Some choice Orange County retail space is up for grabs as music chain Tower Records winds down its operations.
Tower Records has five OC stores, some of them in prime spots: Tustin’s The Market Place, downtown Brea, Costa Mesa along Newport Boulevard and at the Buena Park Downtown mall and the Laguna Hills Mall.
West Sacramento-based Tower Records filed for bankruptcy in August and said recently it plans to close its stores and call it quits, likely by December. Blame discount retailers Target and Wal-Mart and online sales of digital music.
For now, the chain’s OC landlords are in limbo.
Woodland Hills-based Great American Group, which specializes in liquidations, bought out Tower’s leases in a bankruptcy auction.
Great American and its partners, Boston-based Crystal Capital and New York’s Retail Consultants Inc., are looking for tenants to take on the leases.
“We paid for the right to try and market the leases,” said Scott Carpenter, executive vice president for Great American.
Great American expects to know the status of all the leases in about 30 days.
The company also is handling the blowout of Tower’s CDs, DVDs, magazines and other merchandise through a series of discount sales.
It could be easy to find tenants for Tower’s OC stores and others in the region. They’ve been among the most profitable.
“In general, all Southern California stores are doing well,” Carpenter said.
The challenge: the area’s high rents and the large size of some of the local stores.
In the meantime, Great American is on the hook for rents to landlords.
“The estate got the benefit of us taking the risk,” Carpenter said.
For more on this story, see the Nov. 6 editiono of the Business Journal.
