I haven't seen the doc yet, so don't know if the following is covered in it. But I can tell you when I knew Tower was heading for big trouble, if not complete failure. The chain was always privately owned by Russ Soloman, the company borrowing it's operating capitol every quarter from it's bank, the loan being paid back from the profits from that quarter. This business model worked well the entire time Russ ran Tower. Soon after he retired (turning over the operation of the company to his son), however, Tower defaulted on it's loan, not showing enough profit in one quarter to repay the loan. When it happened a second quarter, then a third, the bank was legally entitled to take over management of the company, which it did.
First, employee hours were cut from 40 hours a week to 35. Then, the completely independent buying ability of each Tower store ended. Partial central buying was instigated, someone in Sacramento, rather than the buyers in each store, deciding which new releases, and how many copies thereof, were sent to each store. Having independent buyers in each store, buying only for the store he or she worked in, is what distinguished Tower from all other record chains.
The bank then, and IMO most importantly, asked for 365 days dating from all independent distributors, up from the industry standard 90 days. Dating is how long a company has to pay it's suppliers for the product sent to it. 365 days dating is a trick to enable Tower to pay for independent product only after it has sold. How so? The price tag on each piece of Tower merchandise included a date code which let the store buyers know when each piece was received. One of a Tower buyer's job duties was to go through the racks and pull all product that had been in the store, unsold, for a given length of time, that length left up to the discretion of the store. Some chose three months, some six. But NO store would keep an unsold piece of product for as long as a year. So, with this new dating demand, Tower would return every piece of independent merchandise before it would have to pay for it. What independent distributor can stay in business if being paid for product it sends to a retailer only after an entire year?! Many of the indi's refused Tower's demands, there product then disappearing from Tower stores. What good is a Tower record store without the product of independent record companies? None!
First, employee hours were cut from 40 hours a week to 35. Then, the completely independent buying ability of each Tower store ended. Partial central buying was instigated, someone in Sacramento, rather than the buyers in each store, deciding which new releases, and how many copies thereof, were sent to each store. Having independent buyers in each store, buying only for the store he or she worked in, is what distinguished Tower from all other record chains.
The bank then, and IMO most importantly, asked for 365 days dating from all independent distributors, up from the industry standard 90 days. Dating is how long a company has to pay it's suppliers for the product sent to it. 365 days dating is a trick to enable Tower to pay for independent product only after it has sold. How so? The price tag on each piece of Tower merchandise included a date code which let the store buyers know when each piece was received. One of a Tower buyer's job duties was to go through the racks and pull all product that had been in the store, unsold, for a given length of time, that length left up to the discretion of the store. Some chose three months, some six. But NO store would keep an unsold piece of product for as long as a year. So, with this new dating demand, Tower would return every piece of independent merchandise before it would have to pay for it. What independent distributor can stay in business if being paid for product it sends to a retailer only after an entire year?! Many of the indi's refused Tower's demands, there product then disappearing from Tower stores. What good is a Tower record store without the product of independent record companies? None!