Tower Records Rehabs, Makes A Comeback
With the buzz on digital music ratcheting higher seemingly every week, it's
easy to assume that the end of music retail in the physical world is at
hand. Not so fast, says Tower Records. The venerable chain, last seen
heading into bankruptcy 16 months ago, has resurrected itself and is moving
into the future with surprising vigor. The company has launched an
aggressive new ad campaign, and is opening remodeled flagship stores in key
markets, with plans to renovate the entire chain. Tower is also laying
groundwork for expansion in the digital realm, planning collaborations with
partners from the television and internet marketing industries.
When Tower filed for Chapter 11 in 2004, many industry observers wrote the
retailer off for good, a victim of stiff competition from big box stores
like Wal-Mart and Best Buy as well as nascent digital operations like
iTunes. Tower was even viewed by some as the canary in the digital music
coal mine, its demise a sign of things to come for CD sales in general.
Instead, the company essentially took a time-out to retool its business
strategy, junking ambitious overseas expansion plans and revamping
operations in its US stores instead. Signs of things to come can be seen at
recently opened superstores in Seattle and Tempe, Ariz., which feature
touch-screen listening stations and a DVD selection that rivals the CD
inventory in numbers and depth. Industry observers also expect Tower to add
touches to make the browsing experience more enjoyable, like the plush
seating that has sprouted up at bookstore chains over the last several
years.
Though the new Tower has made its first moves in the brick-and-mortar world,
it is also planning a digital initiative. The company is staying
tight-lipped as to the specifics of that push, but some details have
trickled out. In-store CD burning kiosks will be converted to digital
download stations, where customers can fill up their MP3 players with music,
for instance. Tower may also make some changes at its venerable Tower.com
website, where a rather anemic digital download service currently plays
second fiddle to online CD sales.
Story by news analyst Michael Baker.
Market Data 
Markets 
AI
