Tweeter chief executive Joe McGuire said that there are no plans to close any of its 103 stores or lay off any of its 2,000 employees despite the fact that the company recently through the bankruptcy process.
The U.S. Bankruptcy Court in Wilmington, DE, U.S., approved the US$38 million sale of Tweeter Home Entertainment Group, a consumer electronics chain, to New York-based Schultze Asset Management LLC. The deal, completed after the go-ahead, created a new entity called Tweeter Newco LLC , which will control all the Tweeter retail stores that have remained open since the bankruptcy filing in June. The money raised from the sale will be used to settle claims filed by creditors under the guidance of the bankruptcy court.
McGuire said the company will remain headquartered in Canton and currently has no plans for more job cuts or store closings. He said the stores currently in operation combined for $500 million in yearly revenue.
The sale comes after a series of setbacks that drove the company to a financial crisis. In March, Tweeter disclosed a restructuring plan that sought to close 49 stores, four of which were in Massachusetts, U.S., and cut about 650 jobs in response to drop in demand for projection TVs as well as a decline in flat-panel TV prices. The company then reported in May a $38 million operating loss for the first three months of the year, and eventually filed for Chapter 11 with debt that totaled more than $190 million to as many as 50,000 creditors.
To increase revenue, Tweeter plans to expand its "playground" stores. As opposed to a typical retail store with rows of TVs and devices on display, the playground stores allow potential buyers to see how the products work in areas and situations that simulate their homes. It also plans to increase its revenue from custom home installation services within the next year.