Tower.com Sold for $4.2M22 Mar, 2007 By: Erik Gruenwedel
Tower Records, the shuttered 40-year music retail icon that couldn't overcome industry trends favoring music downloads over CDs, ironically lives on as an online venture — for now.
Caiman Holdings Inc., headquartered in the British Virgin Islands, emerged the apparent winner with a $4.2 million bid for Tower.com, which includes rights to the Tower name, according to a filing Monday with the U.S. Bankruptcy Court in Wilmington, Del.
The West Sacramento, Calif.-based music retail chain declared bankruptcy last year and shuttered operations in December following an asset liquidation sale.
Caiman — an independent distributor of music and video — was among six bidders for Tower's online venture, which included Amazon.com. The company assumes all trademarks and licenses associated with Tower March 23.
Tower.com has continued to operate on a limited scale, according to The Sacramento Bee.
The funds will be given to Tower's creditors.
The rights to Tower.com originally acquired for $3.8 million by Norton LLC, a San Francisco-based operator of vintage rock ‘n' roll music sites, fell through when Norton realized the transaction did not include transfer rights to the site's customer list, according to a filing.
About 142 Tower stores continue to operate independently in seven countries.
Michael Dreese, co-founder of Newbury Comics, a New England-based retail chain, said Caiman is one of the biggest sellers of music CDs and movie DVDs on Amazon.
“They are the largest third-party seller on the Amazon platform,” said Dreese.
He also noted that Caiman has earned a reputation as grey market importer, which often involves distributing product beyond regional coding, thereby rendering it unplayable on many players.
Dreese said the issue of grey market movies and music on Amazon, eBay and other sites has been significant and he lauded Amazon's efforts at eliminating the problem among its DVD offerings.
A representative from Caiman was not immediately available for comment.