TOWER RECORDS TRIES TO SELL JAPANESE STORES
Tower Records is a famous retailer based in West Sacramento, California (about 1.5 hours east of San Francisco by car). This company is world famous for its wide variety of records, CDs, tapes, books and videos. It has been in business for 42 years.
Tower Records was one of the first American stores that became successful in Japan. Introduced in the early 1980's, Tower quickly became popular among young people in Japan. Why was it popular?
Tower not only imported records, but it also imported its original California culture to Japan. The stores were considered "cool" by Japanese youth, with its California atmosphere. Young people wore radical clothes and had radical hairstyles, just like young people in California.
Also, Tower had one of the most interesting collections of records. Unlike the usual record store, Tower specialized in imports and other hard-to-find records. This special quality made Tower a fun place to "hang-out" and visit with friends. And, those who really loved music could find special records that could not be found in other Japanese stores.
The Tower stores in Japan are still popular, and are still very profitable. Unfortunately, the same cannot be said for the stores in America.
Because of Internet sales, and the rise of other large music stores such as Virgin Superstores (from England), Tower is struggling to stay alive. Also, music sales are down in America because many people download music from the Internet, and do not pay for the music.
In order to raise money to survive, Tower is trying to sell its 51 stores in Japan. They want to sell the stores to Nikko Principal Investments Japan, Ltd. for $125 million. Tower will use the $125 million to pay back loans to American banks. Nikko will continue to operate the Tower Records in Japan.
If they sell the Japanese stores, Tower will have 120 stores remaining. Hopefully they will survive and prosper. It is too bad that one of the first American stores to be popular in Japan has to sell its stores. But that may be the best way for Tower to stay alive.
