In June, Tweeter filed for Chapter 11 bankruptcy protection from its creditors. The company announced restructuring plans that included closing all stores in California, Tennessee, Alabama, New York and most of Georgia. In July, the company’s assets were sold to Schultze Asset Management for $38 million. On Friday, the new owners announced that half of the corporate staff would lose their jobs, including 80 employees at the headquarters in Canton, Massachusetts. Tweeter is now pinning its hopes on plans to remodel 40 stores as high-end “consumer electronics playgrounds“.
It doesn’t look as though times will get better for Tweeter any time soon. Consumer jitters about the economy and stock market, and about tighter home equity credit are likely to put a damper on fall purchases, especially for high ticket items such as high-end HDTVs. Competition from Wal-Mart, the big box stores, and the warehouse club stores is heating up and their target customer populations overlap. HDTV manufactures are producing enormous amounts of product, and are going to be anxious to sell them this fall. This looks like a recipe for a buyer’s market, and it may be that the most desperate will be the one who gets the sale. It does not look like a scenario that will help Tweeter recoup its losses.