Musicland to close 341 underperforming and unprofitable stores

By Caroline Salls

Pittsburgh, Feb. 1 - Musicland Holding Corp. intends to close 341 of its underperforming and unprofitable stores as part of its Chapter 11 financial review, according to a company news release.

Most stores will be closed through a liquidation process, which was set to begin Wednesday.

Following the liquidation, Musicland said it plans to operate 400 stores in 49 states - 191 Sam Goody stores and 209 Suncoast stores.

According to the release, Musicland has selected a joint venture led by Hilco Merchant Resources, LLC to manage the store closings.

"Closing these stores was a difficult, but necessary decision to protect the future of this company," president and chief executive officer Michael J. Madden said in the release.

"The store closing list is based on a number of factors, including store profits and the terms of the leases at each location. 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."

Musicland, a Minnetonka, Minn., specialty retailer of pre-recorded entertainment software products, filed for bankruptcy on Jan. 12 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 06-10064.

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