|Wherehouse Files for Chapter 11 Bankruptcy|
|Home Theater News Industry-Trade News|
|Written by Scott Selter|
|Tuesday, 21 January 2003|
For the second time in 30 years, music retailer Wherehouse Entertainment Inc. has filed for Chapter 11 bankruptcy protection. The company believes the increase in illegal downloading of songs from the Internet to be one of the factors that has contributed to their recent decrease in sales. Other reasons cited were increased competition from discount retailers and slow holiday season sales.
As the company restructures their operations, they plan to close 120 stores in the coming months. Wharehouse had just recently closed 30 retail locations. This leaves 250 stores that Wherehouse plans to remodel and expand, adding more listening stations for consumers to audition music before purchasing it.
Wherehouse Entertainment Inc. had previously filed Chapter 11 in 1995 and restructured after purchasing Blockbuster Music.