The major labels have stopped shipping product to Tower Records:
Universal Music Group, Warner Music Group Corp. and EMI Group sources confirmed privately that each of the companies had stopped sending albums to the Sacramento-based chain, which has struggled with declining sales as digital technologies have changed the way consumers buy music.
Sony BMG Music Entertainment also suspended shipments, according to industry sources.
The four record companies declined to comment.
The move comes just days after Tower Records named a new chief executive: crisis management and bankruptcy specialist Joseph D'Amico. Tower executives informed record companies this week that they would not pay outstanding invoices, according to sources familiar with the conversations.
Tower executives, including D'Amico, did not return phone calls. A Tower spokesperson declined to comment.
Industry insiders and analysts said it was unclear whether Tower Records had run out of money or was attempting to pressure the record companies to extend better terms.
Coolfer has more. Tower has been an intensely depressing place to buy music for a long time now, but I can't help but wax nostalgic -- back in the 1990's when I was living in Montreal, Tower Records was invariably my first stop during any pilgrimage to New York.