Musicland Cuts Retail Footprint in Half1 Feb, 2006 By: Erik G., Kurt I.
Bankrupt Musicland Holding Corp., operators of Sam Goody and Suncoast and Media Play stores, announced it will shutter 341 stores, cutting its national footprint in half. The move leaves 191 Sam Goody stores and 209 Suncoast stores operating in 49 states.
The Minnetonka, Minn.-based media retail chain, which at one time operated 800 stores, filed Chapter 11 bankruptcy Jan. 12 and closed all 61 Media Play retail outlets.
“Closing these stores was a difficult, but necessary decision to protect the future of this company,” said Musicland president and CEO Michael Madden. “The store closing list is based on a number of factors, including store profits and the terms of the leases at each location. As we move forward in the restructuring process, this action will allow us to focus our resources on those four hundred stores that have stronger prospects for future growth.”
An industry source said the Musicland bankruptcy is going to “change the landscape” of the home entertainment business. He said it is just a matter of time before “the other shoes begin dropping” on smaller unsecured suppliers that dealt directly with Musicland and may never see a dime.
“It will likely force some to file for their own bankruptcy,” said one source, who declined to be identified.