The once-proud Tower Records is now edging closer to the rocks, according to continued reports. The chain has been struggling with mounting debt, and major labels were recently forced to freeze shipments following various non-payments. The beleaguered retailer is now headed by chief executive Joe D’Amico, recruited to manage the current crisis and possible bankruptcy. Other possibilities include a straight liquidation, depending largely on decision of chief banking lender CIT Financial. And little thawed between the retailer and labels last week, part of a quickly worsening situation.
Labels want to get paid, but they are also disinterested in witnessing the fall of such an important retailer. Just recently, attendees at the annual NARM convention in Kissimmee, FL, were supportive of Tower, and crowned it with a top retailer award. But financial realities will probably spell a rough period ahead, despite the symbolic nod. If Tower Records folds, it would represent a critical loss for the dedicated, brick-n-mortar music retail segment. Remaining would be two distinct alternatives – big box retailers like Wal-Mart and Best Buy, which offer deeply discounted loss-leading CDs, and smaller niche outlets, which have also been under pressure.