Listing $227.9 million in assets versus $222.5 million in debt, popular music chain Wherehouse Entertainment filed for Chapter 11 bankruptcy protection. This is second bankruptcy filing for the company in five years.
The Associated Press reports that the companywho at one time operated 370 storeswill close 120 stores in the next few months; this is in addition to the 30 unprofitable sites the company recently closed. Executives at Wherehouse cite increasing competition from discount retailers, CD burning and illegal downloading as the reason for their sales woes.
Wherehouse, much like Tower Records, has struggled to compete with large retail chains such as Best Buy and Circuit City. These specialty retailers are able to set lower prices on CDs and DVDs with the expectation customers will purchase high-end products resulting in profits for the company.
Wherehouse said it plans to remodel many of its remaining 250 stores to provide a more interactive environment, including listening stations and interactive booths.