WEST SACRAMENTO, CA: Tower Records' parent company, MTS Inc., has hired Sitrick & Company to help it maneuver through last week's Chapter 11 bankruptcy filing.
Tower Records, founded in 1960 and one of the largest specialty retailers of music and video in the US, is working with the crisis consultancy to reach out to both employees and partners, said agency VP Anita-Marie Laurie.
"We wanted to let everyone know that this is not a typical Chapter 11," said Laurie. "This is a prepackaged reorganization plan that will get Tower Records in and out in just 35 days. We're sending the word that this is a financial issue and is not an operational problem."
The company wants to reassure employees and partners that nothing will change, and, if all goes according to plan, no one will notice anything different, said Laurie. The record chain's stores will stay open, although there is a possibility some might close, she added. Any closures would have more to do with expiring leases than the bankruptcy filing, she said. And vendors should expect to keep getting paid.
As for the average consumer, Tower is not planning any special outreach beyond its regular advertising and marketing, said Laurie. And ideally, those customers will not notice any change in service at any of the stores.
Tower Records is facing fierce competition from all sides. Not only must it contend with other music stores like The Wherehouse and Sam Goody, and bookstores that sell music, such as Barnes & Noble and Borders, but it now finds itself competing with giant discounters like Wal-Mart, and online retailers, from Amazon.com to Apple's iTunes music store.