisory Group.
The retailer is being marketed for sale by Los Angeles investment banker Lloyd Greif, which has said that ‘many’ firms are interested. One potential buyer is said to be Sun Capital Partners, which last year bought the Musicland chain from US discount retailer Best Buy.
Tower has seen sales hit by the expanding CD sales of US discount chains, including Wal-Mart and Best Buy, as well as music downloads and cheap CD sales on the internet.
