Tweeter Files for Bankruptcy11 Jun, 2007 By: Erik Gruenwedel
Tweeter Home Entertainment Group Inc. June 11 announced it has filed for financial reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Last month, the financially troubled Canton, Mass.-based high-end consumer electronics retailer warned it didn't have sufficient working capital to fund its short-term financial needs and without securing additional funds would file for bankruptcy.
To maintain day-to-day operations, including payroll and merchandise purchases, the retail chain announced it had secured a $60 million debtor-in-possession credit facility from General Electric Capital Corp.
Tweeter had reported $1.9 million in available cash with liabilities exceeding $95 million. It had just $12 million in available cash from a previous revolving $75 million credit facility.
“After considering a wide range of alternatives, it became clear that this course of action was a necessary and responsible step toward preserving Tweeter's viability as we address our financial challenges and work to secure our future,” said Joe McGuire, president and CEO of Tweeter. “I am confident that ... we will emerge from this process as a stronger, more competitive organization that is well-positioned to respond to and succeed in the ever-changing consumer electronics industry.”
For the second quarter (ended March 31), Tweeter posted losses of $35.2 million on revenues of $163.2 million, compared to income of $424,000 and restated revenues of $186.8 million during the same period last year. Same-store sales dropped 13%.
The company operates 130 stores under the Tweeter, HiFi Buys, Sound Advice and Showcase Home Entertainment brands primarily in New England, the Mid-Atlantic, Chicago, the Southeast (including Florida), Texas, Phoenix and Las Vegas.