Tweeter, which briefly realized its vision of becoming a national A/V specialty chain, may have reached the end of the road after 36 years in business.
The company, founded in 1972 by Massachusetts audio enthusiast Sandy Bloomberg, filed for Chapter 11 protection in a Delaware bankruptcy court this month after shutting its distribution centers, dismissing its headquarters staff and commencing going-out-of-business sales at all remaining 94 stores.
According to petitions filed under the names Tweeter Opco, Tweeter Newco, Tweeter Tivoli and Tweeter Intellectual Property, the retailer faced “a severe liquidity crisis brought on by slow sales caused by declines in discretionary consumer spending.”
The chain, which was acquired last year by Schultze Asset Management after a previous bankruptcy filing, estimated its liabilities at between $50 million and $100 million.
Sony is the company’s largest unsecured creditor, with claims of $1.7 million, followed by Samsung at $865,555 and Pioneer at $554,814, according to the filing.
Tweeter’s other largest claimants include Panamax ($315,066), Alpine ($308,387), Omnimount ($285,614), Panasonic ($276,750), Service Net ($275,674), Mitsubishi ($193,411) and Martin Logan ($166,025).
Tweeter acknowledged in the filing that it began store-closing sales through a joint venture with liquidators SB Capital Group, Tiger Capital Group and Hudson Capital Partners, and will continue to operate the business as a debtor in possession.
The company also notified a Massachusetts state agency that it will be shutting its headquarters here by Dec. 31 as part of a “permanent entire company closing.”
The company presently manages 94 stores in 17 states under the Tweeter, Sound Advice, HiFi Buys and Showcase Home Entertainment brands, which were hobbled together in the late 1990s and early 2000s with an aggressive growth-through-acquisition strategy.
But the company never successfully integrated its far-flung operations and disparate cultures. It was forced to shed stores and exit markets as high-end audio became passé, restricted brands and custom installation became widely available and flat panel pricing fell to commodity levels.
Whether elements of the chain will be bought and re-launched online or in select markets remains to be seen, although industry observers believe that is doubtful given the weak economy and tight credit markets.
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