The Associated Press reports that a federal judge in Delaware approved the sale of Tower to Great American yesterday afternoon following a two-day, 30-hour auction. The liquidation process, including going-out-of-business sales, will start today.
According to AP, Great American's winning bid of $134.3 million was only $500,000 more than that of Trans World Entertainment, which had intended to continue operating at least a few of Tower's stores.
A member of Tower's legal team told the AP that the company's assets will be sold for a total of $150 million, including the sale of various leases and properties. Tower operated 89 stores in 20 states and owes creditors approximately $200 million.
Tower Records was founded in 1960 when music enthusiast Russ Solomon began selling records out of his father's Sacramento drugstore basement. Tower eventually built multi-level stores staffed by expert staff and was a dominant American music retailer during the 1980s — valued especially by aficionados of classical, jazz, world music and other genres that were difficult to find in most pop-oriented music stores.
The company ran into financial trouble after a mid-1990s expansion was less profitable than expected due to competition from retailers such as Wal-Mart and from online stores such as Amazon.com, as well as from the revolution in downloading music in digital files rather than purchasing it on discs.
In August, The Los Angeles Times reported that Universal Music Group, Warner Music Group and EMI Music had suspended shipments to Tower after it stopped paying its bills.