Er.
This Makes me Unhappy:
Tower Records files for bankruptcy again By Chris Morris
Tue Aug 22, 5:23 AM ET
LOS ANGELES (Hollywood Reporter) - Tower Records filed for Chapter 11 bankruptcy protection for the second time in two years Monday, weeks after word surfaced that the iconic music retailer had been cut off by major suppliers for failing to pay its bills.
MTS Inc., the corporate parent of the 89-store chain based in West Sacramento, Calif., said in court papers that it aimed to keep Tower up and running as a "going concern" while a new owner is sought.
Many in the industry had feared that, given the severity of Tower's situation, a Chapter 7 liquidation could be in the offing. The possibility still exists that the company's assets could be sold off piecemeal if a buyer can't be located.
As the biggest and one of the last free-standing, deep-catalog music retailers -- with Virgin Entertainment's 20 stores as its closest competition -- Tower occupies an important position in the world of brick-and-mortar sales. Its flagship store is a landmark on Los Angeles' Sunset Strip, but it no longer draws crowds.
The company acknowledged in its filing, in U.S. Bankruptcy Court in Delaware, that its same-store sales declined 9% during the past year. It cited the industrywide slump and "intense competition" from legal and illegal downloading, as well as from "big-box" retailers, such as Best Buy and Wal-Mart, which sell music as a loss leader.
In 2004, the company underwent a prepackaged Chapter 11 filing in which bondholders assumed control of 85% of the debt-wracked firm. The family of founder Russ Solomon continues to hold 15% of MTS.
As a result of the current filing, the company will now receive $85 million in debtor-in-possession financing from its primary lender CIT Group.
Tower said it had negotiated delivery terms with its principal suppliers to assure a flow of fresh product into its stores. Recently installed CEO Joseph D'Amico said: "The trade has always supported Tower through difficult times, and we recognize that their support is imperative to the consummation of a transaction."
Subject to court approval, Tower will attempt to finalize a sale of the chain -- which hired Los Angeles-based Houlihan Lokey Howard & Zukin as its sales agent in March -- within 60 days.
The clock is ticking: The filing noted that Tower is scheduled to make the next payment on its revolving credit facility in mid-December. The document stated: "Without a restructuring or the sale of substantial assets, it is unlikely that the debtors will have sufficient liquidity to pay the portion of the CIT facility that becomes due on December 15."
The year's fourth quarter, in which record chains traditionally do the majority of their business, also is looming. D'Amico said, "Tower Records has conducted an extensive sales process, and this step will allow buyers to complete a sale in time for the holiday season while maximizing the value for stakeholders."
Sources said that a sale of the company to a consortium of unknown equity firms fell through in the days before Tower's current fiscal crisis became public knowledge.
"We're praying they'll reorganize successfully," one veteran music executive said. "We're praying they'll come back to life. Do I feel they're going to do it? Yes. Tower's enough of a brand, they can come back."
The executive added that the dissolution of Tower could have a dire impact on the public's perception of music retailing: "Can you imagine Tower Records with boards on the windows on Sunset Boulevard? It'd be horrifying."
"Everybody's rooting for them," a longtime sales executive said. "We all need as an industry for people like Tower to be around."
The list of potential buyers for Tower is a short one. Beyond equity firms, the likeliest purchaser might be Trans World Entertainment, a largely mall-based chain that operates more than 900 stores out of Albany, N.Y.
One observer believed that Trans World, which specializes in buying troubled chains' outlets at fire-sale prices, could swoop in "at the right price. . . . Trans World tends to wait until the right time to pick up these accounts. They're very smart and very astute people
As Does this . . .
Sci Fi closes 'Stargate SG-1'
Show has run 10 years; studio hoping to continue franchise
Tuesday, August 22, 2006; Posted: 8:47 a.m. EDT (12:47 GMT)
What Is This? LOS ANGELES, California (Hollywood Reporter) -- Sci Fi Channel is grounding "Stargate SG-1," the longest-running science-fiction series on U.S. television to date.
The cable network has decided not to order additional episodes beyond the show's current 10th season, but it has picked up a fourth season of its more-popular spinoff, "Stargate Atlantis."
"Stargate SG-1," based on the 1994 movie starring Kurt Russell and James Spader, spent its first five years on Showtime -- which annoyed the show's producers by demanding full-frontal nudity -- before migrating to Sci Fi. Its 200th episode aired last Friday.
"Having achieved so much over the course of the past 10 years, Sci Fi believes that the time is right to make this season their last on the channel," Sci Fi said.
The show's ratings have softened in recent years and series star Richard Dean Anderson left last season, but it boasts a strong fan base, with as many as nine official conventions taking place worldwide every year. Producer MGM is exploring the possibility of taking the series to yet another outlet.
"MGM has tremendous amount of confidence in 'Stargate,' and we are vigorously working to continue the franchise," studio spokesman Jeff Pryor said.
The final three episodes of "Stargate SG-1" are slated to air on Sci Fi Channel next year. Both "Stargate SG-1" and "Atlantis" also run in syndication.
