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Tweeter Files For Bankruptcy, Will Restructure
The company announced that all of its remaining stores will stay open and employee salaries and benefits will continue to be paid.
"After considering a wide range of alternatives, it became clear that this course of action was a necessary and responsible step toward preserving Tweeter's viability as we address our financial challenges and work to secure our future," says Joe McGuire, president and CEO of Tweeter, in a statement.
According to a statement, Tweeter has received a $60 million secured debtor-in-possession (DIP) credit facility from General Electric Capital Corporation, which it plans to use immediately to pay employee salaries and purchase merchandise.
In May, Tweeter attempted to infuse capitol into its operations by selling stock in Tivoli after reporting a 13 percent revenue decrease.
Just over a month earlier, the company announced plans to close a third of its stores and lay off more than 20 percent of its workforce.
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3 Comments (displayed in order by date/time)
Was anyone shocked at this? First they bring in Judy because she did so well at Gateway and K-Mart. they then bring in new Ipod displays, since everyone knows there is such a huge amount of profit to be made with those items. Then they stop the trainings done by reps and have trainers do them, then just have on-line trainings. Let’s also restructure the pay plan so the employees can theoretically make more money, so really, you can lose a lot of good employees. Ohh, and my favorite, let’s drop the better, well known lines (B&K, Boston Accoustics, Monster, just to name a few) to be replaced by house brands and lesser known lines. Lastly, why don’t we just close a bunch of stores and spend a lot of money buying out leases all at the same time, not once, but twice. Why not just close underperforming stores when their leases are up, like alot of smarter companies do. Or even better yet, put a focus team in those stores to get them performing again, so you wouldn’t have to close it in the first place.
I really hope investors take a good long look at how there company is being run and decide to make some changes.
Jeff quotes quite a litany of woes. Sadly, Tweeter isn’t the only retailer I can think of that have taken the exact same steps. I expect that Tweeter won’t be the only one in Chapter 11 by the end of the year.
I’m not surprised. Joe McGuire should take the blame. His ego got in the way when Mark Wattles from Ultimate Electronics wanted to buy him out.
Oh well. Wal-Mart indicated that they were going to be more aggressive in the A/V department. Who’s next on the hit list?