From the archives: Tower Records bankruptcy expected
Tower Record store at Old Country Road, Carle Place. (Feb. 5,2004) Credit: Newsday Photo/Daniel Goodrich
This story was originally published in Newsday on February 6, 2004.
It was billed as the world's largest record store when it opened on Broadway and East Fourth Street in Manhattan in 1983, 25,000 square feet of every kind of music imaginable.
Tower Records is still there, but around the corner is Barnes & Noble, with its books, music and coffee. A subway stop away is Circuit City, with electronics and music, and nearby is Virgin Megastore, a flashier version of Tower.
An icon in the music industry since it first opened in Sacramento, Calif., in 1960, Tower, owned by MTS Inc., last year said it was up for sale, surrendering to the combined forces of larger discount retailers, slumping record sales and online music downloading.
Yesterday, Reuters reported the chain of nearly 100 stores - with three in Manhattan and three on Long Island - would probably file for Chapter 11 bankruptcy protection within a week. But a source close to the company disputed portions of that story, saying that an announcement from the company, which could include a possible sale or bankruptcy filing, would happen "soon."
Nowadays, the Greenwich Village store still draws a crowd, such as the hundreds who lined up last year for Madonna's in-store performance promoting a new album, the first such appearance in her career. But being an icon isn't enough these days.
"An independent record store like Tower Records, it had a hard time competing. It couldn't compete against price discounters, and it couldn't compete against downloads, which were free," said Colin McGranahan, an analyst with Sanford C. Bernstein, an investment research and management firm.
Tower's troubles mirror those of other music chains, such as those of the Musicland Group, the chain of 1,100 stores, including Sam Goody, that Best Buy sold to a Florida company in June.
When Tower's Greenwich Village store opened more than 20 years ago, it was the first East Coast location for the chain, which even now has about half its stores in California. That includes the famous Tower Sunset on Sunset Boulevard in Los Angeles, whose early clientele included Elton John and Jack Nicholson.
The stores were the place to be for those who grew up in the 1960s and '70s, said Mick Martin, a lifelong Sacramento resident who worked at Tower from 1967 to 1969.
"When you wanted to hear what music was new, you went down to Tower," said Martin, an author, musician and radio show host. "People would just go down to Tower and hang out. It was almost a coffee-shop concept without the coffee."
But now, stores like Borders and Barnes & Noble offer the coffee along with music and books. Discount chains, such as Wal-Mart and Target, sell CDs. Electronic and appliance outlets like Best Buy and Circuit City sell discounted music at a loss to draw people in to buy TVs or DVD players.
Likewise, Amazon.com and other Web sites offer the convenience of shopping from home, not to mention people can download music for free, often illegally, on file-sharing networks or use legal programs.
"I don't think [Tower] stayed competitive. They're not customer-friendly, the way they operate," said Norm Kang, 43, a law firm office manager from Westchester who was shopping in Manhattan Mall yesterday.
Staff writer Rose French contributed to this story.
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