Tower Records Ceasing Operations6 Oct, 2006 By: Erik Gruenwedel
Inventory liquidator Great American Group, whose benchmark bid for bankrupt Tower Records and Video foreshadowed the venerable music retailer's demise, was reportedly declared the winner Oct. 6 by a bankruptcy judge. Great American bid $134 million, topping an unknown bid from previous favorite Trans World Entertainment.
Woodland Hills, Calif.-based Great American is slated to begin going-out-of-business sales over the next 10 weeks at most Tower locations beginning Oct. 7, according to a report by the Sacramento Bee.
The sale apparently does not include online asset Tower.com.
Forty-five-year-old Tower, with 89 stores, filed for bankruptcy for the second time Aug. 20, listing debts and assets in excess of $100 million each.
“I am deeply saddened to report to you that after a very significant 29-hour effort, Great American has outbid [Trans World] at the auction,” Tower interim CEO Joseph D'Amico said in a note to employees reported by the Bee. “My heart goes out to each of you, who have poured your hearts and souls into this great company.”
Great American emerged triumphant following a two-day auction among 16 bidders that began Oct. 5 at Tower's law firm in Wilmington, Del. Top contender Chicago-based investment firm Radius Equity Partners soon pulled out of the bidding after failing to secure $120 million in funding after an all-night effort.
“We couldn't pull everything together [financially] in the five-week period,” said Stuart Jamieson, managing director of Radius. “It's been a bad day.”