Tower Records to seek bankruptcy protection
Entertainment retailer struggling with sales decline
February 5 2005
MTS Inc, parent company of entertainment retailer Tower Records, is planning to file for bankruptcy protection, according to reports.
News agency Reuters quoted ‘people familiar with the situation’ who said MTS would file for Chapter 11 protection in order to fend of creditors.
MTS has been seeking a buyer for the 100-store chain with little success. Tower has found sales squeezed in both the US and Europe by the growing share of CD and DVD sales taken by general merchandise retailers such as Wal-Mart and Tesco.
The popularity of online music downloads, a problem for all retailers, has also take its toll on sales.
Tower sold its UK stores last year and has also exited the Japanese market.
In its most recently published results, privately owned MTS said sales in the nine months to April 2003 fell 9 per cent to $429mi, with losses up 47 per cent to $36.3m.
