Tower Records

Inception, expansion, and description

In 1960, Russell Solomon opened the first Tower Records store on Watt Avenue, in Sacramento, California. He named it for his father's drugstore, which shared a building and name with the Tower Theater,^[3] where Solomon first started selling records. By 1976, Solomon had opened Tower Books, Posters, and Plants at 1600 Broadway, next door to Tower Records. In 1995, Tower.com opened, making the enterprise one of the first retailers to move online.^[4]

In addition to CDs and cassette tapes, the stores sold DVDs, electronic gadgets like mp3 players, video games, accessories, and toys, and a few Tower Records locations sold books as well, such as those in Brea, Mountain View, and Sacramento, California, as well as stores in Nashville, New York City, Portland, Oregon, Austin, and Seattle.

Tower Records on the Sunset Strip

Seven years after its founding, Tower Records expanded to San Francisco, opening a store in what was originally a grocery store at Bay Street and Columbus Avenue. In 1979, Tower Records in Japan started its business as the Japan Branch of MTS Incorporated. The following year, Sapporo Store, the first in Japan opened. The chain eventually expanded internationally to include stores in Japan, United Kingdom, Canada, Hong Kong, Taiwan, Singapore, South Korea, Thailand, Malaysia, the Philippines, Ireland, Israel, United Arab Emirates, Mexico, Colombia, Ecuador, and Argentina. The Tower Records stores in Japan split off from the main chain and are now independent. Arguably the most famous Tower Records outlet was the purpose built building that company staff general-contracted, with many personally contributing their labor, which opened in 1971 on the north west corner of Sunset Boulevard and Horn Avenue in West Hollywood.^[5][6]

In New York City, Tower Records operated a suite of stores on and near lower Broadway in the East Village. The main store, located at the southeast corner of East 4th Street and Broadway, consisted of four levels, sold mainstream items, and was famous in the 1980s for selling albums of European new wave bands not yet popular in the U.S. It was a noted hangout for teenagers from the wider metropolitan area. The Tower Records Annex was in the same building, but located "in the back" at the southwest corner of East 4th and Lafayette Streets, and stocked items that were older and a bit more obscure. (As the CD replaced the LP, vinyl moved from the main store to the Annex.) The third store, Tower Video located on the southeast corner of East 4th and Lafayette Streets, specialized in video and, for a while, the second floor of this location also sold books. Their location on the Upper West Side, near Lincoln Center on 66th Street and Broadway, was a magnet for those working in the field of musical theatre.

The Nashville location on West End Avenue (across from Vanderbilt University) was in a former Packard dealership. The old showroom floor in front was devoted to CDs, cassettes and vinyl. The area in the back housed videocassette sales and rentals, PC and console games and music paraphernalia. The strip mall next door contained a separate Tower Books. The location was famous for their late-night Monday events that culminated at midnight on Tuesday when staff started ringing up sales of new releases. Because of the store's proximity to Music Row, country music stars could occasionally be seen performing or shopping there.

As part of a 2002 settlement with 41 states over CD price fixing Tower Records, along with retailers Musicland and Trans World Entertainment, agreed to pay a $3 million fine.^[7] It is estimated that between 1995 and 2000 customers were overcharged by nearly $500 million and up to $5 per album.^[8]

In 2005, the company began using "scan and listen" stations in its stores. These stations allowed customers to listen to audio samples from CDs and to search for particular songs, albums and artists. This model of listening station is still used at the Arizona-based chain Zia Records.^[9]

In 2006, the company introduced the Tower Insider program. The program was free of charge and allowed a customer to receive a membership card which could be scanned with each purchase, allowing the customer to receive coupons and notification of special deals via e-mail.

Tower Pulse! Magazine

In 1983, the company began publishing a music magazine, Pulse!, which contained record reviews, interviews, and advertising. Initially, it was given away free in their stores to promote their record sales. After nine years, in 1992, the magazine began national distribution with a cover price of $2.95, but it was cancelled when the company discontinued U.S. operations. From 1983 until December 2002 Tower Records published it monthly, 222 issues in all.

