Originally Published November 2, 2006
The iconic Tower Records is preparing to close its doors forever in Los Angeles and around the country in the continuing systematic shift of the music industry from high-priced music stores like Tower Records, Wherehouse Music and Sam Goody to online sales and large discount stores.
With posters and banners proclaiming “Everything Must Go” and “Sale on Everything,” 89 Tower Records stores are being liquidated as the result of a bankruptcy buy-out.
On Aug. 30, the company declared its second bankruptcy in two years and was sold to a Woodland Hills-based liquidation firm in an Oct. 6 auction that involved multiple bidders.
The Great American Group bought Tower Records for $134.3 million and the next day started to dismantle all 89 stores of the West Sacramento-based record store chain. About 2,700 Tower Records employees will lose their jobs. The liquidation sales, which include store merchandise and equipment, started at 20 percent and will escalate weekly by 5 percent to a mid-December crescendo.
Tower Records attributes its financial problems to an overall decline in music sales, increase in online music sales, and the tough competition from discount stores such as Wal-Mart and Best Buy. The company has struggled financially for about 10 years and owes creditors about $200 million, according to the Great American Group.
“It’s almost like the death of a generation,” said Bo Fannon, a Northridge automotive technician by day and music manager by night. On a sunny Sunday afternoon, Fannon came to stock up on some 1970s-era rock music, but left empty-handed because he had expected to get a better deal than the 20 percent sale.
“I’m going to Wal-Mart,” Fannon said. “Their selection is not as good but the prices are better.”
Even with a 20 percent discount, many CDs at Tower Records are still priced above the main competitors. Because the big retailers carry mostly Top-25 mainstream artists and can sell large quantities of a title, they are able to negotiate favorable deals with distributors.
Tower Records was created by Russ Salomon in 1960 as a single record store and eventually grew to become a pioneering and acclaimed enterprise with stores in nine countries. Tower Records was the first record store to mimic the structure of a supermarket, with aisles of record racks, turnstiles and large quantities of records. Over the years, the company became an icon in the music retail business and was known for its innovative marketing methods, such as weekly in-store performances and murals of current album cover-art on the outside, commissioned to local artists by record labels.
“It’s going to be a pretty big void once this place is gone,” said Adam Stover, supervisor at the Northridge store. “If you want to find some obscure Japanese band, you’re not going to find it at Best Buy.”
A wide selection, from experimental rock to punk to classical music, was one of Tower Records’ trademarks, along with their specialized staff expertise. Tower was one of few large music retailers that carried music catalogues of small independent record labels. Record companies such as these are finding it harder to survive and with the demise of Tower, the non-mainstream labels have lost an important partner.
With the Northridge Tower Records gone, its wide selection of music will not be as available in the vicinity. Record stores in Los Angeles, such as Aron’s Records and Rhino Records, have met fates similar to Tower’s. The music retail industry is undergoing a transformation and many stores struggle to survive in the tough competitive environment of discount stores, online music sales and illegal file sharing.
Tower Records was founded during the heyday of rock ‘n’ roll and catered to the baby boomers, an aging customer base which today purchases less music than the younger generation and who are often reluctant to buy music online.
“A lot of (our) loyal customers are from the older generation,” Stover said.
Although Tower Records was known for its wide selection and knowledgeable staff, one of the chain store’s downfalls was that it did not offer competitive prices.
“I’m fine with (Tower’s demise), because the prices are a little steep,” said Lori Furnier, a Granada Hills health information technician who has been shopping at the store since 1976 and recently bought a couple of ABBA CDs and some old movie titles on DVD. “(But) if I couldn’t find something, I would find it at (Tower).”
Some customers were neither surprised nor saddened by the bankruptcy.
“It does not really make a difference to me,” said Eric Smith, 26, who blows things up for a living in his work as a movie special effects technician. “The only reason I’m coming here is because they have a sale.”
The Northridge store was filled with discount shoppers on a recent weekend and for the staff, which is still on payroll but is now employed by the Great American Group, the inevitable closing of the store was looming over them. Once the liquidation is completed, the young staff of about 20 will be laid off.
“I love it (here) because music is my life and here I’m surrounded by it,” said Patty Arias, one of the youngest employees. She does visual merchandising and has worked there since February.
“I like it here, it’s very chill,” said Emin Obdalian, who is in charge of loss prevention. He sits at the door or patrols the store undercover to catch shoplifters and prosecute them. Obdalian will look for a similar job after December.
Most employees did not know about the company’s financial situation until the bankruptcy was announced in August.
“As far as being a specialist, at this point I don’t care anymore,” said Stover, who loves his job. “I just want to get the last paycheck before Christmas and be out of here.”
“A lot of people come and say ‘I’ve been shopping here since I was little,'” Arias said. “I think it sucks.”