Musicland Holding Corp. Announces Consolidation of Store Operations to Strengthen Financial Performance; Company Receives Court Approval to Close 341 Stores
MINNEAPOLIS -- Feb. 1, 2006 -- Musicland Holding Corp., an entertainment specialty retailer, which operates retail stores and online under the names Sam Goody (SamGoody.com), Suncoast Motion Picture Company (Suncoast.com), and MediaPlay.com, today announced that it intends to close 341 of its underperforming and unprofitable stores as part of its Chapter 11 financial review.
"Closing these stores was a difficult, but necessary decision to protect the future of this company. The store closing list is based on a number of factors, including store profits and the terms of the leases at each location," said Musicland President & CEO Michael J. Madden. "As we move forward in the restructuring process, this action will allow us to focus our resources on those four hundred stores that have stronger prospects for future growth."
In many cases, Musicland customers who are affected by the store closings will have the option of shopping at a nearby Sam Goody or Suncoast store. In addition, customers can continue to shop online at http://www.samgoody.com, http://www.suncoast.com, or http://www.mediaplay.com.
"We thank our many customers and associates who have remained loyal to us over the years," continued Madden. "We wish these changes were not necessary, but we remain optimistic that with continued innovations, such as CD burning, wireless products, digital downloading, and our on demand posters and apparel, our customers will continue to turn to us for their music and movies needs."
Attached is a list of the individual stores that have been approved by the Court for closing. Most listed stores will be closed through a liquidation process, which begins February 1. Following the liquidation process, Musicland plans to operate 400 stores in 49 states - 191 Sam Goody stores and 209 Suncoast stores.
Musicland has selected a joint venture led by Hilco Merchant Resources, LLC of Northbrook, Ill., and including Gordon Brothers Group, LLC of Boston, Mass., to manage the store closings. Michael Keefe, CEO of Hilco Merchant Resources, stated, "Extremely compelling discounts of up to 40 percent are being offered to the consumer on more than $140 million worth of music, movies, video games and more. These stores have the merchandise that customers want, at discounts rarely seen on current releases. This is so much more than just a sale event and we anticipate a tremendous response."
On January 12, 2006, Musicland filed voluntary petitions to restructure under Chapter 11 of the U.S Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. The case has been assigned to the Honorable Judge Stuart M. Bernstein under case number 06-10064. More information about Musicland's reorganization case is available at http://www.musicland.com or via the company's restructuring information line at: (888) 819-7914. Information on the case can also be obtained on the Bankruptcy Court's Web site with Pacer registration: http://www.nysb.uscourts.gov.
Musicland Holding Corp. is a leading national specialty retailer of music, movies and entertainment-related products. Musicland operates retail stores and online under the names Sam Goody (SamGoody.com), Suncoast Motion Picture Company (Suncoast.com) and MediaPlay.com. In June 2003, Musicland was acquired by an affiliate of Sun Capital Partners, Inc.