Bankruptcy

Tower Records entered Chapter 11 bankruptcy for the first time in 2004. Factors cited were the heavy debt incurred during its aggressive expansion in the 1990s, growing competition from mass discounters and Internet piracy.^[10] Mismanagement, managerial incompetence, and crippling restrictions from the first bankruptcy deal also contributed to Tower's demise.^[11]

Some observers took a pragmatic view. As Robert Moog, inventor of the Moog synthesizer, has stated: "I'm sorry if Tower Records' and Blockbuster's sales plummet. On the other hand, it wasn't that long ago that those megastore chains drove a lot of neighborhood record stores out of business."^[12]

In February 2004, the debt was estimated to be between $80 million and $100 million, and assets totaled just over $100 million.^[13]

On August 20, 2006, Tower Records filed Chapter 11 bankruptcy for the second time, in order to facilitate a purchase of the company prior to the holiday shopping season.^[14]

Liquidation

A liquidating Tower Records store in Portland, Oregon.

On October 6, 2006, Great American Group won an auction of the company's assets and commenced liquidation proceedings the following day. This included going-out-of-business sales at all U.S. Tower Records locations, the last of which closed on December 22, 2006. The Tower Records website was sold separately.^[15]

The managers of f.y.e., a music store chain based in shopping malls, had negotiated a deal to acquire the two historic Tower locations in the latter's home base of Sacramento. f.y.e. later backed out, stating that the "leases aren't what we thought they were". f.y.e. did acquire the lease of the West End Avenue store in Nashville,^[16] which eventually closed in 2011. f.y.e. also took over a Tower Records in Torrance, which continued to operate until early 2016.

Rasputin Music, a new and used music and video store based in the San Francisco Bay Area, expanded in the Central Valley of California by acquiring the leases for the former Tower Records stores in Fresno and Stockton.

Online return

On-line merchant Caiman, Inc., reopened the website from Montreal, Quebec, on June 1, 2007. This company also announced plans to reopen the stores themselves—opening stores in Los Angeles, New York, and San Francisco within the next nine months. They hired former Tower buyer Kevin Hawkins to assist with the re-opening. (Hawkins, however, along with former Tower employee George Scarlett, then left Caiman.) In 2009, Richard Flynn was hired as President. The website remained based in Montreal, but the relaunch of the brand never moved forward.^[19] Currently, the website features only the brand's logo with the message "...some Things Must Not Pass," along with a sign-up form for an e-mail newsletter.^[20]

Canada

Tower Records operated in Canada in the mid 1990s with a flagship store at the Toronto Eaton Centre at the corner of Queen and Yonge which opened in December 1995 and closed in 2001. Tower Records opened a second location in Toronto in the late nineties at North York Centre also on Yonge Street but was closed just prior to the flag ship store closing.

Hong Kong

Tower Records opened stores in the Hong Kong in the 1990s. There were two stores, one located on the seventh floor of Times Square at Causeway Bay, the other at Diamond Hill.

Ireland

Tower Records is operated in Ireland by Record & Discs Ltd. under a licensed franchise of MTS Incorporated (USA).^[21] As of 2018, two stores still operate in Ireland both located in Dublin, one on Dawson Street and the other on O'Connell Street upstairs in Easons. It is proposed that Tower Records could expand to other cities in Ireland in the coming years.^[22]

Israel

Tower Records Israel opened in 1993; a joint venture between Tower Records USA (MTS INC of W. Sacramento, CA) and two local businessmen. The Founding Director was Joel Abramson, who had previously managed Tower's flagship Sunset Strip location in Los Angeles. The first three locations were in Tel Aviv (the Opera Tower), Haifa (Hutzot HaMifratz, opened in early 1995) and Jerusalem (1995). The Tel Aviv location, with its beachfront location, was a popular shopping spot for Israeli pop stars like David Broza, Meir Ariel, Aviv Gefen, Riki Gal and others.^[23] TRI closed its final location in Ra'anana in November 2015.^[24]

Japan

Tower Shibuya store.

