Denver — Tweeter Newco, the parent company of Tweeter, took advantage of the CEDIA Expo venue to announce it had received $80 million in new financing.
Tweeter, which named George Granoff CEO after the resignation of Joe McGuire in late August, had cut half of its corporate staff days before that, and was purchased by Schultze Asset Management in July for $38 million, so the $80 million new financing announcement was good news. Granoff and Philo Pappas, merchandising senior VP, officially broke the news to TWICE during the PRO Group reception here last night. Tweeter is a long-term member of the group.
In the prepared statement, the $60 million was said to come from an asset-based loan facility from Wells Fargo Retail Finance and a new $20 million term loan from Schulze.
Granoff said in the statement, “This new financing will ensure that we are properly stocked with a good selection of premium products from our best and most-qualified suppliers. These are goods and parts that our discerning customers demand and expect from us. Also, the new funding will give us the added flexibility to meet our new and more demanding business strategy goals.”
Granoff, who said he has been on the job for “10 days” did not want to say much beyond his statement about plans for Tweeter. But when asked about the conjecture that he was selected to be CEO to basically liquidate the company, Granoff noted, “The $20 million loan from Schultze [Asset Management] indicates that George [Schultze, chairman of the parent company] is in” for the long-term, and indicated better commitments for existing employees, among other evidence.
In his statement in the release, Schultze said the parent company made the “additional investment” so the company “has added flexibility to execute on its exciting new strategy ... and to further reinforce our long-term commitment to the business. Tweeter is lucky at this point to have the opportunity to start with a clean slate and a fresh start.”
The $80 million is in addition to Schultze purchase price and the cash proceeds of about $10.5 million to Tweeter Newco when it sold its entire investment in Tivoli Audio.