Tweeter Parent Halves Corporate Staff
By Alan Wolf -- TWICE, 8/20/2007
UPDATE! Canton, Mass. — Tweeter’s corporate staff was cut by half on Friday to eliminate red tape and bureaucracy, the retailer’s new owners said.
Tweeter chairman George Schultze, principal of Schultze Asset Management, told TWICE that the cuts were difficult but “absolutely necessary” in order to reduce excess corporate overhead which was “choking the stores.”
Schulze confirmed that approximately 80 staffers were let go, most based at Tweeter headquarters here, and that all departments were affected. Tweeter’s senior management team was not yet impacted, he said.
The downsizing was limited almost exclusively to corporate staff, Schulze noted, and there were no reductions in stores or store-level personnel. There are no plans to divest the headquarters facility, although some of the excess space may be sublet.
Schultze said the downsizing “should be favorable to our customers and stores as the cuts eliminate red tape and bureaucracy at headquarters and allow us to refocus on our core competencies.”
The corporate restructuring was the second since January, when 20 percent of the Canton crew was let go.
No further changes are expected, nor are there are any plans to sell the chain, he said. He described Schultze Asset Management as a “long-term, committed investor,” and said the go-forward strategy is to simply be “a much more focused, ‘leaner and meaner’ Tweeter that is a little closer to the end customer.”
In a prepared statement, Schultze said the staffing reductions “should allow our remaining stores significantly more breathing room so we can afford to restock them with the critical inventory our distinguishing customers demand.”
He continued, “Although I cannot guarantee it, our actions should help ensure that the remaining employees do not receive termination notices in the near future. The cuts we are making are deliberate but painful and will surely be difficult for everyone involved. Even so, we hope the remaining team members will see Tweeter ‘rise from the ashes’ and return to cash flow profitability despite a difficult tour through bankruptcy and extraordinary changes in the way we operate and in the marketplace we serve.”
Schultze, a Purchase, N.Y.-based investment group specializing in distressed businesses, acquired Tweeter last month for $38 million. The company is presently fueling a 40-store remodeling program for the A/V specialty chain that incorporates elements of its next-generation “Playground” store format. Retrofits of the first 10 stores were scheduled to begin this month.