In 1979, Tower Records in Japan started its business as the Japan Branch of MTS Incorporated. The following year, Sapporo Store, the first in Japan opened. In 1981, Japanese subsidiary Tower Records Japan Inc. (TRJ) was established.

In October 2002, TRJ went independent from the international chain by management buyout. The bankruptcy of Tower Records in the U.S. in 2006 did not affect TRJ as it had been completely independent (as of 2015, NTT DoCoMo and Seven & I Holdings are the main stakeholders). As of October 1, 2014, TRJ maintains 85 directly operated store locations throughout Japan,^[25] including 10 Tower Mini Stores, and the Shibuya Store in Tokyo (moved to the current location in March 1995) which is said to be one of the biggest music retail outlets in the world, occupying selling space of 5,000 m² (9 floors).^[26] TRJ also publishes free magazines Tower, bounce, and intoxicate directly and through its subsidiary NMNL.

In addition to being the leading CD retailer in Japan, TRJ was the majority stakeholder in Napster Japan, a joint venture between TRJ and Napster LLC. On March 1, 2010, Napster Japan and TRJ announced that Napster Japan would terminate all of its services on May 31, 2010 due to the difficulty in covering the costs for maintaining the required systems to continue the services.^[27][28]

Tower Records Japan has a subsidiary record label called T-Palette Records, which specializes in idol performers.^[29]

Malaysia

Tower Records opened stores in Malaysia in the 1990s.

Mexico

The first Tower Records store in Mexico opened in the mid 1990s in the Zona Rosa area featuring 3 floors and a live DJ. After international bankruptcy, the stores were acquired by Promotora Musical, a retail company owned by Grupo Carso, the same owner of Mixup record stores. There were Tower Records stores in Mexico City (Gran Sur and Mundo E), Puebla (Las Animas) and Monterrey (Paseo San Pedro)., but eventually closed.

Philippines

Tower Records opened three stores in the Philippines in the 1990s. The first branch was located in Glorietta 3 Ayala Center Makati City which opened in 1998^[30]. The second store was in Alabang Town Center Muntinlupa City which opened on 1999.^[31]The third store was in Robinson's Place Manila, all of which are in the National Capital Region.

Singapore

Tower Records opened stores in Singapore in the 1990s.

South Korea

Tower Records opened stores in South Korea in the 1990s, with stores in Seoul and Busan.

Taiwan

Tower Records opened two mega stores in Taipei, Taiwan in the 1990s. Both stores were located in popular areas of Taipei. They became centers of fashion and music during their existence.

Thailand

Tower Records opened stores in Thailand in the 1990s, introducing comprehensive music CD stocking into Thailand for the first time with revolutionary effects on the retail music business. There were several stores in Bangkok, including three megastores inside popular downtown malls. In the 2000s as business declined due to piracy and the downloading revolution, the stores were progressively closed and the remaining ones were eventually sold to another dealer.

One of the biggest megastores was located on the top floor of CentralWorld mall in central Bangkok^[32]

United Kingdom

Originally Tower Records was just a London-based concern, with a first store in Kensington High Street in 1984 being followed the next year by a 25,000-square-foot (2,300 m²) flagship outlet at 1 Piccadilly Circus and later two more, smaller outlets at Whiteleys in Bayswater, and Kingston. However, by the start of the 1990s the chain had grown to encompass a number of other stores, with large entertainment stores also selling movies, books, magazines and games in Birmingham and Glasgow, as well as a number of smaller stores that had been purchased from rival American retailer Sam Goody when it had left the UK marketplace (for example of this express format—Weston-super-Mare).

However, with tough trading conditions in the UK market, as well as the company's trouble in the States, the firm followed Sam Goody in retreating from the UK market.^[33] The London stores in Piccadilly and Kensington were sold to Virgin Group in 2003, who for a while traded under the Tower brand at the former site until the store could be fully refurbished, while the other stores were closed. The store was subsequently renamed Zavvi in September 2007 after a management buyout of the Virgin Megastores. The Piccadilly store closed on Wednesday, January 14, 2009 by the administrators and is now occupied by a non-music retailer as of 2017.