The iconic Tower Records is preparing to close its doors forever in Los Angeles and around the country in the continuing systematic shift of the music industry from high-priced music stores like Tower Records, Wherehouse Music and Sam Goody to online sales and large discount stores. With posters and banners proclaiming "Everything Must Go" and "Sale on Everything," 89 Tower Records stores are being liquidated as the result of a bankruptcy buy-out. On Aug.
30, the company declared its second bankruptcy in two years and was sold to a Woodland Hills-based liquidation firm in an Oct. 6 auction that involved multiple bidders. The Great American Group bought Tower Records for $134.
3 million and the next day started to dismantle all 89 stores of the West Sacramento-based record store chain. About 2,700 Tower Records employees will lose their jobs. The liquidation sales, which include store merchandise and equipment, started at 20 percent and will escalate weekly by 5 percent to a mid-December crescendo.
Tower Records attributes its financial problems to an overall decline in music sales, increase in online music sales, and the tough competition from discount stores such as Wal-Mart and Best Buy. The company has struggled financially for about 10 years and owes creditors about $200 million, according to the Great American Group. "It's almost like the death of a generation," said Bo Fannon, a Northridge automotive technician by day and music manager by night.
On a sunny Sunday afternoon, Fannon came to stock up on some 1970s-era rock music, but left empty-handed because he had expected to get a better deal than the 20 percent sale. "I'm going to Wal-Mart," Fannon said. "Their selection is not as good but the prices are better.
" Even with a 20 percent discount, many CDs at Tower Records are still priced above the main competitors. Because the big retailers carry mostly Top-25 mainstream artists and can sell large quantities of a title, they are able to negotiate favorable deals with distributors.
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