Tower Records files for bankruptcy again By Chris Morris
Tue Aug 22, 5:23 AM ET
LOS ANGELES (Hollywood Reporter) - Tower Records filed for Chapter 11 bankruptcy protection for the second time in two years Monday, weeks after word surfaced that the iconic music retailer had been cut off by major suppliers for failing to pay its bills.
MTS Inc., the corporate parent of the 89-store chain based in West Sacramento, Calif., said in court papers that it aimed to keep Tower up and running as a "going concern" while a new owner is sought.
Many in the industry had feared that, given the severity of Tower's situation, a Chapter 7 liquidation could be in the offing. The possibility still exists that the company's assets could be sold off piecemeal if a buyer can't be located.
As the biggest and one of the last free-standing, deep-catalog music retailers -- with Virgin Entertainment's 20 stores as its closest competition -- Tower occupies an important position in the world of brick-and-mortar sales. Its flagship store is a landmark on Los Angeles' Sunset Strip, but it no longer draws crowds.
The company acknowledged in its filing, in U.S. Bankruptcy Court in Delaware, that its same-store sales declined 9% during the past year. It cited the industrywide slump and "intense competition" from legal and illegal downloading, as well as from "big-box" retailers, such as Best Buy and Wal-Mart, which sell music as a loss leader.
In 2004, the company underwent a prepackaged Chapter 11 filing in which bondholders assumed control of 85% of the debt-wracked firm. The family of founder Russ Solomon continues to hold 15% of MTS.
As a result of the current filing, the company will now receive $85 million in debtor-in-possession financing from its primary lender CIT Group.
Tower said it had negotiated delivery terms with its principal suppliers to assure a flow of fresh product into its stores. Recently installed CEO Joseph D'Amico said: "The trade has always supported Tower through difficult times, and we recognize that their support is imperative to the consummation of a transaction."
Subject to court approval, Tower will attempt to finalize a sale of the chain -- which hired Los Angeles-based Houlihan Lokey Howard & Zukin as its sales agent in March -- within 60 days.
The clock is ticking: The filing noted that Tower is scheduled to make the next payment on its revolving credit facility in mid-December. The document stated: "Without a restructuring or the sale of substantial assets, it is unlikely that the debtors will have sufficient liquidity to pay the portion of the CIT facility that becomes due on December 15."
The year's fourth quarter, in which record chains traditionally do the majority of their business, also is looming. D'Amico said, "Tower Records has conducted an extensive sales process, and this step will allow buyers to complete a sale in time for the holiday season while maximizing the value for stakeholders."
Sources said that a sale of the company to a consortium of unknown equity firms fell through in the days before Tower's current fiscal crisis became public knowledge.
"We're praying they'll reorganize successfully," one veteran music executive said. "We're praying they'll come back to life. Do I feel they're going to do it? Yes. Tower's enough of a brand, they can come back."
The executive added that the dissolution of Tower could have a dire impact on the public's perception of music retailing: "Can you imagine Tower Records with boards on the windows on Sunset Boulevard? It'd be horrifying."
"Everybody's rooting for them," a longtime sales executive said. "We all need as an industry for people like Tower to be around."
The list of potential buyers for Tower is a short one. Beyond equity firms, the likeliest purchaser might be Trans World Entertainment, a largely mall-based chain that operates more than 900 stores out of Albany, N.Y.
One observer believed that Trans World, which specializes in buying troubled chains' outlets at fire-sale prices, could swoop in "at the right price. . . . Trans World tends to wait until the right time to pick up these accounts. They're very smart and very astute people
As Does this . . .
Sci Fi closes 'Stargate SG-1'
Show has run 10 years; studio hoping to continue franchise
Tuesday, August 22, 2006; Posted: 8:47 a.m. EDT (12:47 GMT)
What Is This? LOS ANGELES, California (Hollywood Reporter) -- Sci Fi Channel is grounding "Stargate SG-1," the longest-running science-fiction series on U.S. television to date.
The cable network has decided not to order additional episodes beyond the show's current 10th season, but it has picked up a fourth season of its more-popular spinoff, "Stargate Atlantis."
"Stargate SG-1," based on the 1994 movie starring Kurt Russell and James Spader, spent its first five years on Showtime -- which annoyed the show's producers by demanding full-frontal nudity -- before migrating to Sci Fi. Its 200th episode aired last Friday.
"Having achieved so much over the course of the past 10 years, Sci Fi believes that the time is right to make this season their last on the channel," Sci Fi said.
The show's ratings have softened in recent years and series star Richard Dean Anderson left last season, but it boasts a strong fan base, with as many as nine official conventions taking place worldwide every year. Producer MGM is exploring the possibility of taking the series to yet another outlet.
"MGM has tremendous amount of confidence in 'Stargate,' and we are vigorously working to continue the franchise," studio spokesman Jeff Pryor said.
The final three episodes of "Stargate SG-1" are slated to air on Sci Fi Channel next year. Both "Stargate SG-1" and "Atlantis" also run in syndication.