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Musicland To Close A Third of Its Stores
Navarre/FUNimation Owed $12.8 Million Date: 1/16/2006 |
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Musicland plans to close roughly a third of its stores, its attorney said Friday, with 284 of its 867 outlets slated for shuttering in the wake of its bankruptcy filing on Thursday (see "Musicland Files Bankruptcy"). The company had announced the closing of all 61 of its Media Play stores in December (see "RIP Media Play"). The company is moving fast; close-out sales are already at Suncoast stores that are shutting down. The painful effects on suppliers continue to ripple through the anime business; FUNimation parent Navarre Corporation announced on Friday that it was owed $12.8 million by Musicland for November and December balances due and that it was assessing the effect on its quarterly and annual financial results. Navarre did echo the comments we've heard elsewhere (see "Musicland Blowback, Part 2"), indicating that it affected Musicland's sales to migrate to other retailers. CEO Eric Paulson said, "We believe that any market share lost by Musicland through this reorganization will be absorbed by other customers and that ht enet effect on our business going forward should not be significant." Musicland's first-day petitions, allowing it to pay employee expenses, honor gift cards, take returns, and continue loyalty programs, were approved the bankruptcy court. The reorganization is being managed by BMC Group, a professional services and information management firm with restructurings as one of its practice areas. |
| Source: ICv2 |
